I took advantage of an introductory rate of 0% for six months to get a cash deposit from my credit card to buy a piece of real estate. The plan is to turn the property around within a year and make some money. The rate went to 9.9% at six months which was the contract that I agreed to.
It has been a year and the rate was increased to 25.49%. The first call that I made was very polite and I listened for a long time about what a great customer I was and they were forced to raise this rate because I had a high Debt to Income Ratio. My ratio is the same as it was, I made all my payments early and I paid down the balance.
I called again and listened again to what a great customer I was and how they would love to consolidate my loans at a low interest rate. I told them I had retained a lawyer and would like information. They refused and suggested that I tell my lawyer that they were not subject to usury law because their home office is in the state of Delaware. My lawyer said that I can take them to court based on contractual law and get them to bring the interest back. I found out that when this happens their lawyers may retaliate with frivolous lawsuits to tie me up in court for years.
I confess that I did not know what usury meant and decided to educate myself. The more I learned the more concerned I became. Webster's New World Dictionary defines usury simply as "The lending of money at an excessive or unlawfully high rate of interest."
This definition just touches the surface of the term. It was used extensively in the bible and was recognized throughout history until quite recently. The definition does not do justice to many thousands of years of thinking on this subject with personal suffering and damage done again and again to societies.
What MBNA is doing threatens our country more than anything going on today.
I have filed complaint with the Federal Trade Commission and the NYS Attorney General.
On a positive note, AAA Travel issued the card and were not aware of this practice. They were very proactive. I'm in the process of re-mortgaging my home to eliminate all credit cards that have home offices in Delaware or South Dakota.
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