The Consumer Credit Screwjob, Illustrated

Here's what we've been talking about: The credit card companies putting the screws to American consumers before the reforms go into effect in February.

Today, we received one of those "Changes to Your Account" notices - this time for a credit company which specializes in medical and dental care, which makes it even more insidious. First, the purchase requirements:

 

So the new changes apply to "Transactions made on or after the Effective Date."

Coincidentally, they also apply to "Transactions made before Effective Date."

Gee, that's fair. Everything I purchased under the old agreement now falls into the new agreement's new APR. And what would that be? The 11.99% we WERE paying? Yeah, right.

 

There it is. Loan shark rates. 29.99%. Not quite 30%, I know, but close enough.

The fucking audacity. Close to $20k in necessary dental work we both needed (and that's AFTER insurance), and they pull the rug out from under us by almost tripling the APR.

Oh, but we do have an opt-out option. We can refuse these new rates...BUT...

 

Some "right to reject," huh? We can reject it, but that would close the account. And as we've said time and time again, closing credit accounts knocks your credit score down substantially.

Folks, we're working our asses off to be fiscally responsible, but sometimes unexpected costs happen. And these animals...these bottom-feeders...these greedy bastards are making one last goal-line stand to screw us for every dollar they can.

If I don't opt out and close the account, this will never get paid off - so I have to take the credit score hit.

This is what we're up against - right there in black and white. We're screwed. The so-called credit card reform bill has been rendered totally and completely useless. They foolishly trusted these monsters to do the right thing - and all they want to do is kick us viciously in the collective balls.

I wish there was something this White House can do...but with Joe Biden in there, proud former senator of Delaware, the credit card capitol of the nation, I'm not going to hold my breath.

And before our conservative readers rejoice at my saying that, let me make it clear that this is the result of your beloved free market deregulated marketplace that has no government (or any) oversight. Pure unmitigated chaos - THAT is the "libertarian" cornerstone you so dearly embrace, and it's been in place long before this administration took office. We're seeing the fruits of your free market myth, your "libertarianism," and they're all rotten to the core.

The good news out of all this is eventually we'll get our financial house in order. We'll pay all this bullshit off one way or another. And once we do, we'll remember all those who fucked us over when we needed them most.

Their shortsightedness will come back to kill them. My only regret is that it won't come soon enough.

We welcome your suggestions. We've run out of ideas.

Comments

[Carl]

Simple(once the financial house is in order):

Snip the cards and send them to the company.

Maybe even include a message.

[Nancy]

Try to get a loan for the credit card balance even if it means refinancing a car - you will get it paid off sooner and pay less interest. Join a credit union, you get much better loan rates. Pick one credit card to use and try to pay it off every month and pick one that gives you something back - I am not sure who backs Target Visa's but they give me a 10% off day and I try to use that for basics like dog food, paper products, etc - and they give money to the school of your choice. My high school alma mater has received $1,000.00 from me in ten years. I have not received one of those letters from Target yet but I did from my Sears card, backed by Citi I think and my Chase card. I came so close to cancelling those two just because that letter made me so mad but I kept them just in case of emergency.

[mm]

When I had my own business I eventually made a good living and luckily didn't spend it all. I've been working for my former biggest customer for almost 10 years and haven't had a single raise. Also my department's hours have been cut back by 20% since LAST Thanksgiving. Still have the 5 day work week though. That's ELEVEN weeks pay that we're losing.

I ran my Amazon Visa up close to $10,000 paying for my girlfriend's vital dental work. Even though I was paying every month on time and over the minimum payment, my credit score went down because my balance was too close to my credit limit.

I had the money and could have paid it off in one shot, but they were only charging me 5.74% interest.

Three months ago they raised it to over 12% out of the blue. I'm in better shape than you are, but that's ridiculous. The banks are getting money for free from the Fed.

Meanwhile my girlfriend has one of those care cards and put $2500 worth of dental work on it that her son needed and she's paying 29.99%.

Welcome to indentured servitude.

[Scott R.]

Maybe you don't need to fret so much about your credit score. Seeing that most people are going to get dinged this way, the collective score we all get will go down. So in a relatve way, your's won't look so bad.

[Hoffmania]

Thanks for sharing, all. Keep 'em coming.

At this point, thanks to the credit card companies slamming down credit limits, I couldn't get credit now if I tried...so the credit score really doesn't matter now anyway. I'm happy to close them, pay them and get them out of my financial life.

[SB Brian]

My BofA card went to 29.99% several months ago. Then one month I wasn't alert enough on my statements to realize that they changed my due date up a week, so of course I was late when I made my payment on the same day of the month that it had been for years. Now it's 59.99%.

Thank goodness it's at a zero balance now - but not closed. Yet I still feel I have to watch it like a hawk to make sure they don't slap some random fee on there.

[Footiei]

Damned if you do damned if you don't. My husband and I have zero credit card debt, only a car and small (less than $9,000) personal loan and own our home outright. We did everything right but our credit score is junk because we have no debt...with college coming up for my son it may well be a huge problem.

[sergio]

the big banks fear credit unions so join one.

[Ugly Bugga]

Go out and sign up for as many credit cards as you can, then go shopping and max them all out. stash the goodies - somewhere safe, then file for bankruptcy. spend your days idly selling your stash on ebay.

[Silver Owl]

When they do that to me. I have no intentions of paying them. I'm going to give them what they want, losses and bankruptcy. Was a good business relationship while it lasted but they got psycho so whatevah.

I'm not that into credit rating nowadays either. It's all about whatever financial moron has an itch in which ever nut he favors for the minute.

Fuck 'em. Let them crash and burn with their piss poor business sense. Got nothing for them any more.

[legadillo]

I'm with Scott R. Fuck the score. The people who make decisions based on your "score" are the banks. Who cares what the fucking banks think? What have the banks done that would make us value their opinions? Find the lowest fixed-rate loan you can get (probably a credit union--if you aren't already a member, join one), take it, pay the usurers, cancel the card.

My husband will be fired from IBM in January. He's been there 19 years. He'd have had 5 weeks vacation in 2010. He's at the top of the pay scale and he's 55--they want him out so they can hire somebody half his age at half his price. With his unemployment, we'll have to live on one third the money we were making. In a year we'll be without his unemployment. I don't know what we'll do. But I know we'll have to fuck the score ourselves.

Just so you know we have our own shit pile to deal with and I'm not tossing off advice to you that's easy for me to say.

[Laura]

Husband and I are both students, and living off student loans (argh) but headed to the Promised Land of a Ph.D. Hubby had to leave school (long story) and simply could not find a job - he's one of those who has now stopped looking. We are able to make ends meet - our ends, not the credit card companies' - and have had to stop paying on our credit cards. To make matters worse, my son defaulted on a car I helped him buy (sigh, some folks just don't learn, huh?) and bankruptcy is fully in our future. I don't feel badly about this at all - we paid on our cards regularly, and frequently paid them off, only to use them again during the lean financial-aid-free months (see, June, July and August).

Had they not tried this crazy 30% and higher interest rate crap on us, we likely would still be using and paying. Now, after we file BK, there's no credit cards in our future, ever, ever again. I wonder how many folks will be taking this same tact?

I mean, I can't sweat the money out, no matter what they want. I tried working another job, but the hours are not there for me - if I risk my grades in school, I can be kicked out and lose the only paying job our family has. Sigh. It's indentured servitude all over again. And medical bills? Feh. I've not seen a doctor who isn't affiliated with the campus nurse's office in probably 10 years. And forget the dentist. It's just not happening. I've been lucky, though, not to get sick. Yet.

And I know that I'm never going to be able to pay off these loans - I'm going to die owing financial aid.

Hang in there.

[Bonnie]

Happy Thanksgiving, Hoff and family!

[a-j]

I haven't had a credit card in over 20 years; pay cash if I need something, or get a loan from my locally-owned bank. I don't give a flying fuck about my credit rating, either, which isn't bad, just non-existent. Works for me, but I'm one of those guys that march to the beat of a different drummer.

[Hoffmania]

We're all in the shitpile together. Thanks for all the thoughts and suggestions.

Our credit score dropped by a head-spinning 107 points just on the debt-to-credit ratio and nothing else. Everything's been paid on time in accordance with all our agreements - we just have no more credit ceiling and it's prevented us from getting ANY kind of loan right now.

Oh, and thanks for not trying to sell us anything from UFirst or any other of these sleazebag money merge accounts. I have a couple of friends who wanted to sell me their $3500 junk software (hey, times are tough for them too). I'm not sure why they think I have that kind of money to spend when I can get a book for ten bucks that shows me how to do the same thing.

Onward and outward.

[Omron]

Try to get a loan for the credit card balance even if it means refinancing a car - you will get it paid off sooner and pay less interest.