What to do while you wait for credit-card reform to kick in

It’s good news that credit-card reform legislation is on track to be signed into law soon, but many of those consumer-friendly changes won’t become effective until nine months after the new law is enacted.  In the meantime, if you’re unhappy with interest rate hikes, high fees or other unappealing terms imposed by any of your current credit card issuers, you can take matters into your own hands and negotiate better terms, as we explain in the video. 

The higher your credit score, the more negotiating power you’ll have, so to arm yourself for battle, first find out your score.  At www.annualcreditreport.com you can get a free copy of your credit report from one of the three major credit reporting agencies and a copy of your credit score for a fee of less than $10. 

Then check out the average APRs offered for your credit score at www.cardtrak.com. Currently, the average credit card interest rate for people with top credit scores of 760 or higher is 7.45 percent, while the average is 12.01 percent for those in the 660 to 759 prime score range and 18.9 percent for those with sub-prime scores of 500 to 659.  

If the customer service supervisor at your card issuer won’t budge despite your best negotiating efforts, shop around for a card with better terms. BillShrink.com has been tracking which credit cards already comply with at least some of the new rules, such allowing adequate time to make monthly payments or eliminating universal default policies that allow card issuers to jack up your rate simply because your credit report showed you had a late payment with another creditor.  You can find out how various cards stack up in meeting the new credit cardholders’ bill of rights at by clicking here.—Andrea Rock

Comments

[Steaming Pile]

Thank God, after many years, we no longer carry a balance on our credit cards. It's hard as hell, but if you can do it, this is the best way to level the playing field with the CC companies, bar none. This is an industry whose sheer scale needs to shrink. In 1980, few people had revolving credit lines large enough to buy a new car; there is no need for this now, and if we never went there in the first place, we'd be far better off today.

[Gregory]

Please, somebody from consumers union, read this!!

Do not tell people to buy credit scores from any of the CRA's directly. They are useless 'FAKO' scores.

www.myfico.com
www.transunioncs.com

RetailMeNot has some coupons.

****

[J. Gustin]

I recently tried this with my Discover Card and I was told several times that there simply is nothing they can do about my 29.99% Interest Rate. I pay my bills on time each month, but I guess I made some very foolish decisions to use that card. I've learned my lesson. The card is already in the shredder and once it's paid off I will never do business with them again.

[m1k3g]

We have a FICO score of over 800 but that doesn't seem to make a damn bit of difference to Chase Bank. We always pay our bill in full every month, but somehow they charged us a late fee on last months bill. When my wife called to dispute the charge, the rep refused to remove it. Then they charged us another late fee on top of that. I called and said "either you remove these charges or we're canceling the card". We're currently waiting for our new credit cards to arrive from another company...

[SexCpotatoes]

I would be careful about trying to negotiate with your credit card issuer. They hold all the cards. There have been numerous stories on personal blogs about how someone thought they were going to be smart and renegotiate their rate, and it triggers a hard review of their account and the credit card company cancels their account on them or lowers their limit dramatically, sometimes below what their current balance is, triggering over limit fees and such.

[Chuck]

While it's difficult to determine exactly what the impact of the new Credit Card legislation will be at this early stage, there are at least two (2) significant negative impacts that haven't been addressed (either by the press or the "On-Line" community). If, and I stress if, the banks decide to "punish" their most credit worthy customers, those that pay their entire balances each month, then that will trigger a move to "cash" by these same customers, who incidentally probably have the greatest access to cash since presumeably they are not burdened with excessive debt. That will hurt the revenue of the banks dramatically, since merchants pay fees sometimes as high as 7% to the credit card issuer with each purchase. Also it should be noted these "good customers" are the same ones who don't hesitate to spend a few hundred dollars for dinner for two at the Four Seasons or drop $600.00 for a dress at Saks for their 13 year old daughter's birthday party. But potentially the biggest losers are local and state governments who are already buckling under huge budget deficits due to the sagging economy. Their biggest revenue stream are "Sales Taxes" . As anyone who lives in or near a large metropolitan area can tell you, the "underground economy" thrives, and generally "cheats" local government of sales tax reveuve. Push more people into the "Cash Economy" and this steady stream of lost revenue will be soon be an absolute flood.

[Jerry L. Tindle,Sr.]

My FICO score has always been over 800. This credit card rip-off is the most ridiculous SCAM??? I've ever heard of. I only own one credit card-Capitol One. Never been late with any payments, always pay double the amt. that's due long before due date.

Yesterday,5-21-2009, received a letter stating my APR% will increase to 17.9% by July 2,2009.My present rate is APR% 9.3%.The amt.owed is between $8ooo.oo to $9000.00.

I've been retired 4yrs.with good benefits.My intention is to pay Capital One the entire amt. off and never have any more dealings with this credit card company. I've never,in the past, had any problems with this company.This is so ludicrous!!!

Credit card holders beware! This could happen to you.

[Anne]

What about advice for consumers who have a judgement? I tried these tips multiple times with Discover card only to be harrassed by the credit card company, collection agency (Red Line Recovery) and the attorney. I made sincere efforts to set up a payment agreement once I fell past due (due to job loss, home loss, health care cost-(chronic illness/COBRA) and got nowhere with Discover Card. I contacted them again once I was back to work to try to set up payments and was only demanded the full amount and harrassed. Any tips?

[DP]

Hmm.. To be honest with you guys, ask me how to misuse the cards, I thought I can payoff all the amounts on time, but simply drgagged into high interest rates with out knowing me, but I am keep making the payments on time.. few companies that play with you add fines..

1. Chase (Washington Mutual), I was paying every month 24th as my due date, every time I pay at 20th of every month, this WAMU was taken by Chase and they changed the dates, I have never checked the reports as I am not buying anything and only doing auto amounts and some times, If I have cash I will pay, this chase changed the dates with out informing and saying we stated you on statements, B'ds and charged me every month with latepayments, when I called we told you and thats hit..

2. CITI : Same story, I am keep making the payments and some how the dates issue, and they reduced my balance from 15000 to 11000 and srinked my credit.

3. Capital one : Same dates issue, shrincked the balance and srincked the credit history.

4. DCU : The best.

Obama promised to help house owners, but the banks are playing with customers, the main idiots are Chase people, they dont know anything and they do what they want, and rules changing every day.. dont know if Obama rules are really applicable, they screwed my credit score big time instead of helping me, I am claling one last time today, and will not make any payments until my issue is resolved.. so becareful with this guys..

Issue: I submitted for one month half payment and they ask me not to make any payments until I get help, and I see delinquent in feb and asked them, they said why did u stopped the payments, and I paid immediately and they will take out late charges after assistance was finalized, and these days they are saying we cant help you as you are current, and you will be helped only you are delinquent, and few guys dont be delinquent and i need to be current.. first Obama should really show attention on these issues, at some point of time I feel I am dying with this frustration, I asked for one month help and they pushed me to some where in the world where I cant have a solution, as they screwed my score with this nonsense, and they are not helping and they are crunching people, suggets me guys ? do you want me to foreclose this mortgage or keep paying, I want to do my duties to help this economy but chase screwed the credit score with half knowledge, and the helper who assigned to my loan will never pickup the phone, God bless People like me.

[Sandy]

Well it seems credit card companies are jumping the gun and penalizing people with good credit for those with poor credit.

We have had an account with Capital One Bank for over 11 years. The agreement stated that we would have a fixed 9.9% interest rate for the duration of the account. Our balance on the card is under 5,000. The due date is the 15th of the month. Every month I have mailed a payment on the second for more than the minimum balance. Well ahead of the due date. Last month May, the interest rate was still 9.9%, imagine my shock when I open up Junes bill and the rate had climbed to 17.5%!! There was no notice sent to us stating that they were going to raise rates, giving us the opt-out oppurtunity. The change just appeared on the statemnet!

I am outraged and feel cheated. I plan to call them and argue the point, but most likely to no avail. We have never had a problem with them in the past, and this is ridiculous!

Be aware everyone--this could ( and probably will) happen to you!

[Jennelle]

I totally agree that we are being penalized for people who can't pay their bills.

I thought I was a valued card holder of Bank of America. I had the card since 03 and I have never been late on a single payment. My balance was under $5000.00. I paid it off in April and then without letting me know, they decided that I couldn't afford a limit that high and lowered it to $500 in May. I am so upset!! I feel like I'm some kind of low life who is unable to pay her bills. The other thing that makes my blood boil is that on my credit report it shows that my highest balance was $5000, when my credit limit is only $500.Are you kidding me??

I decided to call Bank of America to let them know just how much I appreciate them treating me like a low life and canceled the card at that time.

[christina]

It's funny how people with poor credit and who aren't able to afford to have more than a measly 500 limit are called lowlifes.
Not everyone with poor credit is a lowlife loser. There are circumstaces and they are all different, some people are getting laid off, others have accidents that cause them to be out of work. I myself got pregnant and because of me pregnancy complications I was on bed rest for 5 months and couldn't work.

I'm certainly not a lowlife, and I don't judge people like the majority of you.

Start thinking before you speak. Your interest rates are not only going up because of those that do not WANT to pay their bill, but all those major corporations that hold dealings with the banks, are also unable to pay the bank. So it's more than Mr. Smiths 300 credit card that is making your interest rate jump, it's also Mr. Jones corporate expence account