Credit Card Freeze...

[tele-rain]

A friend of mine was just telling me that she heard it's possible to freeze your credit card, and it should be done now, because in the new year, or maybe even as soon as December, banks will be jacking up their APRs and interest rates, etc. I just read one horror story about a couple who's minimum payment was more than doubled on a card they've had for years, never missed a payment, and has excellent credit on, for no reason other than just because they could.

So is freezing your card really possible? I keep trying to find info on the web, but all I'm finding is freezing your credit report, not your actual cards. Freezing meaning you can't even use it yourself, but you're paying it down with the same rates it was frozen at. I can't imagine this to be possible without some more messed up effects down the road, but I'm clueless with all this stuff so it's hard for me to grasp.

Any financial wizards on here can clue me in, in the simplest, lay(wo)man terms possible?

[asatfan]

I think they have to give you a certain amount of notice before the new rate takes effect. You should have the ability to "opt out", which means your account will be closed, but you will be able to continue paying at the old interest rate until your balance is zero.

[chet]

They can do whatever they want to right now. I'm paying mine off and not going to use them anymore. It's too rediculous.

[boneyguy]

Yes. They can do what ever they want, when they want. According to what I know credit card companies are not legally bound to give you any notice nor reason to increase your interest rate. They are essentially a financial autocracy.

[cowboytwang]

The opt-out law took affect in Aug.
The right to opt out of interest-rate and fee increases and the right to cancel their accounts while paying off the balances under the old, lower interest rates.

Starting 2010 they have to give 45 day notice of interest-rate and fee increases, and you have the right to opt out if you don't want to pay the higher fee. It cancels your account and you pay off the balance at your current rate.

Right now it's like Chet said, a free for all with the banks raising rates, fee, and lowering credit limits. Everything changes in Jan, but I guarantee they will find every little loophole they can by Feb to get all they can from every card!

[boneyguy]

Originally Posted by cowboytwang

The opt-out law took affect in Aug.
The right to opt out of interest-rate and fee increases and the right to cancel their accounts while paying off the balances under the old, lower interest rates.

Starting 2010 they have to give 45 day notice of interest-rate and fee increases, and have the right to opt out if you don't want to pay the higher fee. It cancels your account and you pay off the balance at your current rate.

Right now it's like Chet said, a free for all with the banks raising rates, fee, and lowering credit limits. Everything changes in Jan, but I guarantee they will find every little loophole they can by Feb to get all they can from every card!

Okay. It appears the law has changed in this regard. Good. The whole credit card game is woefully underregulated in my opinion.

[jkingma]

They can increase the rate to 100% on mine if they want. I only use it on holidays out of convenience, or for online purchases. I always pay my balance off when I get the bill and if I don't think I can, then I don't use it. Simple.

[hannigan]

Originally Posted by jkingma

They can increase the rate to 100% on mine if they want. I only use it on holidays out of convenience, mainly for online purchases. I always pay my balance off when I get the bill and if I don't think I can, then I don't use it. Simple.

Me too and the credit card company hates us for it. They should be called debt cards. Many companies are putting yearly fees on accounts that are paid off regularly. The only reason I have one is for online purchases. I still feel like a sell out when I use one. And I will not even mention the RFID chip with all your info on the card.

[tele-rain]

Originally Posted by cowboytwang

The opt-out law took affect in Aug.
The right to opt out of interest-rate and fee increases and the right to cancel their accounts while paying off the balances under the old, lower interest rates.

Starting 2010 they have to give 45 day notice of interest-rate and fee increases, and you have the right to opt out if you don't want to pay the higher fee. It cancels your account and you pay off the balance at your current rate.

Right now it's like Chet said, a free for all with the banks raising rates, fee, and lowering credit limits. Everything changes in Jan, but I guarantee they will find every little loophole they can by Feb to get all they can from every card!

OK so, if I'm getting this right, I can first make sure I haven't gotten any notice yet of a rate increase. If I did, I can see if I can still opt out of that "offer", and if not, wait for them to send me notice, and then I can decide to reject and opt out if I'd like?

It's just crazy, I've always been horrible with my finances and only the last 10years have I started to grasp the severity of my ignorance. Now I'm stuck in the vicious cycle of whopping minimum payment, and paycheck $$ going to other bills, not having enough to make a good enough dent in the card with the debt, etc. So I'm thinking this opt out thing may be good for me. I'll have to learn to be extra tight, use the other card with no balance as long as I pay it off each month, and slowly kill the outstanding debt and say bye bye to that card.

[daddyopapa]

[chet]

Originally Posted by tele-rain

OK so, if I'm getting this right, I can first make sure I haven't gotten any notice yet of a rate increase. If I did, I can see if I can still opt out of that "offer", and if not, wait for them to send me notice, and then I can decide to reject and opt out if I'd like?

It's just crazy, I've always been horrible with my finances and only the last 10years have I started to grasp the severity of my ignorance. Now I'm stuck in the vicious cycle of whopping minimum payment, and paycheck $$ going to other bills, not having enough to make a good enough dent in the card with the debt, etc. So I'm thinking this opt out thing may be good for me. I'll have to learn to be extra tight, use the other card with no balance as long as I pay it off each month, and slowly kill the outstanding debt and say bye bye to that card.

Don't use them at all and pay off one first then pay off the other if you have more than one. This is a bad time to have credit cards at all.

[tele-rain]

Originally Posted by chet

Don't use them at all and pay off one first then pay off the other if you have more than one. This is a bad time to have credit cards at all.

That is the main goal, of course. but I'm saying using the Amex with no interest for online purchases, or emergencies but making sure to pay it each month so it doesn't create a balance.

But I'm going to tighten my belt even more in the next few months. I have some unavoidable expenses coming up in Nov, a wedding and a 75th bday. But I'm going to refrain from other social activities, much to the dismay of my friends. They always give me crap when I tell them I can't afford it, thinking I'm just being lazy or cheap. I should also start that search again for extra work to do at home, if you guys recall a while back I posted a thread about that sort of thing. Time to check into that again.

Ugh, I'm super depressed now.

[chet]

You'll be happy when you pay of those dang CCs.

[Eric Karonen]

I use my credit card as often as I can, but there is no debt load. I get a kickback .. that's why I use it. I pay it off every month and haven't paid a penny of interest in over 25 years, but have accumulated hundreds of dollars in bonus money (actually over a thousand, but I used the free dough for this and that).

The rates the card companies charge are out of this world ... does the word usury come to mind ... but if you can control your spending, some credit cards have a lot to offer on the side.

[tele-rain]

Originally Posted by Eric Karonen

I use my credit card as often as I can, but there is no debt load. I get a kickback .. that's why I use it. I pay it off every month and haven't paid a penny of interest in over 25 years, but have accumulated hundreds of dollars in bonus money (actually over a thousand, but I used the free dough for this and that).

The rates the card companies charge are out of this world ... does the word usury come to mind ... but if you can control your spending, some credit cards have a lot to offer on the side.

I've heard about those sort of benefits too but I always assumed there's hidden fees or they are still gonna get ya somehow.

When I went into my acct before, it told me I had $27.00 accumulated "extra cash" at no fee, interest. etc. I didn't look into it cuz it sounds like one of those if it sounds too good to be true things, it usually is. But perhaps I should research that bit further.

[Eric Karonen]

Originally Posted by tele-rain

I've heard about those sort of benefits too but I always assumed there's hidden fees or they are still gonna get ya somehow.

When I went into my acct before, it told me I had $27.00 accumulated "extra cash" at no fee, interest. etc. I didn't look into it cuz it sounds like one of those if it sounds too good to be true things, it usually is. But perhaps I should research that bit further.

I pay zero fees. It may be different elsewhere, but here in Canada, there are several credit cards that one can use, depending on the kickback they want.

[Ward]

Originally Posted by Eric Karonen

I use my credit card as often as I can, but there is no debt load. I get a kickback .. that's why I use it. I pay it off every month and haven't paid a penny of interest in over 25 years, but have accumulated hundreds of dollars in bonus money (actually over a thousand, but I used the free dough for this and that).

The rates the card companies charge are out of this world ... does the word usury come to mind ... but if you can control your spending, some credit cards have a lot to offer on the side.

I wish I had your self control. I get the upside of those rewards points, but for me it's safer just not to go there, because everytime I'm used a credit card with that idea in mind, I never pay off the full balance and end up paying a lot of interest. I finally paid off my cards a couple months ago, and that's it!

With respect to usury, it's interesting that most states specifically exempt financial institutions from usuary laws. Theoretically the policy is that high interest loans are useful for commerical bridge loans, especially on real estate deals, but the exemption of credit card companies makes no sense. There is no reason for the majority of Americans (including me) to use credit cards. They only bring misery.

[Eric Karonen]

Originally Posted by Ward

I wish I had your self control. I get the upside of those rewards points, but for me it's safer just not to go there, because everytime I'm used a credit card with that idea in mind, I never pay off the full balance and end up paying a lot of interest. I finally paid off my cards a couple months ago, and that's it!

With respect to usury, it's interesting that most states specifically exempt financial institutions from usuary laws. Theoretically the policy is that high interest loans are useful for commerical bridge loans, especially on real estate deals, but the exemption of credit card companies makes no sense. There is no reason for the majority of Americans (including me) to use credit cards. They only bring misery.

I was a bit older than you when I finally learned my lesson ... slow learner here! Got kicked in the ass a few times in early days.

Really, though, when you get older, there are other avenues of credit if you need it at a fraction of the plastic rates.

[edhead]

Originally Posted by tele-rain

OK so, if I'm getting this right, I can first make sure I haven't gotten any notice yet of a rate increase. If I did, I can see if I can still opt out of that "offer", and if not, wait for them to send me notice, and then I can decide to reject and opt out if I'd like?

I did this when they wanted to jack up the interest rate from 10.9 to 24.9. Closed the account and keeping paying it off.

[still_fiddlin]

Here's one link I found describing the new US law:

http://www.creditcards.com/credit-ca...tions-1282.php

You can use a debit card in most cases for online purchases, or anywhere that takes a credit card, really, just don't tell them it's a debit card. Of course, you have to have money in the account, but it works. You *don't* have the legal protection of a $50 limit on loss like credit cards, so be a bit more careful with that #. (Most banks will give you that protection, but you have to read their terms. Unlike credit cards, it's not legislated, so could change at their whim, as well.)

[jjh37854]

Originally Posted by chet

They can do whatever they want to right now. I'm paying mine off and not going to use them anymore. It's too rediculous.

+100000!!!!!

[cbnutt]

are the debt consolidation company ok to use ? i think they get the cc companies to settle for a lower amount and cut your payments down ?? are these ok to use ?

[SimpleOne]

Originally Posted by hannigan

The only reason I have one is for online purchases.

I have a credit/debit card from a credit union...I try to only use the debit part of the card.

Even when using the credit card aspect of it, the bill still reverts to being a debit card.

So no interest, and my financial institution is partly owned by me, as a member. Highly recommended.

There is a reason why the big banks were pushing so hard to irradicate credit unions.

Amazingly the knuckleheads in DC did not go for it.

[tap4154]

Originally Posted by chet

Don't use them at all and pay off one first then pay off the other if you have more than one. This is a bad time to have credit cards at all.

Yep, many years ago I got into way too much CC debt without realizing it (CC debt denial), and about 15 years ago just began working harder and spending less, and paying one after another off. I didn't want to go BK. I created the debt, so I was going to pay it off.

Sure was a great feeling the day I wrote a check to completely pay off the last one

Now, while I still have several open with no balance and no membership fees, I only use one for online purchases etc, and pay it off each month. They actually tried to raise my interest rate on it 6 months ago (for no valid reason) to 21%, and I called and raised hell. They lowered it back down.

[Wardpike]

Originally Posted by daddyopapa

Quoted for Truth!



Best regards,

Ward

[Twang King]

typical banks, we bail them out of trouble and then they turn us over and give it us up the ass.

[need2retire]

Originally Posted by Eric Karonen

I use my credit card as often as I can, but there is no debt load. I get a kickback .. that's why I use it. I pay it off every month and haven't paid a penny of interest in over 25 years, but have accumulated hundreds of dollars in bonus money (actually over a thousand, but I used the free dough for this and that).

The rates the card companies charge are out of this world ... does the word usury come to mind ... but if you can control your spending, some credit cards have a lot to offer on the side.

Me too. I hardly use cash anymore. I use my Costco AMEX when ever I can ... even for a $1 purchase. AMEX pays 1-3% cash back ... and they do add up.
Just calculate your expense for the year (food/gas/internet/etc) and you'll see how much $ your getting back. That could pay for your next guitar :-) But you do have to make sure you pay in time.

Banks are smart though, they don't let you pay your mortgage via credit card ... otherwise, I would use it to reduce my mortgage interest by another point.

[Joe-Bob]

Originally Posted by Twang King

typical banks, we bail them out of trouble and then they turn us over and give it us up the ass.

Isn't it nice how that worked out?

[hannigan]

Originally Posted by Joe-Bob

Isn't it nice how that worked out?

If they are too big to fail are we too small to succeed?

[Joe-Bob]

Originally Posted by hannigan

If they are too big to fail are we too small to succeed?

Hey wait a minute! You're not supposed to put 2 and 2 together!

[dented]

The way I read the news about the changes, affects me like some of you in this way. I have good credit and pay off my card before the bill comes. I have a low interest rate through my credit union that I own as a member like some of you. Because of the current economic times and others defaulting on large loans such as SBA loans and mortgages they will now charge the low risk members fees. This is because they do not make any money on us paying before they get a chance to finanace our purchases.

The charges will come in the form of a yearly charge for the card and higher interest rates should you get caught financing your purchases. Being a smart shopper is going to cost us to recoup the damages.

[outbreak]

I get points for using my cards which i can cash in for gift vouchers/prizes/holidays whatever so i use mine whenever i remember to. That being said i pay mine off at the end of every month and have never had to pay any interest. I didn't even know you could keep using your card if you hadn't paid off the month before

[cowboytwang]

So today the US House voted to move up the date of the new Credit card laws.
They were supposed to take effect Feb 2010, but the banks have been playing bad, and have increased the average lowest advertised interest rate 20% since congress passed this legislation back in May.
So the now congress wants the changes to take effect as soon as it passes the senate to try and stop banks from doing any more harm to us and themselves.

http://www.bloomberg.com/apps/news?p...d=aOdUExs1VqMI

[tiktok]

Originally Posted by outbreak

I get points for using my cards which i can cash in for gift vouchers/prizes/holidays whatever so i use mine whenever i remember to. That being said i pay mine off at the end of every month and have never had to pay any interest. I didn't even know you could keep using your card if you hadn't paid off the month before

Going forward, I strongly encourage you to read documents before you sign them.

[Westerly Sunn]

I've never been possessed of abundant financial acumen. Nor have I ever been the most fiscally prudent steward of my own best interests... I have; however improved with age. Back in the mid 90's I let two or three cards get out of hand and when I woke up, I bore down and got 'em all paid off. Having done so, I naively canceled all my CC accounts... I was surprised to discover that the elimination of all revolving debt resulted negatively against my credit rating... I have one card now, which until a recent barn renovation project, I have kept paid off every month. The rewards have been good to me... and Amazon... I'm reaching a point on the barn where I can hold up and get that card cleared again!

[yonie]

Interesting to read this, here in the Netherlands people don't live on credit as much as you guys in the USA. Whilst it seems normal to do so for you, it's considered bad practice here.

[chet]

Originally Posted by Eric Karonen

I use my credit card as often as I can, but there is no debt load. I get a kickback .. that's why I use it. I pay it off every month and haven't paid a penny of interest in over 25 years, but have accumulated hundreds of dollars in bonus money (actually over a thousand, but I used the free dough for this and that).

The rates the card companies charge are out of this world ... does the word usury come to mind ... but if you can control your spending, some credit cards have a lot to offer on the side.

I'd say that 99% of the people who have them wouldn't have the self control to be able to do this.

I'd also say that you'll probably lose any kickbacks in the near future. Most banks made too many bad loans and gave credit cards to people who won't be able to pay them off due to the economy, job loss and other misfortune.

[chet]

Originally Posted by cbnutt

are the debt consolidation company ok to use ? i think they get the cc companies to settle for a lower amount and cut your payments down ?? are these ok to use ?

I heard that they're just another scam to get your money.

[Eric Karonen]

Originally Posted by chet

I'd say that 99% of the people who have them wouldn't have the self control to be able to do this.

I'd also say that you'll probably lose any kickbacks in the near future. Most banks made too many bad loans and gave credit cards to people who won't be able to pay them off due to the economy, job loss and other misfortune.

Chet: It took me many years to figure out the discipline to control a credit card, and no, I won't lose the points I've earned. We have a solid financial system in place up here in Canada, much different from the U.S. For the most part, we were spared the woes that hit you guys, however, the interest rates are no different.

[tele-rain]

Originally Posted by chet

I heard that they're just another scam to get your money.

I've heard the same thing about those consolidation places, I don't remember the details or logistics but you often end up worse off than with the original debt.

What about the bankruptcy option? I've heard that messes up your credit for 7 - 10 years, but is it a viable solution? Can you still be employeed and file for bankruptcy, or do you have to be one step away from living on the street? If you're unemployed, does it have to be that you were laid off/fired, or can you quit your job and file? And what exactly happens to your debt? Do they take your car away if you're financing/leasing that? What if you're responsible for a loan you co-signed for someone, how would your bankruptcy affect that?