GE Money Bank raising intrest rates

[wownut54]

I just got a notice with my monthly statement from GE Money Bank (Paypal Buyer Credit). They plan to raise my rate from 20.80% to 26.99%! Thankfully I have been reading information from this site and others and called them, rejecting the change. They closed my account of course and their notice states I can pay off my balance under my "existing terms". I do not know if they will change my minimum monthly payments to make me pay it off earlier or not. I am not worried about it though because this account will become my target account in October so I will be putting more money on this account soon. Also, I have other accounts which I will pay off but keep open in order to raise my credit score.

Does anyone else have experience rejecting an interest rate change? Did they change your minimum payments or other terms?

I want to sincerely thank the people who made this site available and maintain it. It is wonderful!

[wownut54]

Today they sent me an email raising my credit limit! Go figure!

[KZK]

You know I really think many banks are reacting (preacting?) to the new legislation that is going into effect restricting the changes they can make to c/c accounts. I say this b/c every one of my 3 cards has in recent months pulled this same stunt. The last one was Citibank who was going to raise my rate from 12% to 30% unless I informed them I did not want this & my acct will be closed etc etc.

The funny thing is, I think that they are just out to gouge us for as much $$ as they can. I always pay more that the minimum & on time; I have balances but in the past few months paid off $11K & NOW they want to raise my rates? It don't make sense!!
as soon as they are paid off (no new charges for months) it's debit card only for everything forever!!

[ThriftyMan]

Guys, thanks for the good comments regarding the service. I'm really happy that we help. First, I'm glad you didn't take the increase in rates. You're right--if you are going to pay it off soon, who cares? And once you pay it off and don't need credit, you'll actually be MORE credit worth and get more offers for credit. That's the paradox--banks only want to give credit to people who don't need it.

And KZK, this ties right into your point. As a former credit card marketer (did you guys know that 2 of us are former credit card marketers and one of our investors ran sub-prime cards for a different lender?) I can tell you that it's really natural for card companies to make moves now. For years, they have given lots of credit and then hang out and watch what happens. For people who manage it--it's great bc they make tons of money. But when it looks like someone might have trouble, they jack up the rates because the changes of a charge-off just went up. So the upcoming regulation crimps their ability to respond to these risk signals and card issuers are getting the jump on the move while there's still time to react.

It's legal and even understandable, but it is hitting a lot of people while they're down.

In general, you can refuse the rate increase and just accept that they will close your line of credit and put it on an installment plan. Frankly, it's not a bad way to go bc you'll have to pay it off.