Credit card companies are putting the squeeze on loyal customers

At a time when banks are losing money due to toxic assets, they are dropping the hammer on the already pressured consumer. The credit card divisions of the major banks in the US are trying to make up for loan losses by increasing credit card interest rates. Banks are raising rates on customers regardless of payment history. Customers that pay on time have seen their credit card rates go up as much as 5% annually.

I find this behavior totally unjust. They should not be punishing customers who pay their bill to cover losses from customers who do not. This is a terrible business practice. So what can you do about it? 

1. Stop using the card immediately. You don’t want to have future charges at the higher interest rate.

2. Write a letter. State your displeasure with the higher rate and request a lower rate. I used to call but calling can be a hassle. I found myself transferred to different customer service reps each time who knew nothing about my case. I write a letter when I have a complaint so that there is written documentation on file. I have gotten better results by writing a letter.

3. Be prepared to leave. A lot of people threaten to leave their credit card company but do not follow through on it. If your credit card company refuses to lower your interest rate, it may be best to leave. They obviously do not value your business and you would do better to go elsewhere. Most credible companies hate to lose a loyal paying customer.

4. Transfer your outstanding balance. If you have a solid payment history and decent credit score you will find a better rate. Check out websites such as bankrate.com. They offer lists of credit card companies nationwide and their current interest rates.

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12 Responses to “Credit card companies are putting the squeeze on loyal customers”

  1. avatar Mike says:

    I recently closed an account because of the company’s dire financial practices. The company raised my interest rate and lowered my credit limit, even though I paid them as agreed.

  2. I don’t have any credit cards.

    Not many people can type that out. The only credit I have is on a house, even my car is paid off. The cards that I use are debit cards or cards that have to be paid at the end of the month.

    Back when I had cards I did step 2, and then left if I was not satisfied with the result. Even my American Express card, I called them just before the yearly fee was due and said that I didn’t want to pay for my Gold card and please renew it as a regular card. They gave a sales pitch for me to stay gold and I kept saying no. Since I was a customer and they wanted to keep me, and keep me at gold, they dropped the fee. (I doubt this would work with the Amex Black).

    Great post, I got here through tipd.com and stumbled this post.

  3. avatar Mark says:

    @Mike
    Companies are too short sighted. They are losing long term customers to make a few dollars.

  4. avatar Mark says:

    @Richard McLaughlin
    Wow. No credit cards. That is rare indeed. Hopefully we can all get to that point. Thanks.

  5. avatar Renee says:

    I wonder how many folk are really like Mike—willing to lcose the account. I just think both Mike and Richard have great points. I’m beginning to focus on paying off my debt and getting rid of credit cards. As Americans, we really have to focus on living within our means (cash/debit pay) more now than ever.

  6. Chase is trying to get me for finance charges on a 12 hour accidental late payment. So much for being a loyal customer.

  7. avatar Mark says:

    @Renee
    That is so true. If more people were willing to close their accounts then credit card companies would stop mistreating customers.

  8. avatar Mark says:

    @The Happy Rock
    That is just pure greed from Chase. Some credit card companies hold payments until the cut off time just to collect the late fee.

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  10. avatar Sunny Bruce says:

    Beware Chase credit card customers. Close your account like I did. They are charging some sort of fee every month to try to sucker us all out of money. I got charged a $39 fee on the same statement that payment in full was received (payment was received to early)

  11. avatar Mark says:

    @Sunny Bruce
    I have always been against penalizing customers for paying loans off early.

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