The other day I received one of those change in term notices. It happened just a couple of months after my credit card account that I had with FirstUSA was purchased by BankOne.
It seems they decided to look at my credit and use that to make an offer I couldn't refuse. They would give me $50 if I paid off the balance in full... Otherwise they would increase the interest rate to 24.99%.
Having some industry experience, I thought this was interesting. My original Retail Installment Credit Agreement required that I activate any rate changes with a written acknowledgement or by using my credit card. So I called their service center. Was I surprised to realize that they had the right to make these changes UNLESS I called them to opt out of the offer.
The account was closed to new purchases 18 months earlier, I had been paying off the balance as I could and honestly feel this practice to be tantamount to fraud.
With the fed discount rate dropping to 1% this week, and bank earnings reaching all time highs, I can only wonder how much further our society will allow these loan sharks to keep operating.
Does anyone wonder why delinquency is up, when the normal response by these "lenders" is to increase their interest rates upon any payment problem.
The FirstUSA introductory rate was 0% going to 9% over prime on a variable basis. This new offer I received is a far cry from that. Don't think paying them on time matters either, they will give you these rates if you fail to pay their partners in crime on time now.
Interesting isn't it.
SOOOOO do yourself a favor, carefully read all of these term change announcements and call the companies service center. They will help you with your questions, but remember... You have to ask. The bank does not have it's customers best interests in mind in these actions.
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