chase freedom wants to raise apr or close account?

[damac2004]

this is the first time i have experienced something like this with a credit card.  i got a letter in the mail that says either accept an apr raise of almost 2% or i can opt out and close the account.  is this normal?   never a late payment.  this past year i did take advantage of an interest free period and had the card close to maxed out sometimes as i was recovering from a surgery and out of work. 

i just happened to be in the process of rebuilding my credit numbers and payed this card off days before i got the mailing.

like i said this is a new one for me and it just makes me curious if perhaps the credit card companies look to do this to people that are heavily using their credit to make more money and trap them, or if they even go further and do soft pulls or something on peoples credit on their own, etc.

[Anonymous]

New to me. Perhaps someone else in the forum has heard of this.

[Anonymous]

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@damac2004 wrote:

this is the first time i have experienced something like this with a credit card.  i got a letter in the mail that says either accept an apr raise of almost 2% or i can opt out and close the account.  is this normal?   never a late payment.  this past year i did take advantage of an interest free period and had the card close to maxed out sometimes as i was recovering from a surgery and out of work. 

i just happened to be in the process of rebuilding my credit numbers and payed this card off days before i got the mailing.

like i said this is a new one for me and it just makes me curious if perhaps the credit card companies look to do this to people that are heavily using their credit to make more money and trap them, or if they even go further and do soft pulls or something on peoples credit on their own, etc.

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Welcome to the world of credit. We'll give you credit because you don't need it. What, you need credit? Here's the terms of the credit, subject to change at our discretion.

[Anonymous]

It's not abnormal. Banks do that pretty often, of course to make more money. But the reason usually have less to do with your spending pattern than with general trends (2.3% of the people with your FICO score range are defaulting with them, instead of the nornal 2.2%, for example. just pulling number out of my a**, don't quote me on this).

Bottom line, yes, they're trying make more money. But no, probably not because you're using your card alot (as long as you pay them).

[Open123]

With the Card Act, I was under the impression an Issuer cannot raise APR, unless you were late on a payment.

[pizza1]

mmmm, i wonder if it has to do with the new CC laws that were passed, and they are raising the interest rates on some or all. Either accept or lose the card. Id just accept it, and then later down the road see if you could get it decreased. Call into CS and ask about it. Im stumped as well.

[fury1995]

@Open123 wrote:

With the Card Act, I was under the impression an Issuer cannot raise APR, unless you were late on a payment.

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I believe the current balance cannot be subjected to the higher APR.

It's only for future purchases.

Also, I bet there was some kind of notice that looked like junk mail informing the OP of the APR change.

You can opt out of the higher APR by paying the remaining balance and not using it for more purchases and I believe it just expires.

Sometimes the APR is also accompanied by a BT offer with a lower rate and reduced a APR for purchases during the BT time frame.

Card issuers sometimes do this to get dormant cards active again is the customer rarely uses it or always PIF.

Seems contradictory since there is high risk of the cusromer closingthe account but it's kinda use it or lose it in their heads.. I guess.

[Anonymous]

Your balance is 0? If you want the card just accept it and always pay in full. Then they get 0 interest.

Happened to me many years ago-but I did have a substantial balance transfer with a special rate of 2.99% until paid off (no time limit) 

The account had been open for several years, I had never been late, and always paid over the minimum. 

[longtimelurker]

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@fury1995 wrote:

@Open123 wrote:

With the Card Act, I was under the impression an Issuer cannot raise APR, unless you were late on a payment.

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I believe the current balance cannot be subjected to the higher APR.

It's only for future purchases.

Also, I bet there was some kind of notice that looked like junk mail informing the OP of the APR change.

You can opt out of the higher APR by paying the remaining balance and not using it for more purchases and I believe it just expires.

Sometimes the APR is also accompanied by a BT offer with a lower rate and reduced a APR for purchases during the BT time frame.

Card issuers sometimes do this to get dormant cards active again is the customer rarely uses it or always PIF.

Seems contradictory since there is high risk of the cusromer closingthe account but it's kinda use it or lose it in their heads.. I guess.

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Right,the rules are  no rate changes in the first year, 45 day notice of increase, intro APRs must last at least 6 months.   So long as it is on new purchases (and the card is older than a year) this seems ok (from the CARD Act viewpoint)

[Closingracer99]

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@Anonymous wrote:

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@damac2004 wrote:

this is the first time i have experienced something like this with a credit card.  i got a letter in the mail that says either accept an apr raise of almost 2% or i can opt out and close the account.  is this normal?   never a late payment.  this past year i did take advantage of an interest free period and had the card close to maxed out sometimes as i was recovering from a surgery and out of work. 

i just happened to be in the process of rebuilding my credit numbers and payed this card off days before i got the mailing.

like i said this is a new one for me and it just makes me curious if perhaps the credit card companies look to do this to people that are heavily using their credit to make more money and trap them, or if they even go further and do soft pulls or something on peoples credit on their own, etc.

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Welcome to the world of credit. We'll give you credit because you don't need it. What, you need credit? Here's the terms of the credit, subject to change at our discretion.

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And If they did that a lot no customer would use their product and then it wouldn't exist ..... There is a fine line between that and trying to keep the peace lets say that....