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Business CC company raised my interest rate to 35%!!!

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athensguy
Valued Contributor

Re: Business CC company raised my interest rate to 35%!!!

They probably do not think that you will continue paying on the account, so they have raised the interest to increase the amount of money they will be able to charge off.
Message 11 of 21
fishbjc
Senior Contributor

Re: Business CC company raised my interest rate to 35%!!!

Get yourself to a CU asap and see about a loan.
 
This is totally absurd and BS!!!!!  It makes no sense to me, other than they're *forcing* your hand to pay them off somehow.
 
With your good fico...you should be able to secure a loan asap.
 
Can you get in with Navy Federal Credit Union?
 
Please let us know how this turns out!
Message 12 of 21
Anonymous
Not applicable

Re: Business CC company raised my interest rate to 35%!!!

OUCH!!!! Smiley Surprised
Message 13 of 21
Anonymous
Not applicable

Re: Business CC company raised my interest rate to 35%!!!

wow thats awful Thanks for letting others know so tht it will not happen to the people that are now aware of this awful practice!!!! Id ask for a copy of the letter and when was this sent out wow thts mean
Message 14 of 21
Anonymous
Not applicable

Re: Business CC company raised my interest rate to 35%!!!

Thanks everyone so much for your help! I have filled out an application with my credit union for a loan so I can pay this thing off and avoid the thousands of dollars I stand to spend on interest. Hopefully they approve the loan! I will have an answer within 24 hours. I do have a good credit score as I mentioned, so I'm praying that the CU will give me this loan!!

I still just don't understand the justification for Advanta to be able do this. They have NO reason to believe that I'm not going to continue paying off my balance, and there is especially NO reason why they shouldn't let me close my account at the normal interest rate. What would they stand to lose by doing that? If they are so worried about me not being able to pay, you'd think they would WANT me to close the account so I can't charge any MORE on it. I just don't get it. I did absolutely nothing wrong, and they even admitted that to me when I was on the phone with them.

Any way, thanks again to everyone on here for your help and support. I will keep you posted as to what happens with my CU loan. Then I can just pay this off, never use it again, and be DONE with them!!
Message 15 of 21
TangMeister
Frequent Contributor

Re: Business CC company raised my interest rate to 35%!!!

I hope the CU loan goes through for you, bud. If it does, I'd keep the card open just for the heck of it to annoy them. Smiley Wink

It's obvious they're trying to force your hand to either pay off or balance transfer your debt with them, or force you into Ch 13 BK to at least get some of their money back. Seems they've determined you're too high a risk, and are likely to default on payments. It's ridiculous that they do this when you haven't missed a payment with them.

BofA has been notorious for doing this in the prior months to customers via "universal default", and it's one of the reasons why we're going to see some serious legislation in the coming year to reel in these predatory practices. The banking industry/credit card company lobbyists basically wrote the bankruptcy reform act a couple years back, trying to make it more difficult to file BK 7, and they've been on a rampage ever since. They've got whatever happens now coming to them. HOPEFULLY, this Congress will undo some of these ridiculous one-sided industry practices.

Keep us posted!




@Anonymous wrote:
Thanks everyone so much for your help! I have filled out an application with my credit union for a loan so I can pay this thing off and avoid the thousands of dollars I stand to spend on interest. Hopefully they approve the loan! I will have an answer within 24 hours. I do have a good credit score as I mentioned, so I'm praying that the CU will give me this loan!!

I still just don't understand the justification for Advanta to be able do this. They have NO reason to believe that I'm not going to continue paying off my balance, and there is especially NO reason why they shouldn't let me close my account at the normal interest rate. What would they stand to lose by doing that? If they are so worried about me not being able to pay, you'd think they would WANT me to close the account so I can't charge any MORE on it. I just don't get it. I did absolutely nothing wrong, and they even admitted that to me when I was on the phone with them.

Any way, thanks again to everyone on here for your help and support. I will keep you posted as to what happens with my CU loan. Then I can just pay this off, never use it again, and be DONE with them!!


Message 16 of 21
Creditaddict
Legendary Contributor

Re: Business CC company raised my interest rate to 35%!!!

Advanta is WIDELY known to do this, they did this on both of my business cards with them.  Luckily for me, I used the cards for bt and locked that in at 2.9 for life of balance, so purchase rate does nothing to me!!!!
Message 17 of 21
Anonymous
Not applicable

Re: Business CC company raised my interest rate to 35%!!!



YogaDownload wrote:

I still just don't understand the justification for Advanta to be able do this. They have NO reason to believe that I'm not going to continue paying off my balance, and there is especially NO reason why they shouldn't let me close my account at the normal interest rate. What would they stand to lose by doing that?

Sorry to hear about your ratejack.
 
First, their justification for being able to do this is that any CCC is allowed to change your terms at any time and for any reason, unfortunately.  It is perfectly legal.
 
The have made a business decision, plain and simple.  Do not take it personally.  It is all about the bottom line.
 
Since you were taking a while to pay down a balance, the CCC determined that in all probability you are not able to pay down that balance right away.  They then raised your rates for a couple of reasons:
 
1) If you were not able to PIF, you were a higher-risk cardholder.  Higher risk = higher APR.
2) If you were able to PIF, this action would entice you to do so, in which case they would be happy to get their money.
 
Judging from your posts above, it looks like you were carrying a balance you were not able to PIF right away.  You even expressed an indication that you might not be able to make the minimum monthly payment at the new rate.  I'm sorry if this comes across as harsh, but in that sense, it looks like the CCC was right.
 


Message Edited by cheddar on 07-22-2008 08:31 AM
Message 18 of 21
Anonymous
Not applicable

Re: Business CC company raised my interest rate to 35%!!!

cheddar -

I appreciate your feedback, but you are definitely being overly harsh. I do understand that a CCC has the right to change the rate at any point. But one thing to remember here is I am their customer, and they are making a ton of money off me, so I certainly expect a little respect and customer service.

I do understand they made a business decision, but based on what? You say that I am taking a long time to pay off my balance, but you don't even know how long I've had that balance. Actually, I've had this card for over 3 years and kept a very low balance on it for the first 2 1/2 years, never going above 30%. Then at the end of last year I used almost all my balance to invest in growing my company and have since been paying more than the minimum due each month. Why would they give me a limit of 10G if they don't ever want me to use all of it? And as long as I am continuing to pay it down and pay on time every month (as I always have), then what gives them the right to think I am not going to pay the thing off?! Also, my credit score is 718, which is hardly cause for a red flag!

As for your breakdown:

1) You are right, I am not able to PIF, which is why I have the card in the first place, and which is why they were charging me 19%

2) They ARE getting their money, made in payments each month which also gains them TONS in interest. Isn't this how loans and credit cards work?

I did say something about not being able to make the payments at the increased interest rate, but the fact of the matter is I could make the payments, and I value my credit too much to ever not pay on money that I owe. I was more referring to the fact that I physically would not be able to handle paying that much in interest - it might literally kill me. : )

I do understand you are trying to get me to see it from their point of view, but I still just don't at all. I would understand there decision if I had missed a payment, made a late payment, had a low credit score or any other justifiable reason. But none of these are the case, and there is truly nothing to indicate that I would not continue to pay my balance off as I always have!

So, they are just being huge jerks, and it really isn't fair to do this to me!

Message Edited by YogaDownload on 07-22-2008 09:56 AM
Message 19 of 21
Anonymous
Not applicable

Re: Business CC company raised my interest rate to 35%!!!

My apologies if my comments came across as overly harsh.  That was not my intent.  It was also not my intent to defend the CCC in their actions.  You are correct, however, that I was trying to get you to see it from their perspective, and to answer the questions you had posed about the CCC's motives and justifications.
 


YogaDownload wrote:
Why would they give me a limit of 10G if they don't ever want me to use all of it?

If only it worked that way.  As a general rule, CCCs will flinch if you use all the credit they have extended to you.  No, it's not fair, and I do feel for you.  Unfortunately, that is the way it works.  You would think that a CCC would be happy to let you use all the credit they have extended to you, right?  It means more interest for them, right?  No, for the most part CCCs like it when you use a little bit of your credit, pay a little bit of interest, and promptly pay in full after only a few months.  There are, of course, many, many exceptions, but as a general rule, this is accurate.
 
Yes, there are several CCCs that will not even blink if you carry a large balance for months and months on end.  Others like payment in full after several months, and still others get jittery after only a couple of months.  The best way to learn how to use your CCs is on forums like this one (particularly this one).  There are dozens and dozens of posts about how to keep different issuers happy, since the "rules of the game" really do vary widely from issuer to issuer.
 
Sorry again to hear about your ratejack.
 
Message 20 of 21
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