Can a credit card company change the rate on a loan?

Submitted by Dadummy on Mon, 12/31/2007 - 03:01

if a credit card advertises a low rate for the life of the loan can they change it at a later date?

i get letters all the time but they say in the fine print they have the right to change the policy without notice, does that mean they can charge a higher rate on the previous loan for life. does anyone know which card is actually better to carry i see too much fine print in all of them.

Yes, they can...

It's interesting you mentioned this. I just read an add for a credit card I just applied for and got that has 0% interest until July 2008 on any purchases and transfers.

The fine print indicated if I was late one day past the due date, then the rate would jump from 0% to whatever the current one is at that given moment.

Hope this helps.....


Mon, 12/31/2007 - 03:36 Permalink

Well Dadummy,

It is okay for them to change the rates. First and foremost this happens based on the market scenario. I hope you have seen the mortgage industry crash only a few days ago? So these are incidents which lead to major changes and it cannot be stopped.
The rate drops or increases as per market requirement..after all no company can run at a loss is it?

Mon, 12/31/2007 - 05:54 Permalink

They usually start out with a low percentage in the beginning and then jump to a higher rate later in the game, like 6 months later, after you have transferred all your balances to that account. It is common for credit card companies to pull this over on their new customers, especially since they offer the great incentive of 0% in the beginning, if you are going to transfer balances over during this time, you should try to pay off as much as possible during the 0% time frame.

Mon, 12/31/2007 - 11:58 Permalink

It has recently come to light that creditors were raising interest rates as much as 1% every 3 months to those even paying timely. There's no tricks to it, they do whatever they want with interest rates.

Mon, 12/31/2007 - 17:43 Permalink

I think I would be paying the card off and getting rid of it if it were me in this situation. We had an earlier thread about them raising there rates, MCasper is there a reference source that we can go read on this some where, can you post it please, I would be interested in taking a further look at this information. thanks

Tue, 01/01/2008 - 15:27 Permalink

I'm in the office now, I'll try to dig up that link when I get a chance throughout the day; if not I've got the link saved at home.

Wed, 01/02/2008 - 15:05 Permalink

"Citigroup, the nation's largest financial institution, announced last week that it was eliminating the practice of so-called universal default — raising interest rates for card customers because of their failure to pay other creditors on time."

"Credit card issuers raise customers' rates and fees, for example, when they believe it is warranted by conditions in the financial markets. But under Citigroup's new policy, rates and fees will be increased before a card expires only if the customer pays late, exceeds his credit limit or pays with a check that bounces. Or if the rate is linked to the prime interest rate, it would rise or fall in tandem."

Not the link I originally had, but still a reference none the less.

Wed, 01/02/2008 - 15:16 Permalink

Thanks for the information, I am going to look into it more now, thanks for following up with this thread, have a great day.

Thu, 01/03/2008 - 04:22 Permalink

Hello Mr. Casper,

It is a pleasure having you here on the forums. The link is pretty informative. Hope to see you around. :)

Thu, 01/03/2008 - 04:53 Permalink

Awesome read!!! Thanks for bringing that to out attention... I am glad the Senate had a hearing.... Now, I am waiting for them to actually do something...

Fri, 01/04/2008 - 05:45 Permalink

I don't have any cards but I feel for those who do and get stuck in this trap of them raising rates and doing what ever they please. It is about time the government is getting in here and trying to do something about it, they have their nose in everything else, why would they leave this alone?

Sun, 01/06/2008 - 13:33 Permalink

This is a great article and what powerful testimony coming first hand from someone who represents millions living through the same credit card abuse. This is just another corporate way of taken advantage of the little man, I hope that they do put something in place to take care of these monsters, they affect so many. I think they are right when they put them right up there with the predatory lenders, they are using the same tactics and practices, what happen to the day when you could hear the name of a company and think, trust, good customer service and other thoughts in favor of the customer. Anymore all you hear is the horror stories of how people are getting screwed.

Sun, 01/06/2008 - 17:39 Permalink

im getting rid of my credit cards one by one but it seems unfair they can lie to you like this my payments are never late. i had this problem with sears a long while back got rid of them and now im doing the same with credit cards. i plan on saveing some money so i wont need this in the future. my kids laugh at me when i say im broke they say im the only one they know who has money in the bank and say im broke but in reality i am ,the few bucks i have saved is for emergancys so i dont have to go back in debt.

Sat, 01/12/2008 - 17:27 Permalink

nothing wrong with having money stashed for a rainy day, dadummy....

Sat, 01/12/2008 - 17:35 Permalink

Be very careful with the fine print. Most of the ones I know of give one rate but then if you are late , the rate goes through the roof. I am lucky, I have above everything else for the past year, never had a late payment.

Mon, 01/14/2008 - 16:47 Permalink

This is true that the rates will increase if you show a pattern of late payments. After all you borrowed from them. It is always in your best regards if you pay on time.

Tue, 01/15/2008 - 11:52 Permalink

Yes, I had read that somewhere before. It should never have been that way to begin with. I think all companys should adopt that practice.

Tue, 01/15/2008 - 19:02 Permalink

I agree hummingbird, in the fine print is where all the stuff is that people usually ignores and gets them in trouble. It is so easy to overlook all this stuff though, that is why they call it fine print.

Mon, 08/25/2008 - 11:53 Permalink

Companies will claim they are reputable and not dishonest but why do they put stuff in fine print if they aren't trying to claim an unsuspecting soul?

Mon, 08/25/2008 - 11:54 Permalink

Well it is our responsibilty to read all the junk, fine print or not.

Tue, 08/26/2008 - 01:17 Permalink

Junk is exactly what it is. I still think fine print should be outlawed.

Tue, 08/26/2008 - 01:28 Permalink

It has been around for a looooooooooooonnnnnnnggggggg time, I have heard all the elders say about the fine print.

Tue, 08/26/2008 - 03:10 Permalink

Thats true. Good thing I have a good set of contacts in. I also think it wouldn't hurt them to explain and make consumers aware of all the fine print. When filling out an app. they should have a place for the applicant to sign saying the read all the fine gory print.

Tue, 08/26/2008 - 20:07 Permalink
Anonymous (not verified)

Once should go through the terms and conditions before going for a credit card. Once you start using these cards, it is assumed that you accept the terms and conditions and are willing to pay the interest and other charges. So one should always be careful while applying for a credit card.

Wed, 08/27/2008 - 12:54 Permalink

I know where you are coming from Dadummy. I use to hear this from my teen all the time. If you live like that money isn't there then it will be if you have an emergency. After a tough winter and coming close too many times to a zero balance in my checkbook, as soon as I got back to work I threw $400 into it but didn't add it in the total. Kind of like my own over draft protection.

Thu, 08/28/2008 - 12:19 Permalink

Sometimes it is as simple as adding a few extra dollars a pay. I find that easier than paying the bank fees on returned checks. Like a little investment of sorts.

Tue, 09/02/2008 - 01:14 Permalink

It would not be hard to do the $10 or $20 thing, my problem is that I access my bank account information about every morning online to keep an eye on things, I always know what my balance is.

Thu, 09/04/2008 - 00:39 Permalink

I only do it around statement time. I hate to look at the dismal picture so I figure once a month is enough.

Thu, 09/04/2008 - 00:40 Permalink

I am always afraid of someone taking money out of my account that I did not authorize, so I keep a very close eye.

Fri, 09/05/2008 - 02:01 Permalink

I just got worked up on this at another post you had. This really has to be illegal. Have you asked your bank how they can freely give money out to these people? I can see when they get a check back signed by you but this has to be an electronic debit, unauthorized on top of that. they could at least call and ask.
If you think about it if we would tap into a companies account and pull fiunds we would be serving a few years in the big house. Don't they have any legal ramifications?

Sat, 09/06/2008 - 02:23 Permalink

You would think that it would be illegal, sometimes they do it and you don't even owe it. I had a company pull money from my account for a cell phone that I never had, I have always used the tracfone, I get 50 minutes for $10.59 a month, I never use that much so I thought this plan would work for me.

Sat, 09/06/2008 - 02:51 Permalink

I know I wish I would have gone that route. My hubby and I never use all our minutes but I think that is because verizon to verizon is free includin the home phones.

Sat, 09/06/2008 - 02:54 Permalink

I used to have cell one and never used all the minutes and it was a pretty expensive plan. I got out of the contract, paid the penalty and went to the tracfone.

Sat, 09/06/2008 - 02:58 Permalink

I am stuck in mine for another two years and my husband refuses to go to the trac phone. Figures huh?

Sat, 09/06/2008 - 02:59 Permalink

It is a personal decision, I know my husband has a company phone through verizon, we don't even get service where we live so mine is pretty much only when I travel.

Sat, 09/06/2008 - 03:20 Permalink

We get full service here but I still have to have a house phone because of internet access.

Sun, 09/07/2008 - 01:27 Permalink
dk0526 (not verified)

I did some emergency home repairs roof, basement, driveway and bought a used car. I had a 9% home equity loan and used car loan (40,000$) and shifted it all to a citi bank 2.9% for the life of the loan...I have auto pay so I never miss a payment..I thought what the hell...its cheap money...but if the change the rates on me I would be very pissed off! Having this much CC debt is scarry but Im paying it off,,So far so good though!

Sat, 03/21/2009 - 14:49 Permalink