Cynical Synapse

Sun, 15 Feb 2009

Banks Jack Credit Card Rates

Filed under: Bailout, Business, Customer service, Economy, Life, Rants — cynicalsynapse @ 11:18 pm

Alrighty, then. The big banks (Citigroup, JP Morgan Chase, Bank of America) each got TARP money. And all financial institutions enjoy the benefit of the Federal Reserve discount rate of a mere 0.50%. The prime rate is 3% above the Federal funds rate of 0.25%, or 3.25%. Why, then, are they raising credit card rates? So, the banks can pay bonuses, buy new private jets (ok, so Citi backed out on taking delivery), buy each other up, and still not make loans to ordinary folk.

Since consumer credit is still dried up, no one is buying anything. As a result, thousands are laid off weekly, if not daily. And now, credit card rates are going up when most people cannot afford the extra cost. Within the last month, I got notices of two hikes. First, my Chase-managed Speedy Rewards card jumps from 13.24% to 19.24% (prime plus 15.99) beginning with the March billing. No, thank you. I stopped using the card when Speedway changed from cash rebates to Speedy Rewards points.

It’s not just big banks, though. One of my credit union cards, which is handled by Town North Bank Nevada, just sent me a notice the rate is going from 9.50% to the “index” rate plus 6.5 (17.99 for cash advances). The “index” rate is the highest prime rate in the preceding 3 months, but not less than 6%. So, the Town North card’s rate jumped to 12.5%, beginning with April’s billing period. No word, yet, from my other credit union.

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2 Comments

  1. thank for this
    gmcard.com

    Comment by hsbccreditcard — Mon, 16 Feb 2009 @ 12:25 am

  2. I just got that little surprise today. They also set the bill due date back one day (making my payment late of course), and made the new minimum payment go from $15 to $41. Thank God I have the means to pay off the balance and get the hell out of Dodge. Bunch of scum bags.

    Comment by rjjrdq — Mon, 16 Feb 2009 @ 1:06 am


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