Credit card giants defy plea to 'be fair

[Happyville]

http://www.sott.net/articles/show/182742-Credit-card-giants-defy-plea-to-be-fair-Interest-payments-soar-as-base-rate-hits-record-low

A Credit Card agreement is not like a sub-prime loan in the respect that you did not agree to a higher term rate at a specific set point in time. Credit Card companies do claim in their agreements that they may reset rates but I think they need your consent to do it!!!

I finally read the Terms of my credit card contract and as I suspected they CANNOT reset rates higher without your consent... Here is the little fine print that they very underhandedly try to trick you...

Amending This Agreement

We may amend this Agreement at any time. If we do we will let you know at least 30 days before the amendments come into effect.

If your Viva Card or your Viva Account number is used for a transaction or if any amount owing remains unpaid after the Agreement is amended, it will mean you accept the amendments we have made to the Agreement.

This is their way to trick you into consenting... However what they are doing under normal contract law is making you an offer ??? They can't make you agree to the amendments - They are asking if you are OK with them raising your interest rate... If you do nothing your answer is YES

Under my agreement with them (yours may be slightly different) I have 30 days to write them a registered letter to tell them that I do not agree to their amendments and will continue to HONOR the original agreement. ALSO There is usually a Federal Consumer Agency contact number listed on the Credit Card Agreement which is supposed to ensure the Credit Card companies are in compliance with the LAW and I would suggest that a CC copy of your letter by registered mail to that Agency as well...

Another Commenter on this article basically did exactly this... Although he was a little more colorful about it, he really just told the credit card company that he did not agree nor consent to the amendments of the contract... I would still recommend registered mail however, because you then have some hard proof...

I found myself in this same predicament two months ago when I got a bill from MasterCard. They increased my interest from 12.5% to 19.5% for no reason. I have never been late on a payment and have been with them to over ten years. I called them and gave them a choice. Put my interest back to 12.5% and they would continue to be paid each month or they could leave the interest at 19% and not get another cent from me. What do you think they did? They put my interest back to where it was. In light of the shenanigans the banking industry has pulled in recent months, I have no problem stiffing them should they try to screw me over. What do you think would happen if suddenly everyone gave their credit card companies the same ultimatum?

So my question is rather than rattling their sabers, why are US senators not telling the US public to decline these contract "offers"... Perhaps because your Senators are actually just beating their chests so you will feel like they are trying to help you when what they are doing is helping the Banks raise the interest rates... albeit to levels that your senators find acceptable...

 

[Redrock12]

I LUV this topic.
The same applies to consumer loans, at least here in Canada.
If you take out a car loan (for example) from a local dealer, there is inevitably a clause in the loan agreement stating that the loan is transferable, which means it can be sold to a collection agency.
However, what they don't tell you is that the borrower has to agree to the transfer by signing a new contract with the collection agency or making a payment to the agency. If the borrower doesn't agree to the loan transfer, ie to enter into an agreement with the new holder of the loan, then the borrower is under no obligation to pay them one red cent.
If a collection agency calls asking for money, the first words from your lips should be "I don't have a contract with you." Then tell them not to call or send you letters or you will charge them with harassment.
As well, if you get a phone call from an out-of-state or province or out-of country collection agency you should ask the caller if they are authorized in your jurisdiction to collect money, and if so you need to see the certificate of authorization before you talk to them. If they aren't, then chances are they don't have a leg to stand on. And if be perchance they are, then tell the caller that you have no contract with them, and to leave you alone or they'll be charged with harassment. Simple, huh.;D

 

[gwb1995]

Happyville,

I received a letter recently from one of my Credit Card companies, informing me that they were changing my 7.9% fixed rate to a new adjustable rate, and the new rate would start at 16.9%. I was offered to 'opt out' and not accept the rate, but the catch was that I would lose my ability to use the card anymore. In other words, opt out and you no longer have credit to use and pay off the balance at the old rate.

After a long serious of conversations, with several different members of the company, I was offered two choices. I could accept the Opt Out choice, or I could accept a reduction in my credit limit, accept the new rate of 12.9% fixed rate, and pay the difference in credit limit off to put me within the new maximum limit. This new max limit was a reduction of 65% of the original limit, so I would have to come up with about $1000 to meet these new terms.

I am still working to see if I can work out something with them, but at this time, I have not accepted any of there terms. Anyone with advise on what I can do would be greatly appreciate, as I can not afford to hire legal counsel.

I do know of other people who are having the same types of things happening to them and it appears that we are all going to be under attack from these companies in some form well into the near future.

Thanks for posting this,

gwb

 

[vinny]

I am still working to see if I can work out something with them, but at this time, I have not accepted any of there terms. Anyone with advise on what I can do would be greatly appreciate, as I can not afford to hire legal counsel.

well, this doesn't help your immediate situation of having a balance to pay off, but for anyone else:
- don't ever expect a financial instititution / credit company / bank to play fair.
- don't ever use a credit card as a loan facility.
- if you don't want to continue doing business with a credit company under the terms they offer then ditch the card immediately.
I only ever use a credit card forconvenience / online transactions etc, that are paid off in full every single month, so I am paying for things immediately out of my monthly salary, and there are no interest payments.

only rich people can afford to have a credit card (except in the way I just described above). Otherwise it is just another trap. As you are now finding out, sadly. Is there a way you can get a loan from your bank under better terms, to repay the balance?

 

[shellycheval]

Hi all,
A major bank just did the same thing to me. I chose the opt out option, called the number and agreed to no longer engage in any activity on the account in order to keep the rate at 6.9 on the balance of about $1700. To keep from using the card I stapled it right through the magnetic strip to the contract info and filed it. My next step is to remove all my other checking, savings, direct deposit accounts from this bank to a smaller local bank and sift through the cc offers from their competition and get another card which I intend to use only for emergency/travel needs. Happyville if you cannot afford to payoff the account, the least expensive way to deal with the change appears to me to be to do the same--accept the low fixed rate on the balance and never have any activity on the account again, not even to call and inquire about it once the new terms are accepted. Good luck.
shellycheval

 

[Happyville]

Hey there GWB... I feel for you - these corporations are complete THUGS and very openly using intimidation tactics to try to scare us into agreeing to terms we don't agree with...

Please understand I am not a lawyer (not even close) and honestly I would feel really bad if something bad were to happen to you from musings on this thread... I am trying to learn more about contract law as it seems to be the basis for much of our suffering in many ways... Not just for Credit card contracts, but nearly everything we do in society binds us to agreements/contracts, many of which we are not even aware of... As well, many of the websites/chat boards you visit every day (including this one) binds you to legal terms that you may or may not be aware of or even agree with...

The following is conceptual cloud thinking so please treat is a such... For certain anyone with more knowledge on contract law should jump in here and pull this apart!!!

I find it interesting that they seem to be offering you the "choice" to opt out... This sounds like they are asking your permission to cancel your card which leads me to believe that there is some maneuver room.

In a contract you have the right to counter offer.

One idea would be to make them a counter offer in writing and send registered mail.

State that it is not your preference to amend the agreement at this time and offer them the following choices.

A) Do not change the original articles of the agreement whatsoever, and continue under those terms as agreed.

B) Re-offer them their "opt out" choice by stating that should they choose to opt out of the agreement then the payment terms of the debt remaining shall be decided by an independent arbitrator and that all costs of arbitration will be paid for by the party who wishes to amend the agreement.

Include a time limit for a response to your counter offer stating that if you do not hear back within 5 business days then they will have agreed to leave the agreement unchanged and that you consider the matter closed.

Don't loose you copy of the counter offer and make sure that the letter is signed for and keep that as proof that they received your letter.

... I think this approach is good because

a. You restate that you are still in agreement with - and choose to continue to honor - the original agreement
b. You state that you are not the party who wishes to change the agreement.
c. By saying that the payment terms of debt owed should be decided by an arbitrator (this is your bluff) - it will cast some doubt in their mind as to your intentions - It will sound to them that you may be thinking of not repaying their debt altogether. However what you have written shows no dishonor to the contract; rather that you are demanding a fair judgement in order to full-fill your debt obligation because new terms they offered are unacceptable to you.
d. You have put terms on their terms... If they now choose to use the opt out clause (which they won't ) then you will have sort of tricked them into agreeing to the terms you put on their terms.
e. The bit about the arbitrator is to scare them off because the last thing a bully likes is when they have to face the truth in front of a third party. Even if the case did go to arbitration ( which I stress is NOT the intent or goal ) you would be in honor and the credit card company would look like the greedy thugs they are!!! They are psychopathic and it is their aim to resolve this DIRECTLY with you!!! Any "Human" Judge or Arbitrator with a conscience would side with you under these circumstances and therefor the credit card companies don't want to leave the shadows where their intimidation has value.

They will definitely send you back a letter and they may deny all of your counter offers altogether and re-state (re intimidate) their offers which will sound even more like "threats". To which you can re-offer your offers which they will consider threats to them and so on and so on...

or

They may just leave you alone and back off... I suspect they really don't want too much resistance nor do they want to explore the notion that you won't pay your debt back and they REALLY don't want to get into a situation where you end up on the NEWS which will REALLY REALLY not look good on them (considering the recent headlines) ... What they are doing is very sinister and they will no doubt want to move on to swindle easier targets...

or

They will invent some reason to cancel you card.

The way I see it is that if you are willing to loose the card then doing a little poking may be a good learning experience and could bear fruit. There is NOTHING wrong with sending them letters, and it is your right to haggle for the best terms on any new contract that you sign.

If you can't live with out the card, then you may have to rely on your Senators (yeah right) to help you on this...

 

[Happyville]

My next step is to remove all my other checking, savings, direct deposit accounts from this bank to a smaller local bank and sift through the cc offers from their competition and get another card which I intend to use only for emergency/travel needs.

Good Call... My CC agreement states that (i agree) they can raid my other accounts in order to pay off my CC's, but only within my banking institution... I doubt they can do this if I move all of my accounts to another bank, preferably a small local one...

 

[gwb1995]

Quote from NOMAD only rich people can afford to have a credit card (except in the way I just described above). Otherwise it is just another trap. As you are now finding out, sadly. Is there a way you can get a loan from your bank under better terms, to repay the balance?

Nomad, thanks for your thoughts here. I agree that only the rich can afford to have credit cards. I do have some options, such as getting a loan, to try and resolve the situation. My problem is that I have allowed myself to get caught in this trap at a very bad time. Due to the current economic times, my current company has made cuts and I am on the short side of things for now. I do appreciate your thoughts and suggestions.

Quote from Happyville Hey there GWB... I feel for you - these corporations are complete THUGS and very openly using intimidation tactics to try to scare us into agreeing to terms we don't agree with...

Please understand I am not a lawyer (not even close) and honestly I would feel really bad if something bad were to happen to you from musings on this thread... I am trying to learn more about contract law as it seems to be the basis for much of our suffering in many ways... Not just for Credit card contracts, but nearly everything we do in society binds us to agreements/contracts, many of which we are not even aware of... As well, many of the websites/chat boards you visit every day (including this one) binds you to legal terms that you may or may not be aware of or even agree with...

Thanks Happyville for the valuable info you have posted. I will do my best to make good use of it.

This is a valuable lesson for me and I will take this one to heart for sure.

gwb