Consumer Complaints: We're raising your interest rate so you pay your credit card off faster...

Many consumers are feeling debt woes as the United States economy is in turmoil. Credit card companies essentially own their customers so long as the customers owe them money. The agreements which the customers accept when they sign up for a credit card give the companies the power to change the terms of the agreement at any time, for any reason at all, or for no reason at all.

This should motivate people to avoid credit cards as much as possible. And if you owe money to credit card companies, this should light a fire under you to pay the cards off as soon as possible. Regulators have received thousands of complaints from consumers whose credit limits have been suddenly decreased, credit limits increased, or whose accounts have been closed. The government is preparing to crack down on some of these abuses, but it hasn't happened yet.

One consumer reports to WalletPop the following:
I have 3 credit cards with Bank of America. They just went from 11.99% to 25.99%. I called them, got nowhere with the first person I talked to so I asked to speak with a supervisor.

I was told:

1) Yes, we realize you have NEVER been late with Bank of America on ANY of your cards.
2) Yes, we realize you have no delinquencies or negatives ANYWHERE ON YOUR CREDIT REPORT.
3) Yes, we realize you always pay more than your minimum not only on Bank of America but on all of your cards.

Their rationale was this:

You weren't making substantial progress paying these cards off in our eyes so we increased your interest rate to encourage you to pay them off (their exact words.) When I asked how increasing my interest rate was going to help me pay them off, he stated that doing so would encourage me to seek financing elsewhere to pay them off.

He stated that "everyone knows" credit cards are "short term loans" and that they are intended to be paid off quickly. Nevermind a minimum payment requirement, he states that is only to help you keep from incurring a fee if you can't make a (huge) payment in a given month.

After our conversation, I felt that what he said to me was, essentially, "We're going to put the screws to you just because we can. We know it will be very difficult for you to pay this card off now because of the added interest and that's out goal."

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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