Punctual Payers Face Higher Rates From Card Companies (Update1)

[BR_Parkway]

http://www.bloomberg.com/apps/news?pid=20601087&sid=azAOM8G3illk&refer=home

Feb. 13 (Bloomberg) -- Mel Brandt said he got a Citibank Home Depot MasterCard for its rewards program. His reward for paying on time was an interest rate increase to 19 percent from 12 percent.

“If I didn’t opt out and close the account, I’m afraid the interest payments would snowball and I would default,” said Brandt, 52, a self-employed house painter in St. Louis, who relies on credit cards to fund his painting business.

Lenders came under fire yesterday in a U.S. Senate Banking Committee hearing for raising interest rates, adding fees and cutting credit lines, even for consumers perceived to be low- risk with high credit scores. Connecticut Democrat Christopher Dodd, the chairman, called the practices “gouging.”

The federal funds rate, or the interest rate banks charge each other for overnight loans, is as low as zero and U.S. lawmakers have agreed to a $789 billion economic stimulus plan funded by taxpayers.

Rates for consumers should be falling faster than they are, said Ben Woolsey, director of marketing and consumer research at CreditCards.com, an online resource for credit-card users. Banks, facing an increase in defaults and a decline in consumer spending, are “still very reluctant to pass lower rates or increased credit access to consumers,” said Woolsey.

[radfringe]

1. Banks, facing an increase in defaults and a decline in consumer spending

Banks, facing an increase in defaults and a decline in consumer spending, are “still very reluctant to pass lower rates or increased credit access to consumers,” said Woolsey.


ummmm...could part of the reason for the increase in defaults be because they raised the FREAKING RATES TOOOOO FREAKING HIGH???

duhhhhhhhhhhhhhhhhhhhhhh

now that they have collected all the golden eggs, they are eating the goose

[Peace Patriot]

2. "...eating the goose." Yup. And it is worse than theft. It is treason. nt

[DCKit]

3. And driving even more people to economic destruction.

Anyone who was barely scraping up the minimum payment at 12% sure as hell isn't going to be able to make that payment at 23%.

How is it that BANKERS don't understand the math?

[RC]

4. If you were making 6 figures plus... Would you understand bankrupt as in broke?

[BR_Parkway]

6. NO, but in some ways, they're more insolvent than we are and the bankers

don't seem to understand that either.

[SoCalDem]

5. Credit Cards are using the Crack-Dealer Business Plan

Free dope at first..then cheap dope..and once they have you hooked..they OWN you:(