Related: Banks Betray Obama
Or HE BETRAYED YOU!
Actually, BOTH!
"Credit card firms raise fees before law changes" by Todd Wallack, Globe Staff | July 27, 2009
A Chase spokeswoman said the increase in minimum payments was necessary because some borrowers of the promotion were taking too long to pay off their loans. The company, said spokeswoman Gail Hurdis, is being a “responsible, careful lender.’’
Chase is but one of a number of major credit card companies that are jacking up interest rates and fees, or laying the groundwork to do so, before new federal legislation that cracks down on some of the practices goes into effect in February.
Bank of America, Chase, and Discover Card have switched many of their cards from fixed to variable interest rates that are tied to an underlying index. But since benchmark indexes are extremely low - the prime rate is near zero - analysts said credit card interest rates will almost certainly go up in the future.
Fees on foreign transactions have also increased. In May, Discover enacted a 2 percent foreign transaction fee. And some companies, including Bank of America, now levy a 3 percent transaction fee even if you buy an item online in US dollars, such as airline tickets, if the company happens to be based overseas. Chase also recently raised the fee for balance transfers by 2 percentage points, to 5 percent of the amount moved. Others increased the rate by one percentage point.
This as they made BILLIONS in PROFITS?
Increases in credit card fees are not new. Credit card companies reaped $19 billion from late fees and other penalties on consumers last year, up 78 percent since 2003, according to R.K. Hammer, a financial consulting firm.
Oh, it IS their PROFITS!!!!!!
Credit card companies said they need to adjust costs because of economic circumstance and new regulations that will make it harder to modify rates in the future. “The repricing enables us to preserve the safety and soundness of our business while continuing to lend,’’ Discover said in a statement.
Except no one is borrowing or lending right now for various reasons.
And is that what they are calling looting now? "Repricing?"
Bank of America said its changes, including moving to a variable rate, are in response to the new federal law. “It will enable us to continue to extend credit to credit-worthy customers while remaining prudent in our lending practices,’’ said spokeswoman Betty Riess.
But the higher costs are hitting customers particularly hard now, with rising unemployment, wage reductions, and other cutbacks leaving some consumers struggling to pay bills. Moreover, some cardholders can no longer just jump to another card company, because lenders have tightened their standards and are refusing new customers or limiting their borrowing.
The message from the banks: F*** YOU!
“A lot of people are trapped,’’ said Josh Frank, a senior researcher at the Center for Responsible Lending in Durham, N.C. Frank and other watchdogs said credit card companies are trying to recoup losses....
First thing you can do, Americans: stop paying the usurious f***ers!
“They’re trying to get their last licks in,’’ said Chi Chi Wu, a staff attorney with the National Consumer Law Center in Boston, which lobbied for the law....
But, but, but, weren't we supposed to be all in the boat together?
Consumer Action spokesman Joseph Ridout, a San Francisco advocacy group that tracks credit card fees:
"[Many customers told the organization they feel Chase pulled a] bait and switch. People read the fine print, but Chase essentially erased all the fine print and changed the terms. It’s a brazen attempt to sidestep the reforms that are on the way.’’
Chase originally offered a low-interest rate for balance transfers and other amounts charged to its credit cards until the balance was paid off. Although customers were required to pay a transaction fee, they were promised they could retain the promotional rate - typically around 3 percent to 4 percent interest - so long as they paid off at least 2 percent of the balance each month.
But Chase then determined that some of the borrowers in the promotion took too long to repay, and increased the minimum payment amount, to 5 percent, and imposed the $10 monthly charge - although it was rescinded after Attorney General Andrew M. Cuomo of New York complained.
“Tens of millions of Chase customers have taken advantage of our promotional low-rate financing over the last five years,’’ and most have paid it back within two years, said Hurdis, the Chase spokeswoman. “However, there have been a small percentage of customers that have not made as much progress in paying down these loans. Our desire is to have these balances paid back in a reasonable period of time.’’
Yeah, thanks for helping out and pitching in.
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Oh, right, you crooks are responsible for that.
