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March 9, 2009 –
A person with a credit card is being responsible, paying more than
the minimum balance on time every month. In fact, they have
had this setup for years and never missed a payment. Suddenly,
they get a notice from the bank. The rate on their credit card
is going to be increased by 3, 4, 5 times, even 10 times overnight
unless they see this little notice in the mail - which comes
separately from the monthly statement - and call and close their
account.
Previously this scenario only happened when something
changed about a person's credit history. But as confirmed by
phone today, banks like JP Morgan Chase have decided to put the gun
to the head of already struggling Americans completely without cause
- and this despite being handed $25 billion in taxpayer money to
keep credit flowing. In short, they are across the board,
without regard for your credit worthiness, drastically increasing
your credit card rate of forcing you to shut your account.
During my phone conversation with Chase today, the
point was made very clear. It has nothing to do with anything
the individual has done. So at a time when they are being
funded to do the opposite, they are shutting down credit even for
the best, most responsible consumers - further collapsing America's
economy.
Now while it may seem absurd that banks can simply
change someone's rate overnight from, say, 5.99% to 13.99% utterly
without cause, it is still permitted. Yes, Congress is aware
of this problem. They actually have addressed it and passed
legislation to make this practice illegal. However, unlike the rush with which handing
Chase and other banks billions was carried out, the new rules that
would prevent this abusive rate increase practice will not take
effect until the summer of 2010.
And so the banks, desperate for cash, are exploiting
the millions and millions of Americans who have some balance on
their credit cards. While Barack Obama borrows billions to
give Americans $10 per paycheck in stimulus and billions more to
help people who can't afford mortgage rates and even working with
banks to lower agreed to interest rates for those who borrowed for
homes, these same banks are, while President Obama is distracted
with the mortgage mess, exploiting a far larger number of American
consumers, even ones who have perfect credit and would be able to
make their payments. And with a far larger number of Americans
having credit card balances than having unpayable mortgages, the
damage the banks are doing on the credit card side can far eclipse
the worse case scenario of the mortgage meltdown.
That $10 per paycheck won't help much when monthly
finance charges on credit cards increase by $50-$100 per month, or
more. Just when America needs spending to hold steady or
increase, the banks are playing a game that will severely, instantly
collapse it further.
In his platform when he ran for office and on his
campaign website, Barack Obama spoke about this credit card rate
increase problem, and he vowed to do something about upon taking
office. But, at least for the moment, he is leaving
responsible Americans to be put into inescapable debt or bankruptcy
while he instead focuses on rewarding the risk-taking, irresponsible
mortgage takers.
It would take no time and no money to correct this
credit card situation. President Obama would simply have to move to
have the new rules take effect sooner. This is a massively
important step to keep at least some Americans afloat.
So watch your credit cards and for tiny little
envelopes you have been safely ignoring for years. Your rates
may be about to triple, quadruple, or worse, completely without
cause. And if you are with Chase or another bank that is
seeking to finish America off by exploiting anyone who has a balance
on their credit cards - or if you care about the economy and your
nation - give your Congressperson or Senator a call. This is a
situation they can fix, that won't cost anything to fix, but which
will seriously finish the nation off if not immediately addressed.
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