USAA just hollered - They're raising my credit card rates!
Yup, even my beloved USAA is fighting the good fight these days. Got a nice little letter in the mail yesterday (which may, or may not, have been cleverly disguised as junk mail) stating there will now be a minimum annual interest rate set @ 6.00% starting in Feb, 2009 :(It's certainly not the worst thing in the world, but that doesn't mean i have to like it. Currently I have two credit cards that are set at "prime", which as of 2 days ago just dropped again to 3.25%!!! It won't remain that low forever, but it still means this new minimum will now be DOUBLE.
The good thing here is that I don't have any balances right now on either card that would be affected by this. Here's a quick snapshot of both cards, and what their used for and all:
- Card #1 - the "House" card: $25,000 limit with a fluctuating balance. We put all household expenses on here (utilities, groceries, etc), and then pay it off in full each month.
- Card #2 - the "Auto Loan" card: $30,000 limit with a locked in 3.4% rate for 1 year. This is how i financed my old school cadillac ;) I knock off around $500 a month so the balance is slowly going away. Currently it has a $4,000 balance.
Oh, and i almost forgot!!! The funniest part about this whole thing was when i skipped halfway through the letter and saw, "You may reject these changes between Dec. 6, 2008 and Jan 23, 2009". I was like helllllll yeah, thank goodness i read that b*tch! I'll just opt out of it and be on my merry little way ;) haha...
Until i read the next header which read, "What it means if you reject the changes". Wanna take a guess as to what was in there? It wasn't fun, that's for sure: Your card would get closed down, you'd lose all your rewards/points/etc, and more importantly you wouldn't be able to re-apply for it again. Yikes! And yes, you'd still be accountable for all previous charges you already put on there ;) although it WOULD be at your normal rate, so at least you'd have that going for ya.
The moral of the story is to just read the stuff your bank sends you. It may look like junkness, but that one minor detail you miss might come back and bite you in the a$$ later. As for you USAA, you know i love ya! Can't get rid of me that easily...
Labels: credit cards, USAA
posted by J. Money at
11:05 AM
15 Comments:
So my rate jumped from 6 to 11.9 and they verified my FICO score of 793. The USAA rep said "well the economy is getting tighter" and wouldn't answer the question of why I didn't qualify for the lower rate. I'm a little irritated at USAA--I'm neither a roach nor a risk, just someone who wants to be able to tap credit on the cheap.
WTF are you serious? wow, that one really stuns me. USAA is usually pretty cool about this stuff...i wonder if you call back and speak to another person if that will change anything? every now and then i get a dud over there, and 95% of the time calling again works for me. I hope this isn't a trend...
Oh how sneaky. I'm going to have to read those more carefully!
Citi just did that to me. My rate is currently 6.99% and they said it would increase to 15.99% unless I opt out. The opt out agreement was the same as it was with you. I decided to keep my old rate and pay off the credit card by June 2009 (which is when they will close it). My balance is over $10k so the increase in the rate would kill me. I just can't understand why they would rather lose me as a customer (a rather profitable one) than keep me at the lower rate. It is just plain bad business. I can't stand the way some companies are run now!
Like Adam, Citi sent me a notice as well. Our local news did a story that many credit card companies were sending out such notices. Booo!!
The lady I spoke with was definitely a dud, that's for sure. Apparently rates start at 6%, but they will give me an 11.9. Am I overextended? I've got $1800 left on a car loan, no credit card debt and a 793 fico. My income is pretty high and they are trying to squeeze me while I planned to access a large credit line with their convienence checks as I prepared to purchase and renovate a home.
I'd expect this from Citi, but USAA?!, the world is going up in smoke.
I got the same notice from USAA. I usually don't ever worry about it, because I never plan on having credit card debt. Is this ignorant??
I had something similar happen, but instead of raising my rates they reduced my credit limit. Credit card companies are slashing any customers who aren't making them any money, so I would expect this trend to continue for some time.
In the vein of what happened to Matt SF, Chase didn't even bother to lower my credit card limit, the company just took the liberty of closing my account for inactivity! Luckily it wasn't a high-limit card and my debt is almost non-existent, otherwise I'd be pissed at the effect it would have on my credit utilization ratio (albeit temporarily).
@Kaitlyn - yes, most definitely!
@Adam - that's incredible, i can't even fathom that. i'd seriously call back and speak w/ a manager and say exactly that (if you haven't already) it's ridiculous. i can guarantee that SOME c/c company out there would love your business, esp if you have a balance like that. $hit, i'd start looking at 0% promo cards if you can get your hands on them! just be sure to pay it off before the promo time ends or you're REALLY f'd ;)
@Ms. MoneyChat - Boo is the nicest word for it! haha...
@Anonymous - yeah i'm telling you, something is WAYYYY off here - that makes no sense whatsoever. you have an EXCELLENT Fico and hardly any debt! i wonder what will happen once the new credit card rule stuff go into affect...either we're all saved, or we're all screwed ;) either way, here's to you getting your % back low again!
@jenthorpe - not ignorant at all, just means you have a plan (a VERY good one at that!) and it doesn't affect you :) if i didn't blog about it, i'd probably just write it off myself! haha...plus, even if you did put a charge or two on there - you have 30 days to pay it off w/ no charge anyways, so you're straight.
@Matt SF - Damn, now THAT is what i'm really afraid of.....i have at least $60k in credit open right now between a few cards (mainly 2) and i love it. i think you're right though unfortunately, esp w/ those new c/c rules coming out i linked to above in Anonymous' comment.
@RainyDaySaver - yeah, but it would still piss me off :) you're the 3rd person i've read about TODAY that it's happened to...i'm afraid it's just gonna get worse before it gets better - so HOLD ON to all your cards and make sure to put a cple charges on them here and there so they don't get closed out!
thx for all the comments guys! even though some made me wanna punch someone in the face ;) haha...but instead, i shall grab a bug light and eat some pizza...happy weekend everyone!
I got USAA's imminent terms just a couple weeks ago. Unless I reject them, USAA is raising both my Visa (currently at 7.9%) and my Amex (ditto) to 9.9%. No big deal for the Amex, because it has a low balance. But the Visa has a very high balance ($15K with a $18K limit) that I ran up to the limit a few years back when I was started a small business that I eventually shut down. Over the past couple years I've paid off $3K and in 2009 I was hoping to make real headway on it.
If I don't reject the new terms, my monthly finance charge will jump by about $30. Although I've had this card for a long, long time, I'm thinking of rejecting the new terms for it (but keeping the Amex card open). But I've also heard that closing an account, especially on an old card that has been consistently paid will really hurt my credit score (currently at 700). Any thoughts? Advice? Bite the bullet and pay the extra $30 p/mo.?
Ouch! I'm sorry to hear that Anon, it's def. not a pleasurable experience (both the biz shutting down and the raise). It *could* be worse though, some others out there are getting slammed w/ 5-10% right now :(
But yeah that really doesn't help your situation out, does it? haha...So, I'm not a credit score expert here, but I'd say rejecting the offer wouldn't be all that bad really. Although you can't add anything new on it or use it anymore, it won't be closed until you pay it off in full - and that can take what, 4-5 years? What if you open up another card now, so that by the time this other closes you'd have accumulated some more credit w/ the other? it won't be *as* good as keeping the previous card, but it would def. help!
To be honest though, I'd spend some time and see if you can find any of those 0% offers out there and xfer it all over. You'd save a BUTT load of interest AND pay it off faster! The hard part is finding them, but they DO exist though and a 700 credit score should be enough to grab one in my experience. Just be sure to pay off 100% before the promo ends OR xfer the balance over to another so you don't get slammed with even higher fees :)
So yeah, i'd say you're pretty much okay either route you go. If you just wanna resolve it asap, poney up the extra $30 a month and use the anger to pay it all off quicker ;)
I was hit first by Citi who taught me to beg by operating an amex type card that allowed me to go over limit about 2,000 so long as I paid it by the next date - they took that away from me, for no reason. Then I got the opt out notice from them for increasing my rates to some ridiculous amount. Then I got opt out notices from Capital One on all five of my accounts that are threatening to practically double my APR. As long term, 8 and 10 years, regularly paying customer, who pays membership fees on all these cards, with no defaults and an excellent payment history. I have been in the process of building a business for three years but this year instinctively I pulled back from running up expenses promoting it to pay of previous debts from operating costs. Anyone knows I takes 5 years to get a business off the ground. So I too had made significant progress paying my balances down recently. Not a few years ago they were taking my rates down and not charging me membership fees to hold on to my business. To say that I was a bad risk or they were not making money on me is total crap. To say that if I do not accept the new exorbitant rates and threaten my credit rating if I refuse is complete idiocy. If they really thought I was a bad risk or was unprofitable then they would let me go, FREELY. If they wreck my credit rating over closing my accounts down, frankly, I don't give a damn. This is not the way you treat people. I do not do business with people who attempt to insult my integrity and my intelligence. I have no addiction to their slave wage labor based consumerism. They can take their credit rating and credit card and shove it. I am not coming back.
What I would like to know is, if credit card companies can just increase people's rates for no reason and reward a long term business relationship of regular payments with higher rates and threatening opt out arrangements, what makes anyone think these are going to reward any future behavior if people do accept the higher rates and pay through the nose? Imagine paying more and then having your credit limit reduced by some absurd amount, charging huge fees if you don't pay it down or having them demand payment in full at any time after they have gouged you for a year or so at the higher rates? The way things have been going for the last three decades, with business getting away with more and more dishonesty every year, this is going to get worse and worse and worse. Under the circumstances, the credit card has been rendered obsolete; people are better off without them.
ooooh that is no fun - i'm sorry to hear that :( is there any way you can snatch up a 0% card anywhere or at least a brand new one w/ much better terms for you? I'll agree that we consumers are def. getting the shaft these days, esp when we're doing our part w/out fail! But i gotta say - if USAA is doing it to us (esp. myself w/ an excellent credit history and credit score), then we're all outta luck until things start getting better....but i wouldn't let that stop you from trying to finagle a better card out from someone ;)
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