Extremely Lame

I believe that there are few industries more evil and malicious towards their customers than credit card companies. And that’s even counting cable companies and cell phone companies. Again, I’m late to the game on this, but something caught my eye so I decided to look up a bit on this practice of universal default.

Basically, if anything negatively impacts your credit score, a credit card company can jack your interest rates to something approaching usury (30% and up) even if you’ve paid all of your bills to them on time. The drop in your score could be completely bogus and credit card companies are under no obligation to return your interest rate to the old rate. Hell, you could pay all of your bills on time everywhere and they can still jack your interest rate to infinity and beyond. Here are some examples.

1. You go Christmas shopping and open two or three new credit card accounts so you can save a few hundred bucks on the things you’re buying? The hard pulls on your credit score can drop your credit score, and as such, give these companies the right to slam you.
2. You pay off a large loan and no longer have any dealings with the lender as a result. You’ve just eliminated a long running relationship with that lender, so the “length of credit history” part of your report (which makes up 15% of the total score) doesn’t go back as far now. Therefore, your overall score takes a dip, and thus opens you up to rate increases.
3. Even NOT maintaining a balance on certain kinds of accounts you have open can cause your credit score to lower. Don’t even ask me how that makes sense.

Ugh. It’s simply disgusting. Man, I can’t wait to get my $600 economic stimulus check on Monday so I can use it to not stimulate any sort of economy and use it to start to paying down my credit cards instead. Luckily the credit union I have my Visa through doesn’t ascribe to this sort of universal default nonsense.

To learn more about legal usury, watch PBS Frontline’s “Secret History of the Credit Card.” You can even watch it online!