topic Re: Credit Card Rate Increases....profile of who's getting hit in Credit Cards

Credit Card Rate Increases....profile of who's getting hit

DI — Wed, 21 Oct 2009 15:33:53 GMT

I wish I can figure out who Citi, BOA and Chase giving rate increases to. Is it people with big balances on multiple cards? Is it people with maybe a recent late payment on their mortgage, or someone who refinanced their mortgage? Is it people who regularly not pay in full?

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 15:42:24 GMT

@DI wrote:
I wish I can figure out who Citi, BOA and Chase giving rate increases to. Is it people with big balances on multiple cards? Is it people with maybe a recent late payment on their mortgage, or someone who refinanced their mortgage? Is it people who regularly not pay in full?

All of the above, plus numerous other factors. Most banks have internal scoring programs which rate risk based on a multitude of factors. I would doubt any one single factor can be highlighted as the "one". Unless you know all the variables used by the bank's computer system, there is no way to determine the likelihood of any AA.

Re: Credit Card Rate Increases....profile of who's getting hit

DI — Wed, 21 Oct 2009 15:48:12 GMT

I would like for those who are stating their rate increased to 29.99 give a possible reason for the increase. Many are streaming mad when they get RJ'ed, but not telling the whole story. They only report they never been late.

Message Edited by DI on 10-21-2009 10:48 AM

Re: Credit Card Rate Increases....profile of who's getting hit

score_building — Wed, 21 Oct 2009 15:54:57 GMT

@Anonymous wrote:
@DI wrote:
I wish I can figure out who Citi, BOA and Chase giving rate increases to. Is it people with big balances on multiple cards? Is it people with maybe a recent late payment on their mortgage, or someone who refinanced their mortgage? Is it people who regularly not pay in full?
All of the above, plus numerous other factors. Most banks have internal scoring programs which rate risk based on a multitude of factors. I would doubt any one single factor can be highlighted as the "one". Unless you know all the variables used by the bank's computer system, there is no [reliable] way to determine the likelihood of any AA.

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 16:15:33 GMT

I run about $5K in ads on one card every month (always PIF' but never $0 ballance) Use another for about $5K in monthy BS (again always PIF). Third one is general I want stuff (vacation in December is on it right now) it will get PIF. But they report so if you only look at 'overall debt and not specific payment history - yeah, it looks 'bad' and if you don't have financials - it looks real bad (lots of HHI due to military retirement and trust funds) - but COMMON sense says that if 10K balances are paid every month then there are assets.

I guess that I run anywhere from 10-12 K a month onto cards and PIF them - but instead of prepaying the charges I just PIF the previous month's balance (i'm not tweaking score right now - no reason to). The CITI card had a 1500 balance before the car repairs of 2K... and I lost 2 transactions last month (okay not lost but delayed) which is why I didn't clear the 1500 and the car repairs hit between due and statement dates (blam $3500 on the statement)

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 16:20:22 GMT

OP - You asked for specifics about people who have just had Citi raise their interest rate to 29.99%, so that is the content of my reply.

I just received my notification from Citibank yesterday that they were raising my rate to 29.99%. My situation is as follows: I have had this card for 11 years and have never been late. I am carrying a balance of about 11,000 dollars, half of which is at the regular purchase rate (11.99% plus prime) and the other half at 5.99% for the life of the loan. About 5 months ago I underpaid my minimum by less than $2, at which time they raised my rate to the default. I called and negotiated with a supervisor, since this was obviously a one time, very minor mistake, and they returned my account to the original rate. I have another card with them that I have had for 20 years, which is at 11.99%. I also have a Home Depot Card and a Sears card (6 years and 22 years, respectively), both of which are handled by Citibank. My credit score is 678 (last time I checked...I'm sure that's about to change, since I told Citibank to close my account, which is going to royally screw up my ratio). When I called to try to negotiate with them, I was told in no uncertain terms that I could either opt out (cancel the account) or agree to the 29%. Hope this information helps.

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 16:23:07 GMT

I don't believe anyone is immune to ratejacking. As for myself, I have zero credit card debt, spotless history, scores in low 800-high 790's, and I've been hit with APR increases from all of my creditors, except Amex. Most of my rates went from 7.99-10.99 to 14 and 15%.I PIF, so it's not something I've paid close attention to.

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 16:59:42 GMT

I would have to agree with the above reasons, and also the banks are probably looking at the overall credit exposure. Credit limits and the ability to run up the balances now, with the possibility to not be repaid is causing the banks to try to be preventive. Its just another example of why we should carry small to no balances at all and not worry about the APR on the account..

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 17:43:28 GMT

The banks are finding ways to make more profits some who never charged and annual fee will start receiving one and others are raising int rates. I don't think it matters they are looking at who carries a balance and who does'nt and finding ways to make money off the ones that don't carry a balance like af and raising the rates on the ones that do carry a balance. Some are getting rj even though they never carry a balance. Citi was just in the media about closing accounts. Citi will have even more default after the first of the year along with Chase.

Re: Credit Card Rate Increases....profile of who's getting hit

DI — Wed, 21 Oct 2009 17:51:07 GMT

@Anonymous wrote:
The banks are finding ways to make more profits some who never charged and annual fee will start receiving one and others are raising int rates. I don't think it matters they are looking at who carries a balance and who does'nt and finding ways to make money off the ones that don't carry a balance like af and raising the rates on the ones that do carry a balance. Some are getting rj even though they never carry a balance. Citi was just in the media about closing accounts. Citi will have even more default after the first of the year along with Chase.

BOA is only conducting a test to charge some of its customers an AF who PIF monthly. Are you saying people are going to charge xmas, and skip out on the bill in January?

Message Edited by DI on 10-21-2009 12:51 PM

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 18:38:55 GMT

I just wanted to update my reply in case this information may help anyone else who got hit with this rate hike from Citi...

I called them back a few minutes ago to see if I could speak with a supervisor about the account I closed yesterday, and I was told that the rep who closed my account (and had told me I had no choice other than accepting the 29.99% hike) was supposed to have offered a third option - to keep the account open at my current rate for 6 months (and hopefully pay it off) and that the rate would then go to the 29.99%.

Normally with Citi, if you close an account, you cannot re-open it, but the guy I spoke to got approval to re-open it and give me this 3rd option since I had not been aware of it upon closing my account yesterday. (I think it also helped that I was reeeeeally nice to him and I told him that I certainly didn't want to stop doing business with them after this many years.)

This option works better for me because the damage that would have been done to my credit score far outweighs the possibility that I may not have the balance fully paid off before the 6 months is up. Closing this account would have meant losing one of my oldest accounts and losing $17000 from my available credit.

So, for anyone who got caught by this rate hike, just be aware that they are supposed to offer you this third option as long as the hike was not due to a late/short payment.

Re: Credit Card Rate Increases....profile of who's getting hit

DI — Wed, 21 Oct 2009 18:55:38 GMT

It would be great if there was an option to reduce the CL rather than raise the rates. I think that would satisfy the banks reason for the rate increases.

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 19:19:53 GMT

I would rather have the RJ than the CLD. If you PIF one matters and the other doesn't.

Re: Credit Card Rate Increases....profile of who's getting hit

score_building — Wed, 21 Oct 2009 19:31:42 GMT

@Anonymous wrote:
I would rather have the RJ than the CLD. If you PIF one matters and the other doesn't.

Agreed, I would also rather have RJ over CLD.

Re: Credit Card Rate Increases....profile of who's getting hit

DI — Wed, 21 Oct 2009 19:35:24 GMT

@Anonymous wrote:
I would rather have the RJ than the CLD. If you PIF one matters and the other doesn't.

Agreed. I forget about that.

Message Edited by DI on 10-21-2009 02:35 PM

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 19:53:20 GMT

Here is a link to a Huffington Post article on the subject. Quite interesting and well written.

http://www.huffingtonpost.com/eva-norlyk-smith-phd/credit-card-companies-are_b_327709.html

Re: Credit Card Rate Increases....profile of who's getting hit

DI — Wed, 21 Oct 2009 19:59:15 GMT

@Anonymous wrote:
Here is a link to a Huffington Post article on the subject. Quite interesting and well written.

http://www.huffingtonpost.com/eva-norlyk-smith-phd/credit-card-companies-are_b_327709.html

Citi is saying Happy Holidays, but just not at its expense. They are staying out of the poor house.

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 20:14:45 GMT

Any idea why I can't access that link?

Re: Credit Card Rate Increases....profile of who's getting hit

DI — Wed, 21 Oct 2009 20:20:33 GMT

@Anonymous wrote:
Any idea why I can't access that link?

I copy and paste. worked for me.

Re: Credit Card Rate Increases....profile of who's getting hit

Anonymous — Wed, 21 Oct 2009 20:20:41 GMT

@Anonymous wrote:
Any idea why I can't access that link?

Try googling:

citi credit card rate increase.

The article should be the first post on google.