Bank of America Presents: Visa with the Vig!

[Rufus T. Firefly]

So I just got one of those "change of policy" mailings that credit card companies send out. I'll admit to being lazy about reading these, but Mrs. Firefly's a hawk where debt is concerned, so she read it through while hanging out in the kitchen with me (I was baking oatmeal raisin cookies, which seems far more important to me than understanding my finances).

Anyway, deep in the pages of fine print we learned that Bank of America now reserves the right, after 2 late payments on our part, to raise our card rates . . . to 32%.

We're never late, but that's not the point. I'm pretty sure those rates didn't even used to be legal. When the heck the nations major banks begin offering loan-shark rates on credit cards? And, really, if you're got people struggling to make their payments on time, how does raising their rates to 32% help accomplish anything other than speeding up that personal bankruptcy filing?

I guess I've been out of the country too long; when the heck did all this happen?

[DinoDoc]

Don't credit cards already charge interest at a much higher rate than bank loans?

[Lorizael]

Hey, just be glad they don't reserve the right to break your kneecaps.

[Rufus T. Firefly]

Originally posted by DinoDoc
Don't credit cards already charge interest at a much higher rate than bank loans?

I think they can, but it depends. The credit card we use most has a 7.9% interest rate, which can't be that much higher than bank loans. But I routinely get unsolicited offers for cards with interest rates in the mid-teens, so there's that.

And cash advances? Fuggedaboutit. 20-25%, even on a card with otherwise good rates.

Still, I'm sure I've never seen a credit card rate go above 30%. Lori's right -- that's kneecappin' country!

[snoopy369]

Wow... I have marginal credit at best, and even I carry a card below 20%

I would highly suggest moving to another card If your credit isn't good enough for the top offers, WaMu right now is aggressively pursuing credit business (I can tell because whomever is aggressively going after peopre with good rates gives me good offers with no annual fee, while the remainder of my tinderbox fuel is $25-$75 annual fee worthless stuff).

[Zevico]

Do credit cards earn much of a profit from collecting debts, or do they earn their income mostly through the small fee the stores pay them in every transaction?

[Kuciwalker]

32%? WTF?

[Nikolai]

That was high...

[Rufus T. Firefly]

Originally posted by Kuciwalker
32%? WTF?

Exactly.

We're not switching cards, because the regulary rate is a quite-reasonable 7.9%, and we're never, ever late with payments (we do automatic bill pay, so we don't have to worry about that). But still...32%! WTF, indeed.

[Tim_Augustus]

Originally posted by Rufus T. Firefly


Exactly.

We're not switching cards, because the regulary rate is a quite-reasonable 7.9%, and we're never, ever late with payments (we do automatic bill pay, so we don't have to worry about that). But still...32%! WTF, indeed.

Don't know what you're whinging about then. My mastercard charges interest at 16+% off the bat - I could pay an annual fee ($60) and get 55 day interest free periods on purchases, but no sweet single-digit rates... And I believe if you don't pay in that 55 days you get slugged the full interest

[DinoDoc]

Why do you need a credit card anyway?

[Lorizael]

Man, I'm starting to get the feeling that the interest rate on my credit card is a lot higher than it could be. It's my first card, and I have no previous credit, and I'm young... but still.

Not that it matters, since I'm only using it to build credit. I pay it off at the end of every month and I always have significantly more money in my savings account than I have credit card debt, so there's never a point at which I could be caught without enough money.

[Saras]

http://www.mobilecreditbaltic.com/content/investor/welcome_aim.asp

These guys rip 500-800% p.a. Unbelievable.

[DinoDoc]

Originally posted by Lorizael
Not that it matters, since I'm only using it to build credit.

Why do you feel the need to build an "I love debt" score? If you always have enough money to pay the bill off at the end of the month, why not just get a debit card?

[Japher]

credit cards are the devil

There is no reason to use one, not even to "build credit" which only means "to have debt".

Lorizael, what do you mean by "build credit" and once you have this credit what do you want to do with it?