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Did the credit card company push you into it?

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  • Did the credit card company push you into it?

    Just curious, wondering how many of us may have been pushed into this by the cc companies raising minimums/lowering credit limits and/or raising interest rates. Was this the thing that opened your eyes and made you realize that BK was the only option?

    Also, was it a blessing in disguise for you? How many of us do you think would have continued in that vicious circle for who knows how long?

    For me, Amex and Chase really opened my eyes when after ten years of never paying late they dropped my credit limits to what I owed (or less, can't figure that one out), raised my interest rates and my minimums just because they could.
    Filed 6/10/2009
    341 7/30/2009
    Discharged 10/5/2009!!

  • #2
    I was on the edge for many months but everything was still getting paid. I had one card raise my rates from 9 to 29% and the rest followed suit. My limits were lowered, accounts were closed then I received a notice from chase after being late on my payment by only 4 days that they were raising my interest to 30% and my minimum payment went from $299 to over $800 per month. That was the last straw. I filed less than 30 days later.
    Filed Chapter 7 7/24/2009
    UST Has Questions :unsure: 08/11/2009
    341 Completed !!! 9/1/2009 :clapping:
    DISCHARGED 11/10/2009 :yahoo::yahoo::yahoo:

    Comment


    • #3
      Amex originally gave me a 35k limit which shocked me when I got it in the mail during the boom years. Another one gave a 25k limit and one increased the limit to 15k. One of my wife's card was just increased by 5k around Apr/May of 2008.

      Then Dec/Jan of this past year when limits were on the chopping block, Amex cut the 35k down to 17k ($250 above current balance) without warning. Found the change by going online to the account. I only received the letters in the mail a couple of weeks later. Good thing I didn't charge anything more as I would have been slapped with over the limit fees thinking I still had 18k left. The bank that raised my wife's card by 5k 6 months earlier now took it back and then some!!!!!!

      Then of course all the other banks started cutting the limits and before you know it, your CC debt ratio goes from under 45% to 98% within a few months. This in turn fuels higher interest rates, etc, etc, etc.

      For me, this was a wake up call in realizing we cannot go on like this anymore.

      You do have to wonder how many were forced into filing because those on the edge could no longer handle paying higher payments on the same amount of debt due to the higher interest rates.
      Filed Chapter 7: 06/29/2009 , 341 Meeting: 08/12 , Discharged: 10/16, Closed: 10/18

      Comment


      • #4
        Originally posted by NewLifeAhead View Post
        Amex originally gave me a 35k limit which shocked me when I got it in the mail during the boom years. Another one gave a 25k limit and one increased the limit to 15k. One of my wife's card was just increased by 5k around Apr/May of 2008.

        Then Dec/Jan of this past year when limits were on the chopping block, Amex cut the 35k down to 17k ($250 above current balance) without warning. Found the change by going online to the account. I only received the letters in the mail a couple of weeks later. Good thing I didn't charge anything more as I would have been slapped with over the limit fees thinking I still had 18k left. The bank that raised my wife's card by 5k 6 months earlier now took it back and then some!!!!!!

        Then of course all the other banks started cutting the limits and before you know it, your CC debt ratio goes from under 45% to 98% within a few months. This in turn fuels higher interest rates, etc, etc, etc.

        For me, this was a wake up call in realizing we cannot go on like this anymore.

        You do have to wonder how many were forced into filing because those on the edge could no longer handle paying higher payments on the same amount of debt due to the higher interest rates.
        Your story sounds much like mine. At one point in 2007 the wife and I had over 180K in credit, probably 65% open. Last Sept after never missing a payment or ever being late on anything,card after card lowered limits and raised interest rates. The last straw was when my Providian (now Chase) card which i have had for 13 years raised my rate to 33% and closed my account after having never missed a payment or been late ever. I was actually only at 60% on that card too. It really stung. The wife and i started doing the math and found out at the new rates across all of our debt were going to bury us for over 10 years.

        Comment


        • #5
          Universal Default was the final straw for me.

          Obviously things were not on that firm of footing prior to it, but I had one very small balance on a store card deferred interest promo. It completely slipped my mind (my mother had been diagnosed with cancer, I was moving back from several years abroad, dealing with their insurance and finances, etc.) and I was late. 1, yes 1 day past the due date.

          Once that late posted to my report my other cards all went to default APRs by the next statement cycle.

          I used to have very good credit, so I had very low APRs. The difference in the monthly payment from fixed prime to 29.99% or even 34% in the case of Bank of America is quite a bit.

          Then they dropped the credit limits to just over my balance. Add in the finance charges at 34% and they got their over limit fee.

          And then American Express took the charges on my "Sign and Travel / Deferred Payment Plan" and moved the entire balance to my Due In Full.

          The new mega payments combined with over limit fees and a sudden "Due In Full" bill on my Amex was too much. My house of cards had collapsed and no one was willing to work with me.

          I don't mean to suggest I wasn't responsible for what happened, but when you consider a $5 payment on a $120 remaining balance was able to kill all of these accounts -- it's shocking. Especially since it wasn't like I didn't have the money to pay that card off. For the first time in my credit life I forgot a payment.

          Eventually I probably would have lost anyways since I'm in sales and everything dried up shortly there after, but if that store card hadn't reported that $5 late the rest of my banks could have kept going for quite a bit longer.

          Comment


          • #6
            Originally posted by destitute View Post
            I was on the edge for many months but everything was still getting paid. I had one card raise my rates from 9 to 29% and the rest followed suit. My limits were lowered, accounts were closed then I received a notice from chase after being late on my payment by only 4 days that they were raising my interest to 30% and my minimum payment went from $299 to over $800 per month. That was the last straw. I filed less than 30 days later.

            Credit card companies pushed me into filing, but Nancy Reagan had the right idea. I could have said no (to more credit).


            My story is much the same, Chase and Cap 1 are particularly awful in terms of charging predatory interest rates and then hunting people (me) down for payment. It's illegal for ordinary citizens to charge each other these rates- isn't that loan sharking or something? I just don't understand how this is more profitable for the cc companies in the long run. Do they really make that much more money using these methods? I'm thinking a little longer term. In 5-10 years, will these same cc companies continue to be thriving on our late penalty fees, lawsuits and garnishments? Maybe I just answered my own question.

            Always had an credit score over 700, but debt to income ratio sucked.


            Hopefully, we'll all come to our senses and tell the cc companies and fico scores to take a hike. No more cc for me. I have been enlightened.

            Comment


            • #7
              Ours was cc debt. We had great credit, lower rates, high limits. Then HSBC upped our rate (no lates for the life of the card, over 7 years) to over 30%. We begged to have it lowered, and when we asked why they raised it, their response was, you were late on another card, (by one day), so many months ago! I cried, pleaded, you name it, it didn't matter.

              That was the day we knew, it was hopeless. I knew soon all would follow suit. Now you have to understand, this was before anyone admitted our economy was in trouble, beginning of '08. So my therory is the economy was in trouble long before some politicans said it was.

              Am I glad that they upped our rate, YES! Why? Because it gave us the push we needed to admit we were in over our heads. They made credit way to easy for people to get. They gave out outlandish limits, higher limits then a years wages. That when you think about it scary. And I have read other posts saying we didn't have to accept those higher limits, but what if you never asked them for a higher limit and it just appeared on your statements? We personally not one time asked for any credit increases, they were just there. Don't misunderstand though, it was our mistake using that credit, but honestly, it felt ok at the time, we paid min. payments, but little by little with rising gas prices, bigger grocery bills, higher heating bills, electric bills...., it got harder and harder to make those payments.

              So now that we have filed and are waiting to be discharged, I feel like I am normal again, if that makes senses. I used to waste to much of my life worrying, not sleeping. Trying to figure out how we would ever be able to get out of this mess, and thanks to HSBC, we found it. I have vowed that I would never go down this road again, and I know myself pretty well, there won't be another cc in our house. My dh brought the first one in years ago, and I told him then it scared me, and now I have told him, he will never bring another one back in this house. To me, they are loan sharks, the difference is, they are protected by the federal government, and loan sharks aren't.
              Last edited by justplaintired; 08-21-2009, 03:59 PM.
              Filed Chapter 7 June 4 ~ 341 July 20 ~Last day of objections Sept 18~Discharged/Closed Sept 21

              Comment


              • #8
                Chase did the rate-jack thingy, closely followed by Citi, then of course the minimums went sky high...so you could say I was Chased into BK court
                7-2-2009 Filed
                8-28-09 341 Concluded, no assets
                10-28-09 DISCHARGED/CLOSED!!!!

                Comment


                • #9
                  nope. just wanted to go back home.
                  Filed: 6-7-2010 341: 7-15-2010 DISCHARGED: 9/17/2010

                  Comment


                  • #10
                    I think the one that really got me was when I remembered to make my payment on my Kohl's account at 3:45 and you have to make that payment by 3:00 or you will get hit with an over the limit fee. I did make that payment but when my next statement came in my credit limit went from 3,000 to 1800 just like that just because of a 45 minute late payment.... I swear this is true. I now see credit in a totally different light. NO WAY will they ever take my integrity from me. Yes, I did use the cards and I did pay on time but when they decided to raise rates on me just because they could I said no more. Never again will they make me feel like this. Thanks to all of you here too for making me feel like a human being again! Not that I'm glad that all of you are in the same situation but that you all UNDERSTAND and do not pass judgment on me. That means so much to my mental well being!
                    08-2009:Quit Paying Credit Cards
                    04-2010:Hired 2nd Attorney;05-2010:Filed 7
                    06-2010:341 Meeting (went very well)
                    08-24-2010: Discharged; 09-02-2010 Closed!!

                    Comment


                    • #11
                      Absolutely. One card after another punishing me just for having debts, with no late payments, no overlimits, nothing. It was a chain reaction and made the timeline to BK much, much shorter.
                      Filed Joint, No Asset, > $100,000 Unsecured Ch.7 6/7/13 ~~ 341 Meeting 7/15/13 ~~ Discharged 9/16/13 !!

                      Comment


                      • #12
                        Yes, they got greedy and people are now fighting back...

                        I admit I bought into the whole work for the best credit rating you could get and hold onto it like it was the holy grail...I see it for what it is, a bunch of crap.

                        Add to it another person who has never, until recently missed a payment, they jacked up my rates, lowered my limits to just above the amount owed and in once case lower than what was owed, I fought them on that one and actually won.

                        Citi bank goes and takes bail out funding, while sitting in front of congress and swearing they will not jack up rates, what do they do? They turn around, pocket the money and jack up rates to over 30% and make it a variable to boot.

                        So they forced my hand, I was doing my best to pay off this debt, I sold just about everything I had and was even looking at selling my house, until I decided not to, screw it, I need a place to live. It was taking one entire check just to make the minimums and part of another, I was paying $800 a month in interest alone, NO MORE, you got your money in interest from me, NO MORE....
                        I would call and ask for help, they would laugh at me and tell me there was nothing they could do....well there is one thing left I can do, and that is file for BK.
                        I dont care about your credit anymore, I dont care about your rating of me and telling me how good a person I am by a freaking number.

                        I dont care anymore....

                        Comment


                        • #13
                          Death by a million slashes, I died that death too.
                          6/30/2009 Filed Ch. 7
                          10/06/2009 Discharged
                          01/24/2011 Closed

                          Comment


                          • #14
                            Originally posted by lookingforward View Post
                            Just curious, wondering how many of us may have been pushed into this by the cc companies raising minimums/lowering credit limits and/or raising interest rates. Was this the thing that opened your eyes and made you realize that BK was the only option?

                            Also, was it a blessing in disguise for you? How many of us do you think would have continued in that vicious circle for who knows how long?

                            For me, Amex and Chase really opened my eyes when after ten years of never paying late they dropped my credit limits to what I owed (or less, can't figure that one out), raised my interest rates and my minimums just because they could.
                            I ran across an article by The AP today.

                            "CC companies slashed limits for an estimated 58 million cardholders in the 12 months ended in April (sic), even though a high percentage had good credit scores when their limits were cut.

                            The widespread cuts affected about a third of consumers, but most people did not see a big impact on the credit scores, according to a study by FICO...

                            ...the limited effect may be because lenders often cut limits on cards that were unused or lightly used.

                            The statistics in some ways verify complaints from consumers that they were targeted despite doing nothing wrong, but also show that the cuts seem to have little negative effect on most people."

                            Thought you'd be interested in hearing that! lol Guess that means this is just a bad dream.

                            Comment


                            • #15
                              yup... same here... multiple accounts dropping available credit and raising rates, after never being late in 20 years... enuf's enuf

                              Comment

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