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No. of Recommendations: 14
I just closed my Chase Advantage LOC account. I haven't used it since they jacked my rate to 28% three years ago. I had this account for over twenty years. I had never been late or missed a payment. When I talked to the rep, they informed me that my overall credit useage was too high, triggering the rate increase. That was three years ago or so. I BT'd the balance to another account and didn't think about it. Today, I got a bill from them for a $12 "annual fee". I phoned them and they removed the fee. I then closed the account. I have zero money owed to Chase and will never use them again. Their rate increase is an excellent example of predatory practice by the CC industry using the universal default clause.

Here is an even better story. A little over a year ago, I got a letter from MBNA advising me that based on my overall credit useage pattern of their account, that they were lowering my limit from $15k to $12k. Now mind you, I had never been late, missed a payment, or exceeded my credit limit. I kind of shrugged and went ok... After all, the only reason I had the account was because they had let me balance transfer about $12k at a fixed 7.9% or so. I had about $11k on the card and wasn't very concerned about the limit. Three months went by. I got a letter notifying me that my rates were being increased to 28%. I was stunned. I phoned them and said.. "I BT'd this money to you because of the fixed rate!" They explained that my account balance was TOO CLOSE TO MY LIMIT! I explained that the only reason that the account was too close was that they had arbitrarily reduced the credit limit. They didn't care. They refused to budge. I BT'd the balance to another account.

Both of these stories are examples of the flagrant predatory use of Universal Default by CC companies that pervade the industry today.


I thank God that my wife and I have finally come to our senses about credit. In the not too far off future (under a year) we will have zero unsecured debt.
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No. of Recommendations: 0
Yes, I think many of us have examples of the Universal Default clause hitting us in the butt.

A few years ago, before DH had met me (and become Foolish), he left for vacation and forgot to schedule his CC payments that were due before he got back. He couldn't get internet access from the remote island he was on, so he had to do it when he got back, and they were a few days late - less than a week. The two cards (Chase and Citibank) jacked his rates up from 12.9% and 7.9% to 28% and 29% immediately.

One phone call to Citibank and they brought the rate back down to 7.9%. The Chase card refused to budge and only recently has been coming down in dribs and drabs (with a phone call every three months) to 25% or so.

Fortunately that same Chase CC that still sees him as a credit risk because of that one late payment a few years ago, is perfectly willing to send him BT checks at 3.9% for life, so the whole balance got BT off and BT back on again to take advantage of the much lower rate!

:-P
Bethdig
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I had a similar story with MBNA a few years ago and refuse to ever do business with them. Except with my experience, it was even more weird.

I had applied for a second MBNA credit card and was denied for no really good reason, and that denial prompted them to look at "something" in my credit report that allowed them to reduce my credit line from $7500 down to $500 and raise my interest. I checked all my credit reports to see what horrible inaccuracy must've been on there to cause it, and nothing had changed. Nothing recently opened, balances lower than they had been in relation to my credit limits, no late payments in over 10 years. It was strange. I told them to cancel the card outright rather than lower my credit line like that. Then they put on my credit report that they had closed my account (not that I had), and it was the one time in my life that I didn't have anything in writing to back me up. I could not get that notation changed, although I did put a note on it, and I hoped that anybody in the future offering me credit would not hold it against me since my credit history was otherwise great.

I'm sure Chase will be doing something similar to me soon. I have all my debt rolled onto my Chase credit card at 4.9% for life (we're talking $20,000 out of a $23,500 credit line). I check my balances online every single day to make sure I don't mess up my payments and cause any default to make my rate skyrocket. I had freed up $3,200 in credit on that card and decided to transfer the last $3,000 from another card to it, also at the same transfer rate. So I get a call from their fraud department to ask if I had done that, and if I didn't call back in 24 hours, they were going to deny it. I called back and they allowed the check to go through. Fortunately I don't care what they do to my interest rate (I don't even know what the regular rate is) since I don't use it except to pay off the BT and have no intention of running a balance with them when this is finally paid off in 2 years. But I just know they're going to do something, based on what I've been hearing about Chase lately.
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I'm sure Chase will be doing something similar to me soon. I have all my debt rolled onto my Chase credit card at 4.9% for life (we're talking $20,000 out of a $23,500 credit line).

You could try making payments well above minimum. Also, if you're really concerned, I would BT to another card, even if it has a higher rate. Once you've been ratejacked, your Chase will effectively be usesless to you.
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What Chase cards are people referring to? I'm currently looking at their Chase Perfect card (6% rebates on gas purchases for the first 90 days, 3% after, and the 1% for all othe purchases).

I also have an MBNA Mastercard (since then bought out by B of A). And so with them I will check what my APR is. My WF Platinum VISA was Prime + 6.6 = 14.85 so I had them lower it to 9.9% temporarily for a year. Then in a year I can apply for Prime + 1.9 but with a new card number.

Gio
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So, would it be better to just keep the same two credit card accounts I have now (one was hiked to 19% the other 14% for no good reason) and keep paying them off rather than trying to transfer them to other teaser and lower-interest rate cards? If I transfer them, will those companies do the same thing and jack up the interest rates to 29% just for the fun of it? Would I be better off to just keep plugging away with Citibank and Discover with what they've done?

I pay my credit cards online, and on time---never late. There was not a single reason for them to jack up the rates. The Citi card is 2.9% for the life of the transferred balance (which is the bulk) and 19% on new purchases (which is less than half, but still a good amount of the balance). The Discover is 14% on the entire balance, and is the lesser of the two balances. I always pay more than the minimum on both balances---even if just $25 - $75.

I get new offers several times a week, but maybe "they're too good to be true" and there is a trick or two up their sleeves! Now I'm fearful to take the plunge and do a balance transfer.

Jen
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