Still More Credit Card Interest Rate Hikes

By
Real Estate Agent with CENTURY 21 All Islands

"Complaints rise about interest rate hikes" was scrolling across the bottom of the screen on CNBC's Power Lunch show this morning. That piqued my interest, so I waited for the discussion to follow. When Bill Griffith and his cohorts finally brought up the story, the discussion, although brief, covered a variety of viewpoints. There were arguments made both against, and in defense of the banks. These are the highlights that I noted:

Bank

Arguments criticizing the Banks: 

  • Banks that have received TARP money are raising interest rates on Credit Cards
  • Responsible consumers are targeted for increased fees
  • Rate hikes are arbitrary and indefensible
  • The "Consumer Bill of Rights" is still merely a pipedream, no action seen yet
  • Banks use creative ways of charging for services that are already being provided for free

Arguments supporting the Banks:

  • Banks should charge whatever they need to in order to stay profitable
  • Consumers don't have a "right" to borrow; it is a privilege provided to them
  • Consumers know that Banks are going to charge them outrageous fees: "Caveat Emptor"  
  • Consumers can shop for a better deal if they don't like the one they are getting    

After seeing this newscast, I was left with a smug feeling of satisfaction. You may have noticed, I am on a mission to unify a movement to counter the way banks treat credit card customers. Practices, such as arbitrary rate hikes and credit limit reductions, and the current way they are administered are unacceptible.

The reason this issue is so important to me, and to you as well, is because of the wide ramifications these actions have on our individual financial well being, as well as the economy overall. For an illustration of how this impact is felt, please read Who's Stealing Your Dreams, a post I put up yesterday.  The point of that post was to show how this small, everyday part of our lives can destroy our hopes of becoming a homeowner.

In that post, one commentator wrote that he did not like the comparison I made between Banks, a lawful enerprise, and thieves, clearly lawbreakers. I feel quite comfortable making that comparison, because a law is not necessarily just simply because it is the law. The laws that allow banks to literally steal your money, such as by unilaterally increasing interest rates to usurioous levels, using very questionable rationale, should be a crime. One of the panel on the Power Lunch program said as much also.

Judge's Gavel

There are many victims who have become more vocal about this "criminal" activity as well, hence the news crawler I mentioned at the beginning of this piece.

I will not use this monologue to argue for or against the viewpoints I saw discussed on the Power Lunch program (I do want to mention that the last point, shopping for a better deal, sounds good; but the deals all have the same pitfalls, so there is no real "choice"). However, I do hope that everyone will pay attention to this subject, and become more aware of the need to take proactive steps to bring about change to this system. The current system that allows such abuse of credit card users is totally unacceptable. For that reason, I would encourage everyone to take steps to stop using them.

Please consider joining the Credit Card Revolt group. Share your experiences, good or bad, with the credit card companies. Together, we can bring about positive change!

               

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Re-Blogged 1 time:

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  1. Janice Roosevelt 04/14/2009 08:16 AM
Groups:
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Credit Card Revolt
Tags:
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banks
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Rainmaker
382,670
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Michael:  I think it is an accurate statement to say the banks are "stealing your money".  If you stop and add up all the interest you have paid over your lifetime (interest on mortgages, cars, student loans, credit cards) --> how much would it be.  People need to stop borrowing from tomorrow to pay for today.  If you don't have enough money top buy your new car outright - then either a) buy a used car that you can buy outright or b) save some more money and wait.  Apply this same rule to your credit card purchases - if you can't pay the bill at the end of the month - then don't charge it!  It would be too hard to apply this rule to housing - but I do advocate people buying a home with an affordable 15 year mortgage.  Have you ever looked at the difference in cost between a 15 year and a 30 year mortgage --> it is an amazing savings.  Sure you can't buy as large of a house with a 15 year mortgage but you will be more financially sound in the future if you buy a smaller house with a 15 year mortgage!

My two cents

:)

Apr 14, 2009 06:02 AM #1
Rainmaker
472,293
Janice Roosevelt
Keller Williams Brandywine Valley - West Chester, PA
OICP ABR, ePRO,Ecobroker

It is crazy - the amount of money spent this way.

Apr 14, 2009 08:16 AM #2
Rainer
45,055
Michael S. Mackey
CENTURY 21 All Islands - Mililani, HI
REALTOR ABR, CRS, GRI, RSPS

National Credit Fixers - Matt Listro Matt, thanks for the two cents!

Janice Roosevelt,Ecobroker, ABR, e-PRO - Matt F (Matt Fetick Real Estate Team - Keller Williams Real Estate -) Janice, it is crazy! No one ever expected the credit card companies to be so blatantly devious about charging the excessive fees that they do.

Apr 15, 2009 02:23 PM #3
Rainmaker
861,200
Gabrielle Kamahele Rhind
KGC Properties LLC, Tucson Property Management & Real Estate - Tucson, AZ
Broker/Owner

HI MICHAEL!  The credit card issue that really bothered me was how some banks were raising interest rates for those who paid their balance off every month!  Imagine that! I guess they weren't making any money off those folks.  Anyway,  I called my bank and questioned the sudden rise in rates and they said they sent a disclosure - which they probably did.  But I wasn't concerned about the disclosure as much I was about the thinking behind doing this! -- Gab

Apr 16, 2009 07:57 AM #4
Rainer
45,055
Michael S. Mackey
CENTURY 21 All Islands - Mililani, HI
REALTOR ABR, CRS, GRI, RSPS

Gabrielle (Kamahele) Rhind (Tucson Arizona Real Estate Tierra Antigua Realty) Hi Gab, thanks for sharing this frustration. This kind of behavior is exactly what everyone must vow to fight. Please consider joining the Credit Card Revolt Group! One day, the credit card companies are going to be begging us to take them back. To get there, we need to show them that we won't accept their awful practices now!

Apr 16, 2009 12:02 PM #5
Rainer
29,656
Jay Williams
Greenville, NC - Greenville, NC
Mortgage Loan Officer - Getting You The Right Loan

Michael, if the government was truly interested in helping the folks this would be one of the first areas that would be addressed. With the cost of money for the banks being as low as it is, it is criminal the interest rates charged for credit cards.

Jay

Apr 19, 2009 09:29 AM #6
Rainer
45,055
Michael S. Mackey
CENTURY 21 All Islands - Mililani, HI
REALTOR ABR, CRS, GRI, RSPS

Jay Williams (Countrywide Bank, FSB) You said it Jay! Do you think PAC's might have anything to do with the lack of action on the consumer's behalf? Clearly, there has been little help offered for relief.

Apr 19, 2009 10:35 AM #7
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Rainer
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Michael S. Mackey

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