Bend Over, Suckers

I have just been on the phone with my Congresswoman’s office (Lynn Woolsey), and with my bank credit card representative. The news is not good. The taxpayers are being screwed once again, this in order to beat the deadline mandated by the new Credit Card Bill of Rights, which goes into effect soon. So get ready: the banks will all be socking it to their customers to the limit before their options are limited by the new bill.

It starts with a letter—like the one I received yesterday from Wells Fargo. It notifies me that my interest rate is being increased, both the standard rate and the cash advance rate. There is an increase both in the “margin” to 10.45 percentage points; and in the APR on purchases (based on the Index Rate plus the “Margin”) to a now hefty 16.20%. That is nearly a 4-point jump in my interest rate, which has already been bumped recently by a couple of percentage points. Worst of all, “these increases to the Purchase APR will apply to both new Purchases made on your account AS WELL AS ANY EXISTING PURCHASE BALANCES.” And if you don’t like it, you can drop your card--so long as you pay your entire balance.

Of course I was outraged to read this. I have never missed a payment on my credit card, a fact which was confirmed when I called my credit card representative, who said, “you have an excellent credit history.” And yet, my rate is being bumped. But why??? I asked the representative, who said it was a “management decision. All Wells Fargo credit card customers are having their rate bumped by upwards of 3%.” But why, I again asked, noting that the prime rate which banks pay for their money from the Fed was down around 3% the last time I looked. The banks have been in difficulty, she said (yes, I argued, because of the rapacity of their greed to cash in on subprime lending, which loans have gone bad and left the banks needing to ramp up their other cash cow, credit cards.) She said she had no information on that. She also said she had no information on the upcoming changes mandated by the Credit Card Bill of Rights either. But I had already learned about this, with a little help from my Congresswoman’s office, and here’s the news.

The bill was passed to great fanfare and signed by President Obama on May 22, 2009. Among other things, the bill says:

“No interest rate increases on pre-existing balances. If your credit card issuer decides to increase your interest rate, that new rate would only apply to new balances. Your current balance would continue to be subject to the old interest rate. There's an exception, however, if you become more than 60 days late on your credit card payments.”
(http://credit.about.com/od/consumercreditlaws/a/creditbillright.htm)

Aha, I thought. I’m protected; they can’t do this. But then I looked to the bottom of the website and found this disconcerting news: These rules won't take effect until February 22, 2010.

So now you get the picture. The banks, devils that they are, are fully aware that after February 2010, their ability to screw their credit card customers will be circumscribed. They won’t be able to arbitrarily raise rates, and apply them to purchases that were made, in full faith and knowledge by the customer, based on the old interest rate. Under the new rules, rate hikes can be applied only to new purchases; the old balance will be charged at the old rate. Poor old bankers—they won’t be able to just make an announcement that your rate is now higher, and have it apply retroactively. What an imposition! And so, in order to rake in billions and billions before the new rules go into effect, they’re hitting us all with higher rates now.

So this is our payoff, suckers, for allowing the Washington boys to bail out these same banks, to the tune of trillions of dollars, which bailout is going to sink this entire nation soon. Which is to say, sink all of us. Bail them out, let them continue raking in their usurious bonanza, and then bend over for your individual reward.

I let both my credit card rep and my congressional rep know my feelings about this. I would suggest that every single person who feels the same let their reps know as well. Because sooner or later, somehow or other, the criminality that is the banking system, along with the white-collar thugs who profit by it—and I include our sitting so-called representatives and president who all have their hands in the same cookie jar—are going to have to be brought to heel. The only question is, what’s it going to take?

Lawrence DiStasi