Credit companies appear to be waging war on their customers, and that war is driving many to file bankruptcy.
Just a few short years ago banks were extending credit card accounts to anyone who applied, including dead people and dogs. Moreover, even after they issued a card they sent “checks” and increased credit limits to encourage going further into debt.
That now changed. Credit card companies and banks have lost billions and they are fighting back.
War has been declared and the tactics are brutal: “shock and awe” over limit fees, penalties, interest rates bordering on criminal (you can probably get a better rate from the local loan shark).
Credit card companies are turning to a new/old defensive tactic: “Slamming.”
What does it mean when your credit card gets “slammed?”
This is a term that I use when a client’s credit card limits are reduced, cutoff or closed even when their payment history is current – either paying the minimum monthly balance or more every month. This even happens when you pay the entire balance off and the company just closes the account.
The decision to lower credit limits is usually made arbitrarily by the individual credit card company or after they evaluate your income to debt ratio by reviewing your credit report. Just take a look at your credit report “inquiries” section. The bigger credit card companies are constantly trolling for this information.
For example, if a review of your credit report shows that you have multiple credit cards that are maxed out or close to their credit limits a credit card company may decide that their risk exposure is too high (based upon their own default risk standards) or in combination with high debt levels and just ONE missed monthly minimum payment.
Regardless, in this credit environment, those “like a good neighbor” and has been a “member since 1984” credit card companies are looking out for themselves – not you. All of these corporate slogans mean nothing.
We are already familiar with the friendly credit card company’s policies on “fees” and other charges – they are firm believers in the income generation device that I refer to as the “freedom of choice” business model.
They’re (credit card companies) free to choose what new fee, charges, interest rate and penalties that they can invent and add to your new bill.
Of course they are restrained by law from doing this without your previous knowledge and acceptance, but they are the master of the fine print disclosure.
We all received these “disclosures” from banks or credit card companies. They usually arrive in a small booklet sized form referred to “change in terms of service.”
What the label on the top of the envelop should really say is “inside we will tell in very ambiguous legal speak that we are now going to openly operate as an organized crime syndicate and will be charging you accordingly.”
If you don’t like the new terms, they will close your account and the collection terrorists will be in touch.
Once the collection calls start, you will encounter the sympathy and mutual understanding of a suicide bomber taking his last meal. Don’t believe me – ask my clients why they sought my assistance – they could not handle the stress of the calls and the lack of assistance in repaying their debts. Your membership “since 1984” means nothing.
Disclaimer
Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your financial situation in further detail, please call our offices at: (559) 228-1500 to schedule a consultation.
