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Regular Contributor
Lucid08
Posts: 213
Registered: ‎11-01-2007
0

Interest Rate Reduction??

Hi all!

 

I've been reading about the provisions of the CC Act that was passed a while back, and I was under the impression that a CC company was required to review your CR's within a certain time frame in order to reduce your APR as a compliance measure as directed by the CC Act if your credit situation has improved since incurring a rate jack on a CC.

 

Was this portion of the CC Act removed, changed or reworded somehow? I read a great many credit forums and I dont remember seeing a single case where someone has stated that their account had been reviewed, and their APR reduced as a result of improvements.

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New Contributor
werty7777
Posts: 113
Registered: ‎01-07-2011
0

Re: Interest Rate Reduction??

Interesting you bought this up. When I called to get NFCU to lower my rate since they jacked me prior to the law passing they said the couldn't lower it due to the same law. I applied for a product change and they claimed they would lower it but it didn't happen due to CSR error. Going back and forth with them now about it. A CSR told me not to worry about anything because they have to review all accounts affected by the law by mid/late FEB. I kindly pointed out the law doesn't require the lenders to do anything but review the accounts. She agreed and my fight continues with NFCU for a lower rate like they promised.

Established Contributor
Tazman81
Posts: 719
Registered: ‎06-23-2010
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Re: Interest Rate Reduction??

I don't think the law applied to standard interest rates.  I think it was in response to those that default and then show a good payment history afterwards.  It used to be if you defaulted, then your card stayed at the high "default' interest rate.  Now I think the card issuer is required to review your account 6 or 9 months (i don't know which) after you default and if you've been making payments on time, then lower your interest rate back down to what it was prior to default.  If this is incorrect, I hope someone with more knowledge on it will post.


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
Current Score: Eq: 692 (04/03/2013) Tu: 717 (04/03/2013)
Goal Score: Eq: 720 Tu: 740

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New Contributor
werty7777
Posts: 113
Registered: ‎01-07-2011
0

Re: Interest Rate Reduction??

Not true in my case and not true according to CSR (FWTW) I was at 13.99 and never paid late on any bill. Prior to the law passing they raised me to 17.99. Fast forward to this month and they promised to lower me back (hence my ongoing discussions with them) to 13.99 but didn't yet. That's a whole different story though....... The CSR said that all accounts affected by the law must be reviewed by FEB whatever, period. Granted I'm a novice and don't know the ins and outs of the law but I'm just going by what the CSR said and the fact I know I wasn't a default holder of the CC. In fact Chase did the same raise your rate move but I've had this card since before BK (over 9 yrs ago) and don't want to bother messing with a great help to my AAoA knowing I will only use them every 3rd month or so to show activity.

Valued Contributor
mauve
Posts: 2,487
Registered: ‎02-18-2010
0

Re: Interest Rate Reduction??

Based on what I remember of the CARD act, yes, after 6 months of on-time payments, they are supposed to take you from the default rate back to your prior rate.  Basically, if you were paying 15% interest, and then were penalized for a late and jacked up to 30%, after 6 months of on-time payments, they would have to bring you back down to the 15%.  If they jacked up your rates before the CARD act went into effect, there's no obligation to return it.  At least, that's what I remember being the case.


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Moderator
MarineVietVet
Posts: 14,902
Registered: ‎07-14-2009
0

Re: Interest Rate Reduction??


Tazman81 wrote:

I don't think the law applied to standard interest rates.  I think it was in response to those that default and then show a good payment history afterwards.  It used to be if you defaulted, then your card stayed at the high "default' interest rate.  Now I think the card issuer is required to review your account 6 or 9 months (i don't know which) after you default and if you've been making payments on time, then lower your interest rate back down to what it was prior to default.  If this is incorrect, I hope someone with more knowledge on it will post.


You are correct Tazman.

 

According to a review of some the provisions of the Credit Card Act:

 

If you are reported as delinquent on your credit card payments for 60 days your APR can be increased, but it must return to the old rate if you make 6 consecutive payments thereafter.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

New Contributor
werty7777
Posts: 113
Registered: ‎01-07-2011
0

Re: Interest Rate Reduction??

[ Edited ]

Not in any disagreeing with the fact they can raise rates with a late and then lower back down after 6 months. I was just answering the OP question if anyone had heard anything about accounts being reviewed. The past few post don't reflect my situation was my only point. I had no idea about the review until I ran into my only problem ever with NFCU just recently. To clarify here's is my situation.

 

Paid off all CC and felt since I was in a better place FICO wise I should get a better rate now. I was told that the same way they can't raise rates that they cannot lower them under the same law. Was told only way to lower rate was to apply for a second CC with NFCU and in the loan app they would note what I was trying to accomplish. Got a call from them, CSR said I would be approved for a second card and I told them that was not what I was trying to accomplish. She called CC approval Dept and explained what I was trying to do and they pulled my app (after hard inq) and gave me the option to move from a Nrewards card to a standard platinum card and they would lower me to 13.99. Since my rewards were only 1% I figure it was worth it. A week later I got my Plat card in the mail with a 17.99 rate so I called and ask what the? They can find no notes in my account as to what rate I was offered only the fact they withdrew my loan app. They said the would only lower my rate to 16.99 if I switched to plat card and it would stay the same if I didn't do the product change or my account was due to go under review in Feb in accordance with the law since they raised my rate prior to he enactment of it. They also told me that the CSR that originally changed interest rate incorrectly entered information in the system. Long story short I was livid and ask why would I even do something as stupid as that because it makes no sense to lose rewards at 1% to lose 1% on my rate. Ask that my case be sent back to approvals and sent up to supervisor level two weeks ago. Called this week and the CSR said she sees my discussion in my account and it is in the management level inbox and to expect a call in the next few days. That's where it is at now. I just want what was offered to me without another hard inq on my report. Once I get the resolution I will post in this forum for all to know. 

 

Hope this clarifies! Thanks!

Moderator
MarineVietVet
Posts: 14,902
Registered: ‎07-14-2009
0

Re: Interest Rate Reduction??


werty7777 wrote:

Not in any disagreeing with the fact they can raise rates with a late and then lower back down after 6 months. I was just answering the OP question if anyone had heard anything about accounts being reviewed. The past few post don't reflect my situation was my only point. I had no idea about the review until I ran into my only problem ever with NFCU just recently. To clarify here's is my situation.

 

Paid off all CC and felt since I was in a better place FICO wise I should get a better rate now. I was told that the same way they can't raise rates that they cannot lower them under the same law. Was told only way to lower rate was to apply for a second CC with NFCU and in the loan app they would note what I was trying to accomplish. Got a call from them, CSR said I would be approved for a second card and I told them that was not what I was trying to accomplish. She called CC approval Dept and explained what I was trying to do and they pulled my app (after hard inq) and gave me the option to move from a Nrewards card to a standard platinum card and they would lower me to 13.99. Since my rewards were only 1% I figure it was worth it. A week later I got my Plat card in the mail with a 17.99 rate so I called and ask **bleep**? They can find no notes in my account as to what rate I was offered only the fact they withdrew my loan app. They said the would only lower my rate to 16.99 if I switched to plat card and it would stay the same if I didn't do the product change or my account was due to go under review in Feb in accordance with the law since they raised my rate prior to he enactment of it. Long story short I was livid and ask why would I even do something as stupid as that because it makes no sense to lose rewards at 1% to lose 1% on my rate. Ask that my case be sent back to approvals and sent up to supervisor level two weeks ago. Called this week and the CSR said she sees my discussion in my account and it is in the management level inbox and to expect a call in the next few days. That's where it is at now. I just want what was offered to me without another hard inq on my report. Once I get the resolution I will post in this forum for all to know. 

 

Hope this clarifies! Thanks!


I never thought for a second you were disagreeing with anyone.  :smileyhappy:  I was just responding to Tazman and should have and could have been more detailed in my comment.

 

The written word is often not capable of showing intent. I think that's what makes threads heat up sometimes. The person reading a post is not always clear about the writer's intent and jumps to conclusions.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

New Contributor
werty7777
Posts: 113
Registered: ‎01-07-2011
0

Re: Interest Rate Reduction??

I was never upset I just thought the post was heading in completely other direction than intended from the OP. In fact with my last post I probably moved it yet another direction. :smileywink: I was just to trying clarify my limited knowledge of the law that people don't ONLY need to be in default status and then back to 6 mos good standing to get reviewed. Sorry marine if I was typing like as pissed off Seabee as that was not my intent.

New Contributor
werty7777
Posts: 113
Registered: ‎01-07-2011
0

Re: Interest Rate Reduction??

Ok I found exactly what was originally ask. In section 101 of the act it states this

 

 Requires a creditor that increases the APR based upon factors including the obligor's credit risk, market conditions, or other factors to: (1) consider changes in such factors in subsequently determining whether to reduce the APR for such obligor; and (2) reduce the APR when a review indicates a reduction.

 

From what I read that part of the law was effective Aug 22, 2010 therefore "reviews" must take place by Feb 22, 2011. So it will be interesting if any posters chime in next couple months and post that their lender reduced their rates.


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