[Pinoikoi]

ok, so I have lived without a credit card at all for many years mainly due to the fact that I was trying to pay off debts that I incurred in college when every company on God's Green Earth is throwing a card at you.. we paid them all off and I didn't want any more.. but after we bought our house last year, i thought it might be a good idea to get ONE. Here was my reasoning..

1) I take classes to keep my job
2) those classes require immediate online payment to reserve my seat, and can't do that without a cc.
3) a couple of classes I took were actually short term classes out of state like conferences, and renting cars, etc requires a cc.

So I did my homework and shopped around. I got $5k for 10% fixed at a large well known national bank.. not great, but pretty good since I had drastically repaired my credit.. I could have gotten a better deal as a variable, but I didn't want my rate getting changed quickly on me, and I figured my cc would have a 0 or near 0 balance at all times anyway.

So last week they send me a letter- my rate is increasing! 13%! I was NO WHERE near my limit, I had paid on time every month, and although for a few current purchases was paid OFF last month.. I called them, they blamed the "economy"... what the heck does "fixed" mean to people??!!

So, I called around to some LOCAL banks, and got 8% fixed.. They wanted me to open a savings account with $5. I did one better, and used the coupon I got in the mail for a new branch in the neighborhood which offered $25 if I opened a new account at the new branch.. so basically I made the bank pay me $20 to open an account with them in order to start my cc which will allow me to transfer my small balance from the other cc so I can SERIOUSLY MESS OVER that bank that was not holding up their end of the bargain..

Can you tell I do NOT like the idea that some banks think they can do this to people? Just raise people's rates arbitrarily? I feel like I am "sticking it to them" and it feels good.

 

[Ruthiegirl]

I think (and this is my humble opinion) that we must get out of the habit of thinking of credit card companies as banks. They are not banks. They are for profit lenders of consumer credit. Nothing more. They exist so that you may buy something when you do not have the money for it.

Yes, they can jack up our interest rates, they can decrease our spending limits, they can charge exhorbitant fees, they can do whatever they want, because we agreed to it. We signed up for this. There is no such thing as a 'fixed' interest rate on a credit card. Somewhere on the credit card contract, in the murky depths of lawyer-speak, it states that the credit card company can do whatever it wants.

Credit card companies are hurting right now. They will do this more and more, because they act in their own self interest. They are not going to help us out, they are not going to be friendly, they are going to do whatever they can do slow the bleeding. They are hemorraging right now and will do whatever they can to survive this financial crisis.

Sure, some people use their credit wisely, earn points that earn them services, and pay off their balance in full. Those people have learned to 'stick it to the credit card companies'.

The rest of us, people like me who signed up for credit cards in college or used them when dh was out of work or used one when I wanted something that I couldn't pay for in full, people who carry a balance and pay interest, we are the ones who need to wise up and ditch the credit card companies. They are pariahs on our money and we will never be free of this consumer monkey on our backs while we continue to support a system that is predatory in nature.

Off my soapbox now.

 

[Ruthiegirl]

And to answer the question I can hear coming -- the 'fixed rate' credit card is a thing of the past. They are dinosaurs in today's market and most banks have eliminated them. And even if you do find a fixed rate credit cards it will come with all the same universal default clauses that a normal card has.

It is 'fixed' so long as you the consumer do not change your standing as a credit risk. And in today's market, we are all credit risks.

 

[Emmeline II]

Quote:

Originally Posted by Ruthiegirl I think (and this is my humble opinion) that we must get out of the habit of thinking of credit card companies as banks.

Banks (other than credit unions) are for profit as well. What makes credit card companies

is that they can change the terms of your agreement at will.

 

[PassionateWriter]

i agree with the pp...the ONLY way to use a cc is to use it for the points it makes YOU. if you carry ANY balance, its a bad financial decision, regardless of the rate.
im not talking about survival here..im talking about shopping and unnecessary expenses..if that stuff is going on a cc, then one needs to pay it off IN FULL at the end of the month. Otherwise, you are flushing $$$ down the drain.

 

[avendesora]

I have a debit card that functions like a credit card. No pin required, but still comes straight out of checking.

aven

 

[Seasons]

Quote:

Originally Posted by Ruthiegirl I think (and this is my humble opinion) that we must get out of the habit of thinking of credit card companies as banks. They are not banks. They are for profit lenders of consumer credit. Nothing more. They exist so that you may buy something when you do not have the money for it. Yes, they can jack up our interest rates, they can decrease our spending limits, they can charge exhorbitant fees, they can do whatever they want, because we agreed to it. We signed up for this. There is no such thing as a 'fixed' interest rate on a credit card. Somewhere on the credit card contract, in the murky depths of lawyer-speak, it states that the credit card company can do whatever it wants.

YES TO THIS! I am very confused when I see posts here that grumble because a credit card company is a commercial enterprise and not her "friend."

 

[claddaghmom]

I don't understand why it's a problem since you are paying it off immediately?

I do this w/ our discover. Anything that is a big charge, school-related or a monthly expense goes through the discover, then I pay it back. I get cashback on it.

If you are paying it in full then APR means nothing.

 

[Denvergirlie]

Quote:

Originally Posted by claddaghmom If you are paying it in full then APR means nothing.

Yeah this. Discover raised my interest rate to something like 19% a few months back, but it really makes zero bit of difference to me as I don't carry a balance. On the rare occasions I use it, I pay it off within a few days.
What the interest rate is makes not a bit of difference to me. Heck it could be 30% or 40% interest and it still wouldn't make a bit of difference as I pay it off right away.

 

[Carson]

Quote:

Originally Posted by Pinoikoi Can you tell I do NOT like the idea that some banks think they can do this to people? Just raise people's rates arbitrarily? I feel like I am "sticking it to them" and it feels good.

It's in your terms of service when you read what you signed up for. And yes, when people are defaulting all over the place on agreements they made, 'the economy' isn't a weak excuse.

If you really want to stick it to the company, use the credit on the card for convenience or earning rewards. Don't pay them a dollar of fees or interest.

Make sure that the deposit account you signed up for doesn't have any requirements you can't meet - direct deposit, minimum balance, etc... and also make sure the rate for balance transfer is free.

 

[iowaorganic]

Quote:

Originally Posted by Carson If you really want to stick it to the company, use the credit on the card for convenience or earning rewards. Don't pay them a dollar of fees or interest.

This is what we do. We charge all of our bills and make one easy payment every month for the entire balance. Then when we had saved $3500 in GM points we went shopping for a new pickup and used all that credit on the pickup. Never had to pay a cent in late fees or interest. I am even so lazy as to just schedule the payment to come out of our checking account.

I have no idea what our interest rate even is- it doesn't apply to me.

If you have to use it for work- why aren't they footing the bill? Also- you can just pay all of those expenses off immediately- your op states that you just got a credit card for the convienence of paying online....

 

[2xy]

Quote:

Originally Posted by avendesora I have a debit card that functions like a credit card. No pin required, but still comes straight out of checking.

Me, too.

If you only need the card to make online purchases, then that's the way to go.

That being said, I still have a regular credit card for emergencies. I'm not purposefully trying to live beyond my means, but I always think "what if something happens to my mom" or something along that nature. She lives across an ocean. I don't have the money to go help her.

 

[phatchristy]

Quote:

Originally Posted by iowaorganic This is what we do. We charge all of our bills and make one easy payment every month for the entire balance. Then when we had saved $3500 in GM points we went shopping for a new pickup and used all that credit on the pickup. Never had to pay a cent in late fees or interest. I am even so lazy as to just schedule the payment to come out of our checking account.

Yes, absolutely! If you're going to have a credit card you must make the FULL payment each month. It makes no financial sense to have a credit card to maintain a balance.

We only use ours for the benefits too! Pay it off each month. I get a 2% back reward with my card, so we use it for food/gas. Buying with a credit card also offers certain protections, and is a definite must online. BUT, I wouldn't get one if I couldn't afford to pay it in full each month.

 

[WC_hapamama]

Quote:

Originally Posted by avendesora I have a debit card that functions like a credit card. No pin required, but still comes straight out of checking. aven

There are some things that you can't do with a debit card, like rent a car.

 

[jorismom]

Quote:

Originally Posted by phatchristy Yes, absolutely! If you're going to have a credit card you must make the FULL payment each month. It makes no financial sense to have a credit card to maintain a balance.

Wow, thanks for making me feel like a loser. I'm buried in credit card debt here. I probably won't get out from under it for years.

 

[newbymom05]

Quote:

Originally Posted by Seasons YES TO THIS! I am very confused when I see posts here that grumble because a credit card company is a commercial enterprise and not her "friend."

Also agree. CC don't exist b/c the banks want to provide a convenience, they exist b/c the banks want to profit from people who spend more than they earn. I don't see the point of sticking it to them, any more than sticking it to any other business.

We have a 1.5% cash back cc that we pay off mo'ly. Love it and put everything on it, got back almost $400 last year. They can do whatever they want to my rates or limits b/c we charge planning to pay it off immediately, and IMHO I thought that was the whole point of using ccs--delaying payment for a month, not to spend more than your income.

I think the idea of credit as an emergency fund is recent and comes straight from the banks themselves.

 

[SmoothieMom]

I doens't matter what the interest rate is if you pay your balance off every month. It could be 200% and you wouldn't pay a penny in interest.

 

[Ruthiegirl]

Quote:

Originally Posted by Emmeline II Banks (other than credit unions) are for profit as well. What makes credit card companies is that they can change the terms of your agreement at will.

Yes, credit card companies can change the terms at will. When we enter into business with a credit card, we are not taking out a loan at a fixed rate with a scheduled repayment plan. There was no agreement to maintain a fixed interest rate. In fact, it states rather clearly (if you can get past the lawyer speak) that the credit card company can change the terms of the contract at will should we 'the consumers' change our credit standing.

And yes, it stinks.

 

[Pinoikoi]

Quote:

Originally Posted by claddaghmom I don't understand why it's a problem since you are paying it off immediately? I do this w/ our discover. Anything that is a big charge, school-related or a monthly expense goes through the discover, then I pay it back. I get cashback on it. If you are paying it in full then APR means nothing.

I am paying it off immediately in MOST cases.. I have a very SMALL balance at the moment. I have paid it off in full several times this year.

Quote:

Originally Posted by Seasons I am very confused when I see posts here that grumble because a credit card company is a commercial enterprise and not her "friend."

Friend or not, I expect to be treated fairly. I shopped around for my cc. I was told by MORE THAN ONE institution to go with a large bank since I would want them to "stand" with me if things go badly- ie late payments, large balance etc. I did ALL that was suggested to me and they still tried to shaft me (by abusing the "agreement"). I NEVER said they were my friend. I don't think it is bad business to expect a business to hold to their agreement or lose their customer. That is they way business should work in my opinion. If you don't take care of the customer, they will walk out on you and that is EXACTLY what I have done. I know they are not my "friend". The reason imho that cc are doing this to people is because they THINK they can. If you have a large balance, and can't pay it off it is going to be difficult to switch to someone else.. those of us that can quickly switch really should when companies start dealing dirty otherwise this behavior will just continue.

Power to the consumer is not about "friendship".

 

[leximom]

Quote:

Originally Posted by WC_hapamama There are some things that you can't do with a debit card, like rent a car.

you most definitely can. The two key things are that the debit card has a visa or mastercard logo and that you actually have the money in the bank that for whatever you are trying to pay/ be approved for. We have rented cars, moving trucks and stayed at hotels with no cc.