Whoa Home Depot
I can’t believe it! My Home Depot credit card interest rate jumped from around 11 last month to around 19 percent this month. What gives? I’ve sent them this message:The interest rate on this account changed from approximately 11% to approximately 19%. Please change it back.
Their response:
Thank you for your request.
Since the terms on all of our accounts have changed, this is your new APR and can’t be changed back.
Sincerely,
Home Depot Credit Services.
That’s bad.
Chase sent my business the dreaded credit line reduction letters this past week. Does anyone else find it bothersome that American taxpayers are lending these big banks money, only to have them hoard it, and refrain from lending it back to us? Why don’t we just keep the money ourselves?
I find it especially bothersome that these letters (including the one from American Express) are coming after $350 billion of the TARP funds have been released. And what adds insult to injury is that the banks are “rationalizing” their decision based upon credit reports saying that the amount of outstanding debt to available credit ratio is too high. Strange, that ratio for my business has only gotten better (much better, I might add) over the past year. I hate to second guess the rationale there, but I’d venture to guess that the real reason is that the banks themselves are still in terrible financial shape due to their own mismanagement.
Shouldn’t this type of action on the banks’ part have happened before they found themselves in dire straights? If so, does it mean that last year when they went begging to Congress they were only crying wolf, and are now seriously in rough shape? I hope not, I really hope not.
In the end, its these types of credit restrictions which cause more damage than good. It encourages people and banks to borrow more than they need, hoard cash, and not repay their debts when they can with excess capital. It further exacerbates the lack of cash flow and available credit. Dare I say there will be a prolonged financial ice age before there is any hope of a financial rebirth?
Is this nonsense happening to anyone else? Please share your stories, thanks!
As you may have heard, federal regulators have passed several new regulations concerning how credit cards are marketed and managed by credit card companies. To me, some of the changes seems pretty unimportant or not very different to existing practices, but one of them stuck out when I heard about this on the radio.
The one change that stuck out to me was how credit cards apply excess funds from payments to outstanding debt. Many credit card customers are surprised when they learn that payments made to their accounts are applied only to the lower balance debt first, regardless of when the various rate debts were acquired. There is no “first in, first out” rule when it comes to paying down credit card debt.
From what I understand, the new law will require credit card companies to apply payments to the highest interest rate first. While this is obviously a good thing for consumers, it seems a little heavy handed on the part of regulators. One alternative I heard about that seemed fair was to apply the payment proportionally to all outstanding debt.
No matter what the case, none of these changes will appear in our lives until mid 2010, which is still a ways away. The commentator on the radio I listened to said that Congress may step in before then to enact similar measures or to simply enforce these new rules sooner.
So after recently informing me that American Express is phasing out their line of credit, I learned today that American Express has also called my Simply Cash credit card in for “review”. This is very upsetting to me, and just another negative experience to add to the list of my relationship with American Express.
They also reduced the line of credit I have on a personal credit card with them, but that doesn’t bother me, as the balance I have on it carries a 3.9% APR for the life of the balance. I don’t plan on using it any time soon, since they would apply my payments to the lower APR first, while new charges rack up higher interest fees.
With the government pumping in well over one trillion dollars into the financial markets, and dropping rates to 0.25 percent, I’d figure that banks and credit card companies would be extending lines of credit, not closing and curtailing them. All this makes me wonder, is American Express in financial trouble? Maybe they weren’t able to tap into the TARP funds. I’m fairly certain they already owned a bank, and come to think of it, American Express recently applied and were approved to become a bank expressly for the purpose of gaining access to TARP funds. Go figure.
Its good to know I’m not the only one getting their credit lines cut:
Changing credit card terms squeeze consumers @ USA Today
Wow - this is news! Capital One is reportedly buying Chevy Chase Bank. Since I’ve moved to Bethesda, I see tons of Chevy Chase bank branches all the time these days.
But even before I moved here, I was familiar with the bank and the brand, and frankly I’m surprised that their board and shareholders are approving the sale. I have to imagine that the capital marketplace is really bad for this transaction to be beneficial to Chevy Chase Bank.
Capital One will likely get some great customers, lots of deposits, and access to a wealthy marketplace with this purchase. They’ve been buying up several retail banks over the past few years, and I expect that their acquisitions will continue, especially if they can get quality banks like Chevy Chase.
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