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Find An Attorney For Unfair Card Rate Hikes

 
Summary

If you have been victimized by credit card rate hikes, the damage may be far reaching. The situation does require your prompt attention and can be handled by a credit card rate hike attorney. The hikes could very well increase your total indebtedness and bring on unforeseen penalties and unwarranted charges.

Banks and credit card issuers are lowering credit lines and hiking the interest rate you pay on your debt even if you pay your bills on time, according to a survey by Consumer Action, a consumer advocacy group.

Banks, citing the tightened credit market, have increasingly employed a policy known as “universal default,” whereby a lender can raise your rate if you are late on payments elsewhere or if it determines you have taken on too much debt. They do so even if you have a good to excellent payment history on the account with them.

The unexpected action by a bank frequently results in an unfair and unjust lowering of your credit score.  The result is that the lowered score makes it more difficult and much more costly to get or renew a mortgage or auto loan and other consumer loans.

In addition to raising your rates, under their policy of universal default a bank may lower your line of credit or credit limits.  That in itself raises your debt ratio to available credit which brings your credit score even lower.

Consumers then are frequently charged penalties for exceeding their credit limit either by over charging or at such time the interest payments come due on large outstanding balances.

In addition to monitoring your account, they are watching when you pay your other bills, your mortgage, your car loan, and all your household bills.  According to Consumer Action’s survey, you may incur the default rate if any bill payments are late, for having either too much credit available in unused credit cards for potential new debt, or for having too much debt on credit cards. Even being in dispute over unpaid or delayed insured medical bills, inquiring about a mortgage or a car loan will prompt banks to determine if you may pose a future repayment risk.

What is blatantly unfair about all of it is not only the domino effect that a default rate change can bring to consumers on other accounts, but also that the bank has not issued the higher rate on only new charges, the entire balance is subject to the increased rate.  A high priced item purchased several months ago on a credit card at a 7.99% all of a sudden jumps to around 26% or 30%, which gives the bank huge profits and leaves you paying an outrageous price.

Who Can Sue

If you have been a victim of any unfair practices by your credit card company and suffered undue financial loses due to substantial rate increases, unfair penalties or broken promises, you should speak to an experienced lawyer about recouping your losses and reestablishing your good credit. 

If you learn of a class action lawsuit involving your bank or credit card issuer, you may want to consult a lawyer on this website to evaluate your personal situation as to losses or damages compared to whatever potential settlement the class action might be seeking.  Individual action may be more suitable for you.

Even before you commit to legal action, you should immediately telephone the card issuer to protest being put in the default rate category. Ask them to reverse their action.  Consumer outrage over universal default has been so widespread across the nation that some banking institutions are making concessions for some customers.

There are a number of Do’s and Don’t’s you can follow when dealing with the credit card companies.

Do be firm with the credit card company in pushing for a return to your original rate and higher limits.

Do not make excuses or tell the company you lost your job or have other hardships.  The companies don’t care and any negative information you give them can and will be held against you.

Don’t hastily cancel other credit cards. Fewer credit cards mean a lower credit limit, which could hurt your debt to credit ratio and shorten your credit history. The longer your good credit history, the better.

Do not linger. If you do not get immediate results from your call, call an expert attorney on this website and tell him the nature of your complaint, and how much cost you incurred as a result of the bank’s surprise default decision.Determine if you lost a special rate offered on balance transfers, convenience checks or purchases. Did the action make you subject to an over limit fee?

Do try to make all upcoming payments by the due date. A payment that arrives after the due date, even if it is ahead of the late payment fee date, is still a late payment.

Do read all your mail from credit card companies. Credit card companies are required to tell you of changes in their practices concerning universal default and other measures, however, such notices are frequently discarded as junk mail.

Potential Recovery

Prompt attention to a universal default judgment leveled by your bank could result in a reversal of unfair charges and restoration of your credit score. The situation should not be ignored.

Consumer Reports states that American credit card debt has risen to the highest amount ever recorded. It is up more than 8% over last year.

John Carmichael, a member of Consumers Union, the parent organization for the popular magazine, managed to get his situation straightened out after Bank of America tripled the interest rate on his Visa Card, from around 8% to nearly 25%.

Carmichael said, "he always made his card payments on time." However, Bank of America determined he had too much debt even though his card balance was almost $1,000 below his limit.

The credit card business is a large part of banking operations, notes Consumer Reports. Carmichael contends that banks are changing their credit card terms to increase their profits in order to compensate for their mortgage-related losses.

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