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Web Letter

I appreciate what Congress has done to improve consumer's rights with credit card companies by passing HR 627. Section 3 was important to me: "Declares that, if two or more different APRs apply to different portions of an outstanding balance, the amount of any periodic payment beyond the required minimum payment shall be allocated first to the balance with the highest APR. Allocates any remaining portion to any other balance in descending order, based on the applicable APR each portion of such balance bears, from the highest rate to the lowest." I lobbied for it because Chase was doing it to me on two credit cards.

Section 3 made a big impact on me two ways, one good, one bad. I am now paying less interest on two Chase credit cards that have high balances and mixed APRs, which is good. However, I will never see a benefit from that. Chase just notified me that as of August 1, 2009, they are increasing the minimum payment due on two cards from 2.25 percent to 5 percent. That means my combined monthly payments jumped from about $800 to $1,600.

This increase, to double, is unacceptable. My Social Security check is only $1,100 a month. Luckily, my wife is still employed. Also, I was in the process of refinancing my first and second mortgage to pay off all my credit card debt. Now our debt-to-income ratio has changed considerably and I may not get loan approval. That will mean bankruptcy and/or foreclosure for us.

I spoke with Guy, at Chase in a "special solutions" department, on July 2. He said Chase will not reverse their decision to raise the minimum payment, and I have no avenue for appeal. Furthermore, they would not honor my request to delay the minimum payment increase ninety days so I could refinance. Guy indicated that Chase has not raised the minimum payment for all customers. They are being selective or discriminatory.

In fact, Chase is treating me both ways. I have three Chase credit cards. They raised the minimum payment on only two. Both of those cards are affected by Sec. 3, because I had used a promotion that offered 3.99 percent interest until the balance is paid. The third card is not affected by Sec 3, meaning the APR is not mixed, the minimum payment has not changed and is still only a 2.25 percent.

The new law was intended to help credit card consumers. Chase has found a loophole and has applied it selectively to certain customers. They are pressuring consumers in an attempt to get released from their obligation to charge "3.99 percent interest until the balance is paid." I need relief from this new Chase policy, and evidently many more consumers are in the same position.

Web Letter

The whole credit card industry is sleazy at best, if not downright crooked. Lenders beg and plead with you to take their card, and once you do, you become guilty until proven innocent, a target of scam artists.

Accepting a credit card should be viewed as a contract between a borrower and a lender. You enter into a contract and the rules are consistent throughout the duration of the contract.

Third parties such as so called credit-reporting bureaus should have no influence over an existing contract between a borrower and a lender.

When I buy a car, the payment and the interest rate are the same every month until the loan is paid off. That has always been good enough in the past. Your car payment doesn’t suddenly spike dramatically upward because a credit reporting agency is whispering bad things about you behind your back.

Your credit card interest rate should not spike up dramatically either because of what others have said. If the borrower continues to make a reasonable effort to meet payment obligations, there should be no legal leg for the lender to enact penalties or change the agreement of the loan.

And another thing, what make me the maddest about this whole thing is companies like Experian never have the whole story on you. They don’t know that I bought a brand new BMW in 1981, kept it for five years, paid off the loan in full, then traded it for a brand-new 1986 Toyota Surpra, kept that for five years, paid off the loan, and on and on. No, what they want to remember is I paid my electric bill (which is about $ 47) late one month. That they remember. Shame on me, my interest rate has to be higher. Nonsense! That’s just an excuse so they can charge higher interest.

They remember the negative, but they don’t seem to be able to keep track of all the positives. It’s just a scam. You should get points for taking out loans and paying them off, buying a house and paying it off. You don’t. It’s a scam.

Nationalize the banks and let Congress set the rules! Outlaw credit-reporting agencies.