My Observations Concerning Bankruptcy - 2nd Time Around For Me

[Cali]

I agree with you HHM on this.

DTI is normally the reason for rate increase. Companies always pull soft inquiries on your account to see how you are doing with other companies. If they see things are out of whack, like you have maxed many cards, they will up your interest rate.

[Frogge]

I agree with you HHM on this.

DTI is normally the reason for rate increase. Companies always pull soft inquiries on your account to see how you are doing with other companies. If they see things are out of whack, like you have maxed many cards, they will up your interest rate.

Yes, I understand that but how do they know how much money you're making? What if I make $50,000 more a year now than I did when I applied for their card and can afford the debt I carry. Does that make sense? They don't ask you for income statements.

[BigJohn]

I think the credit reports show more information then what is available to the consumer. For example, the debt to income ratio seems to be something creditors know about us, but how so? Our credit reports indicate how we stand financially, how do they know?

[Frogge]

I can't see how DTI is something existing creditors know. If our CC's knew over the last 3 years how insolvent and overextended we were on our debt, there's no way, if DTI is a factor on rates, that we would have been able to maintain 14 credit cards with rates of 0 to 9% and large balances.

We had a couple dormant ones close (and they report 'closed at the creditors request') but no rate increases ever except when I missed a payment to Citicard one time, and they reduced it back to what it was when I called and asked them to. I also was able to extend my 3.9% BofA transfer rate for an additional 6 months with a phone call. No one ever asked for updated income info. So I'm confused about this.

[justplaintired]

This is interesting to me. We had a huge rate increase on a cc we had the highest balance on. When it came right down to it, they blamed 1 late (by a day or two) for a jump in our interest rate. 14% to 31.24%. This card was 7 years old and we had paid it off once, never late other then that one time. Now I thought that was odd. Now I am beginning to think it was we were carrying high balances on other cards too. We had never been late, always paid on time and always atleast paid the min. Our credit report showed no lates, always paying on time. We would still be doing that if we hadn't had such a huge rate increase. Frankly we knew most likely the others would follow suit. Anyway, interesting thread.

I am in agreement with HHM, this is a way to get our finances in order. I take blame, but like another poster stated, I also blame cc. They jumped our rate trying to make more money on us. They didn't care about us they just cared about making as much money as they possibly could. Nothing more then loan sharks! Didn't there used to be a day when being a loan sharks were illegal? What happened?

[nazstar]

Not sure how they knew what my current income was. The rep told me that my debt to income ratio was too high. In addition, I was almost maxed out on all my cards.