How To Fight Capital One, Citibank APR Hikes

This post has nothing to do with science fiction and fantasy. The topic is just too important to ignore, however. In case you haven’t heard, several major banks have just announced major rate hikes on their credit cards for all their customers. Some banks are raising interest rates to the unbelievable level of 29% or more.

Capital One, which has been aggressively trying to draw new customers through its innovative television commercials, just dropped the bombshell on its customer base last week. So not only are we taxpayers bailing out the banks, we’re going to pay them more interest on our credit cards despite how well we have managed our credit up until now.

But we don’t have to take this sitting down. As consumers we have options and rights and we need to exercise those options and rights. But we also have to be careful. Consumer advocates are warning people to be careful NOT to just cut up their credit cards. As soon as you close your credit card account your available credit drops and your debt-to-available-credit ratio tanks. That hurts your credit score.

So you earn good credit by not using your available credit. You lose good credit by giving up available credit.

If you have been making payments on time and your balance is relatively low, try switching to another card. You’ll get an introductory credit rate that is much lower than the usurious interest Capital One, Citigroup, and J.P. Morgan are going to charge people from now on.

You should also contact your U.S. Representatives and Senators and let them know you don’t want any bank that raises interest rates on its credit cards to receive Federal bailout funds. If the banks have the gall to gouge consumers like this they don’t need taxpayer help.

We have a couple of months before the new interest rates kick in. We can apply pressure to the banks to play fair. If they don’t want to treat their customers well then we don’t have to treat them well. We can demand that the government put restrictions on bailout money and we can move our credit to other banks. Why not switch to Citibank if you’re with Capital One, or switch to Capital One if you’re with Citibank? If they give you a low introductory rate to move your balance, you win, they lose.

That’s fair in my book. The banking industry clearly and obviously doesn’t need taxpayer help if it can so easily cheat existing customers. Raising interest rates, adjusting minimum payments, altering due dates — all these tricks will force even more consumers to fall behind on their bills. Those consumers will have to declare bankruptcy. Just exactly how is that supposed to help the banks become profitable again?

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