This is not a news story yet...this is actually what just happened to me today. I got a letter in the mail from Chase about 1 of my credit cards. Here is the first line of what the letter says. "We are sending you this notice to let you know that we will be making some changes to your credit card account in response to market conditions and to maintain profitability on your account." This is what they want to do. Raise my interest rate from 24.24% to Prime + 24.99% (so theoretically, it could go up way up) the notice also says that i dont have to accept these new rates, but if i dont accept them, my account will be closed. I have until june 22 to respond. If i dont respond, they will just raise my rate. I'm thinking of all those people out there that do not read these notices that already have balances on their accounts. They are going to have to pay over 3% more per month now in interest. So if you have JPM stock expect profits to go up better than expected next quarter.
Pay off any balance. If you can't, then don't and just tell them and the rest of the sharks to all go fuck off! If you pay your balance at eom, they can't collect, at least not yet.
All the credit card companies are doing this before the Obama CC law goes into effect. I've received letters like that for several cards. I put my car on one Chase card that offered me a term of loan rate lower than I could get for a car loan a couple years ago and then put the card in a drawer. They've tried jacking with me to get me out of that rate but I'm not letting them. Some of the letters almost amount to extortion.
I let them know I wasn't taking their bullshit and just paid mine off ... felt like I got a particularly nasty ass monkey off of my back, too.
I actually never keep a balance myself. I got that as one of my first cards after i fixed my credit almost 10 years ago. I watched them slowly increase my credit line year after year and now that card has a credit line 10k higher than all my other cards. I guess its an emotional thing to keep a credit card...even if you dont use it which on that card i dont.
Close the account IF you have a balance and, transfer any balance to a better card with a lower rate. Look at BoA. Call around. They have good cards and are constantly trying to get me to transfer balances and get 0% rate for a few months or something. But I pay in full every month and have no balances. IF you close the account you will take a short term slight drop in credit score but you can open a new account and maybe get a higher credit limit. When you close an account you reduce your credit limit so that reduces credit score also. But when you get a new card you will get a hard inquiry also but in a few months you will be better off.
On the other hand, I have another Chase card that pays me up to 3% for every thing I buy with it. I use it to pay for everything I can. I don't even carry much cash anymore. It pays me a couple hundred a month to use this credit card instead of cash. I suppose that will be going away under this new law, too.
Barclays sent these type notices in March. 12.94% --> 19.94% variable based on prime effective May 09 cycle. Take it or leave it. Long story short: if you choose to opt-out thereby closing the card, read the instructions very carefully, and send your written rejection of the terms registered mail signature required. At the very least, certified with proof of delivery. Just as important, save the postal receipt in an accessible place.
You can thank Obama and his goons in congress for screwing around with business. Now, as usual, those that can pay, pay more. Stick that in your crack pipe and smoke it.