I have spent the past 24 hours trying to calm down after dealing with a bank over an issue with a line of credit and a different bank with a credit card. My wife and I have good credit. We have worked hard to build it, maintain it and grow it. We are not overextended and we are able to buy what we need. This is how we were told credit was supposed to work. You borrow, you pay back. If you pay back on time and pay off your loans, your credit score goes up and your interest goes down. This is the credit Utopia.
However, like the literary Utopia, it does not exist. At least, not anymore. One bank has decreed that for no other reason than the fact that they can they are raising our interest rate to almost double what it was. Bank number two is converting a “non-variable” rate line of credit to a variable rate tied to the prime. This is the exact opposite of what we agreed to when we took the line of credit. This would make one ask: why are they doing this.
Well, the answer is quite simple: because they can. They are doing it now because the democrats Credit Card Accountability Responsibility and Disclosure act will force the credit companies to adopt practices that will negatively impact their profit margin. So in order to mitigate their perceived losses, they are enacting policies that will gouge the consumer now, before the law that would prevent it goes into effect.
They will say that they have to do it to offset the lost revenue they used to collect from deadbeats who consistently paid late and were charged late fees. The new Credit CARD act limits the penalties they can charge. It also limits how much they can increase the interest charged on a credit card and puts more strict regulation on the circumstances of raising the interest rate. But it does not go into effect until next year. So they have to do something now.
All this is to protect the consumer from the big bad credit company. But the credit company is a business looking to make a profit—just like any other business. They only increase interest rates and assess penalties to those who do not pay. If you paid on time, and if you paid at least the minimum amount you had nothing to worry about. If you paid late, missed a payment or did not pay the minimum, it cost you—a lot.
A friend of mine had his credit limit cut in half, to a point below his actual balance. Whenever you exceed your credit limit, the interest rate automatically goes through the roof. Others are in situations like ours, having their rates almost double. Many people are finding credit increasingly hard to find and cannot get the cars or house or any other major purchase that they want. We are in the position of having our monthly payment go up and taking a longer time to pay off.
We are now having to shop for a better credit company; one that won’t change the rates or the terms of the loan midstream. It won’t be easy. There are not many good loans to be had now. The idea behind the Credit CARD act was a noble one, this much is true. Credit companies have taken advantage of many a customer over the years and ruined the lives of many an irresponsible shopper. I used to have my own issues with credit. I worked hard to fix them. Now, the reward for my hard work and effort is that I have to pay more every month for nothing. I work to get ahead, but slip farther into debt.
Thanks Obama! In your effort to help those who can’t help themselves, you have once again stuck it to those of us who play by the rules and take care of our responsibilities. When will liberals learn that you can’t fix society’s ills with legislation? Making more rules only serves to limit the freedoms that define our nation. With freedom unfortunately comes abuse. Anytime you give an inch, someone will try to take a mile. All those people who only got an inch will complain and cry about the injustice of those who took the mile. There will always be bad apples. You have to accept that, or stop giving inches all together. If no one gets an inch, then they never get anywhere and the country dies.
I am going to change financial institutions. There has to be a bank somewhere that isn’t looking to gouge their customers. Good luck with your credit situations, people.