I'm with her...but not by choice, by necessity. I have a BofA card with a very high balance and I have been making payments on it every month faithfully. Guess what? I'm being laid off in 8 days--there goes the money for my CC payments.

I have to prioritize and my mortgage, car payment and utilities come first.

Maybe this is a good thing. Hopefully I can settle it for a fraction of what I owe. It has been weighing on me for years and creeping up little by little.

If you charge $100, it should ALWAYS be at the interest rate at which it was first charged.

If the interest rate then changes, and you charge another $500, then that $500 gains interest at the rate applied before you charged it.

You just shouldn't be able to change rates after the fact.

"I'll loan you a dollar for free." A day later, oh, that'll be 30% interest. Wait, what?

Just repeat after me folks - "no hablo english". Works like a charm.

Homer: "Who is it?"
Voice: "Goons."
Homer: "Who?"
Voice: "Hired Goons."
Homer: "I don't remember hiring any goons..."

Wait... that sounded wrong...

I told them to stick it and refused to pay.

If your credit is bad, you can always put a freeze on your credit report. Sure, you'd need to unfreeze it for a house or a car, but no job or apartment needs to see that information for anything.

About 12 years ago, I walked away from a couple thousand dollars in credit card debt. Sure, I got a lot of collection calls, but they stopped after a while. So I just waited, and here in Ohio, after 7 years the statute of limitations ran out and I was free and clear. Funny thing was I didn't even know about the statute of limitations thing and they called me up a year or so after it had run out. I wouldn't have even thought of it if the douchebag on the phone hadn't mentioned it, so I looked it up and called them back the next day and told them to screw off.

I have great credit now, but during that time when it was bad, I didn't really have any problems. Worrying about your credit score is overrated unless you're buying a house. Just save up and you can afford anything else. After all, you'd pay for it anyway.

@RecordStoreToughGuy_IsNeckDeepInCrisis: The result certainly sucks for both sides if the borrower can't pay, buy keeping interest rates artifically low for all doesn't really help matters. A certain number percentage of people will default on their debts with a certain credit score and the lenders must pay for this. So those who are the biggest risk pay a higher interest rate. It certainly doesn't make sense for those who can MOST afford it to pay the higher interest rate!

The remedy if she doesn't want to or can't pay is to negotiate with the lender or declare bankruptcy. If she negotiates, the interest will likely be reduced way down, though her line of credit will be cancelled and she will certainly (and rightly) see her credit score suffer.

@msbask: They did. I WAS a higher risk, so it shouldn't be shocking that my rate was increased. I paid it, though it certainly took a bit longer. That is the cost of having a line of credit extended to you. If you choose to utilize it, then you've got to play by their rules. No one has ever been forced to use a credit card. And if one uses a credit card and can't pay, why shouldn't the interest rate be increased?

I like it when people make the hard choices, but I would implore you to fully consider the ramifications of your decision, and appreciate the economic impact that it may have over the rest of your life. Will this debt mean potentially putting off a house purchase for 15-20 years? Does it mean not having the money to support your own children through higher education? What kind of earning potential does this field of study promise?

There's a book "Going Broke by Degree" by economist Richard Vedder, where he comes to to the conclusion that some people never economically benefit from their higher education over the course of their entire lives, and I would suggest you read it, or something like it.

I'm currently in grad school, and its somewhat surprising to me that I need to remind the people here that they're not only incurring the typically ~$120-200k of debt from student loans here, but that they are sacrificing 3 whole years of income to be here, which is easily another $75-180k, and any savings and investments one might procure during that time. Of course, I am in a law school, and it is hard to find a graduate field of study that offers a larger earning potential vs. costs spent, but it is still necessary to property evaluate the costs of a degree.

@Skaperen: ya but there is a statute of limitations on actually collecting it.

But...don't do it for federal student loans...bankruptcy doesn't wipe them out as I recall.

But BOA get's a black eye from me because during my college days they wouldn't let me open a student checking account.

I assume she's talking about a variable rate. The current prime rate is historically low, it will not stay this low.

In order to get to 25 they probably tacked on about 22% to the prime rate...It's around 3% right now I believe.

I still say she's only hurting herself. Hopefully she doesn't have a bank account at BoA. The bank expecys to take a certain loss and they can always sue her and garnish her wages if and when she gets another job. I don't know if this is true or not but i was told some banks have a clause in loan agreements that would allow them to take money from you bank accout to cover defaulted debt if the accout is at the same bank.

The lesson isn't 'bad evil banks' it's 'If you don't have the cash for it, and it's not an emergency, don't buy it'.

I guess this woman isn't doing that?

I have two Bank of America cards, both with zero balance. My credit limit combined on those two cards is almost $40k.

Limits didn't start out that high. Bank of America increased my limit several times on both accounts.

She's right on one front - BoA encouraged people to use the cards with low interest rates and ever-increasing credit limits. It's no stretch to assume they also planned to suck in as many as they could so they could raise the rates.

She's wrong on another front - never trust a bank and NEVER run up a high balance on a credit card. That, and if the rate hike didn't come out of delinquency and only out of banker greed, she would have been able to opt out of the rate hike in exchange for closing the account.

@Skaperen: if she can afford to file for bankruptcy.

Perhaps I will bring a New Jersey loan shark into a branch and ask to transfer my balance to him because his rates are better and he's less of an a-hole.

But i am so with you...

This is why this is the end of the era of big business and the rebirth of the small businesses like the old ma and pop stores, that even tho they can't match walmart's prices, can deliver better service...

She thinks she has a right to a "middle class lifestyle." I think we're all clear now that that lifestyle, fueled by easy credit and insanely overvalued home prices was an aberration. We're now in the new normal. If she wants to survive in it she'll take her 25% APR and be happy about it.

Didn't the recent legal protections change prevent people from increasing interest rate on *existing* credit card debt? Or did I just dream that?

If you wait too long, the worst that happens is, they sue you. You can't go to prison or lose your house, car or job over it. As long as you bother to show up, the judgment will usually be much smaller than what they're asking for. Then they have to gather the information to garnish your wages which, if you're not a putz and give it to them when they ask for it, can take a really long time too. Worst comes to worst, they start dinging your paycheck, at (or before) which point, if your total debt is on the high side (I say $25K or higher, personally), you pay a lawyer and file bankruptcy, and the judgment, along with any credit card balances you have left, is discharged (if you don't make a lot of money & file Ch 7) or reduced to an amount you can actually pay every month, with no interest (if you have more money and/or lots of property and file a Ch 13).

Or you could just pay B of A's 30% pound of flesh and protect your oh-so-valuable credit score. ::coughprolecough::

Frankly, I don't really care what her excuse is. I'm tired of hearing about people who scream and cry that their interest rates are ridiculously high, but never took the time to pay attention to the way a credit card works. I never carry balances on my cards but even I know how it works. It reminds me of an episode of Boston Legal where a clerk (working at the firm) was in some serious debt and they challenged the credit card company which eventually forgave her debt. Stupid episode.

It varies by state and by type of credit it is (installment, revolving) but once it's out of the statute of limitations, you can send them a letter telling them the debt is out of the statute of limitations, they have to stop calling you, and all further communications must be by mail. If they violate the FDCPA, you can then file suit and collect $1000. Gotta love the fair debt collections practices act, no?

Info: [credit.about.com]

I cut up a lot of my cards to prevent myself from spending on them. I'm going slowly but surely on paying them all off, but once that's done, all of the interest I used to give to the banks will then be mine.

Yes, it's stupid to keep a balance. But then again, that's the motivation of paying them off and not putting a balance on your card - starving the banks of their source of easy income.

While I think what she is doing is a mistake that will only hurt her in the long run I understand her frustation. This is not a case of a normal adjustment to your interest rate. Most people don't have fixed rate cards. They have adjustable rate cards. The way it is supposed to work is that you have a card at a fixed margin over an index say 6.65 over WSJP. this would be at a rate o 9.9%. If prime goes up so does your interest rate. Prime has been at 3.25 for a long time. Banks have been adjusting customers contracts but sending written notices in advance. This can also be done on fixed rate cards by giving the customer notice. they have the option of closing out the card. I think the appropriate responce is finding a bank with a card with better terms. I went to a local bank in my town CoreFirst Bank. They haven't changed their rate struction in several years according to the person I talked to. They said that they couldn't promise that they wouldn't change them but the offer they were offering was resonable. I transfered my balance to them because they don't charge Balance transfer fees and the margin they gave me was 6.65 over prime. The card i had at Citibank went from about 6.99 over prime to about 16.99 over prime. I haven't been late on a loan payment of any kind in over 8 years and my credit score is over 700 so I didn't think the increase citi did was fare so I change companies and will not use them again. That is how I will show them. I didn't distroy my credit.

Gah. I think she is using language that is a little exaggerated for the situation (uh, rape & pillage? Didn't *you* sign your name on the dotted line to borrow from BoA?) and for the life of me I'm having trouble understanding the cost-to-effect ratio of this woman's "protest": BoA sells your debt to a collection agency at a cut while you get your credit score trashed. Doesn't seem to add up to me.

Honestly, the fact that she can't get the CEO's name right multiple times tells me that this lady ain't firing on all cylinders. And I *always* go to YouTube for personal finance advice, who doesn't ;)

I get where she's going, but in the end, she's, unfortunately, hurting herself.

She should completely pay off the balance (yes, I realize this might require procuring funds by extending her debt, she might be required to resort to saving money too). At any rate, after completely paying off the balance, shred the card and mail it to your financial institution.

I would just like to make one other point: I think that the repaid amount that she pays back should be at the initial rate; e.g., the rate prior to the increase. I would be ok (again, my opinion) if she refused to repay at the higher raised rate.

B of A truly sucks. I had my own problems with them and while I sorted it out and got my initial deposit back I did accidently find out that B of A Admits to using credit reporting services and not providing the required notification to the consumer so copies of the credit reports could be obtained.

[bankofamericageorgiasucks.blogspot.com]

@Pixel: Somebody already caught this, but the key is that it's up to 30%. Like when the weight loss program advertises that you can lose up to 50 lb. The only thing you're certain of is that you will not have a rate over 30%, nor weight loss of over 50 lb.

@supercereal: I cannot, for the life of me, figure out why a bank would give a loan to someone they knew would become bankrupted by the loan. Why would they do that? When I get accepted to a school, I assume it's because they think I can handle their curriculum. When I get accepted for a job, I assume it's because they think I will do a good job. The converse is also true (that when I am rejected, it is because they think someone else would be better).

Is it wrong for me to assume that if a bank gives me money, it is because they think I can pay it back plus interest? And when a bank is bad at determining this sort of thing, shouldn't they be punished for it?

That being said, it's still your responsibility to pay your debts. Furthermore, it's your responsibility to know the terms of your CC so something like this can't happen. Simply refusing to pay the debt because you're not happy with the terms of an agreement you entered into voluntarily is wrong. I hope now that she's brought some attention to herself BoA takes her to court.

Watch In Debt We Trust, it's a documentary (available on Netflix) and it gives you a good peek into the psychology that credit card companies use against the public to get them to charge more and carry more debt.

That is what has been happening during the past year.

Forced sales are very, very real--here's just the first thing that popped up in Google:
[www.illinoislegalaid.org]

I'm not saying this will happen here--in fact, very often CC companies don't even bother to get a judgment, let alone go to any lengths to collect it. The point is, though, judgments can be very, very real.

This is a perfect example of why we're in this situation in the first place. Someone runs up thousands of dollars in debt, and their first reaction is to throw up their hands and declare that they're not going to pay because the bank decides to raise their rates. If you are in debt, you are a slave to the lender, plain and simple.

I'm sure the apologists will come out of the wood works to tell me how she had to go into debt to pay for some unexpected expenses or whatnot. That's what an emergency fund is for folks. You sock away whatever you can on a regular basis and DO NOT TOUCH IT UNLESS IT IS AN EMERGENCY! It is NOT a "oh, that TV went on sale!" fund.

And I'm not really referring only to her situation since I don't really know what it is. I'm just speaking in general terms that having bad credit is not a death sentence and I'm proof of that. Yeah, I'd probably be screwed if I wanted to open a business. At least in this country!

BTW I couldn't watch the video cuz I'm at work.

@Skaperen:

Shame on BoA and all the others that are just driving more people into bankruptcy that might otherwise have been able to pay.

she should sell those dust collectors behind her to pay her bill. deadbeat.

The credit hit would be less with the chargeoff and collection.

@Yoko Broke Up The Beatles:

If easier means "more expensive" then, yes, life is easier without credit cards.

Fact is, the new consumer protection laws being proposed have a clause which forces the banks to leave the interest rate unchanged for existing balances. That way, you know the rate when you buy, and the rate for THAT debt won't change. When they raise the rates, then new purchases have the new rate, but the old purchases keep the old rate.

But, of course, banks being the stupid beasts they are, don't want to do things like this that let people keep paying, and instead want to keep doing things the old way, which is forcing more people into bankruptcy.

Not to mention, she's thinking her job situation is enough to keep her from not having wages attached. She's forgetting that in lieu of that, liens can be attached to property if she's refusing to pay her debts and has means to pay. The courts will help BofA collect their debt.

I imagine that someone may want to make an example of her - they're probably already shut down her cards and are going to demand payment in full since she's made her intentions known. Her public "I'm not going to pay!" speech had too much rhetoric and not enough "and I can't pay my electric bill for my iron-lung-bound Grammy" in it.

That case with the collectible cars in the background - not helping either. They'll make her the face of the entitled customer forcing them to raise interest rates.

She would have been better shutting down her card and then paying off her card at the original interest rate every month, but putting the money monthly in an Escrow Account until BofA agreed to lower her rate again. That way, she could show she had every intention of continuing to pay her bill, but that she disagreed with the interest.

You said "Whatever you bought, you probably didn't need it in the first place."

It might well be the case that she knew she could pay for what she bought, and limited herself to that level, knowing what she could pay. She might have figured that out by making a budget.

It might well be the case that she had a situation where she had "no choice". Maybe she drives an hour each way to work because there is no public transportation over that route and the transmission in her car broke down. So she had the transmission repaired or replaced, because it just barely fits within her available credit line, and hopes she'll be able to sell enough stuff to pay it off ... because the alternative is not getting to work, losing her job, and not being able to pay ANY of her debts at all.

This happens to people. IT DID HAPPEN TO ME ONCE. Fortunately for me, the banks were not operating in "stupid mode" back then. Today, it might actually be the event that pushes some people into bankruptcy. Others, possibly this lady, might have been able to just barely make the payments for the debt that let her keep her job ... and then the bank decides to jack her interest rate, raising her payment beyond the level she can pay.

People like you always like to oversimplify out of reality. The reality is that driving up interest rates is driving people into bankruptcy, and in turn hurting the banks. Many people do have situations where their money coming in is suddenly reduced, or they have involuntary new debts like medical costs. People can be making perfectly sound financial decisions and find themselves in over their heads anyway. Then the bank jacks up the monthly payment beyond the ability to pay. At that point, there is no choice. If she is in that boat (I do not know if she is ... but I know a lot of people are), I can understand why she is angry, and why she is wanting to take it out on the bank.

Not that I'm paying interest right now. I may be in the minority, but I actually pay off my balance each month and even have some savings. I think they used to call it "living within one's means". Unless she has a good reason for the debt (and there are far too many cases of responsible people getting wiped out by, say, medical bills), she needs to clean up her own mess.

If she were a tween, I'd understand her impulse to whine on Youtube about how life is unfair. But she's not, and she ought to realize that most of us don't give a rat's ass about her failures.

You should also be a part of the bailout plan!

Whats up with this bailout pipe everyone is tawkin' bout, Willis ? I'm not really into smoking that much, but if it helps... I guess I'd try it.

What allowed him to be in that apartment with me was because I had stellar credit.

@Persistence:

Thanks for the definition--the cc didn't take anything by force, steal, loot, or make extensive use as if by plundering of anything. So ... not "predatory," then.
Seriously, if a person is an adult, they have a responsibility to understand the agreements they make. Can't understand the terms? Don't agree to it. Any other rule is for children.

There are people who simply cannot pay anymore due to things like major medical expenses and job loss. They usually end up in bankruptcy. If the CC company raises interest rate in this situation, it becomes easy to take it out on them, too. She MAY be judgment proof.

What she's proposing is a small start, and there's much more that needs to be done to these bastards, but it's a start.

Shame on BoA and all the others that are just driving more people into bankruptcy that might otherwise have been able to pay.

* Main Entry: pre·da·tion
* Pronunciation: \pri-ˈdā-shən\
* Function: noun
* Etymology: Middle English predacion, from Latin praedation-, praedatio, from praedari
* Date: 15th century

1 : the act of preying or plundering : depredation

* Main Entry: 1plun·der
* Pronunciation: \ˈplən-dər\
* Function: verb
* Inflected Form(s): plun·dered; plun·der·ing \-d(ə-)riŋ\
* Etymology: German plündern
* Date: 1632

transitive verb 1 a : to take the goods of by force (as in war) : pillage, sack b : to take by force or wrongfully : steal, loot
2 : to make extensive use of as if by plundering : use or use up wrongfully

The practices of credit card companies are largely unsustainable to it's customers, and take advantage of how little the customers understand the terms, which makes it predatory.

Got any case law where that was the case?

@dmuth: Why assume that people who put bills on credit cards don't have the money to pay for it?

If I had to pay medical bills, I'd arrange some kind of payment plan, as that would allow me to pay it off in installments, rather than tie up my savings entirely. But if my car breaks down and you're in Podunk, Iowa, I'm definitely going to use that credit card to get my car fixed!

Then I got the zinger from Citibank. Upon opening my statement, I noticed my interest rate was at 29.99%. Playing by the rules, I was meticulous in paying my bills on time, even up to 2 weeks prior to the due date. Did a payment get lost in the mail? My bank statement said they received payment. What was going on?

When I called Citibank, the representative initially couldn't find any reason for the increase. Hadn't had a late payment in over 3 years, everything was current...she'd have to get back to me. About 30 min later, she called back & said that a supervisor had given my credit rating as the reason for the increase and that I had no option but to either accept the new rate or pay off the balance.

A sick feeling washed over me as I hung up the phone. My credit rating? Had my identity been stolen? A subsequent online credit report showed my rating as excellent.

I tried to play by the rules, but the credit card company chose to change the rules mid-game to such an extent as to make it virtually impossible to pay it off. $245/mo min. payment with only $5/mo as principal. I figured at that interest rate, it would take me almost 50 years to pay off just that one card. Ugh!

Four years later, after enrolling in a credit counseling program that slashed all my interest rates without defaulting on any of the accounts, we're 90 days from being debt free. There's many reasons why people rack up debt. This woman's might be for reasons we don't understand. My debt resulted from sheer stupidity & living way beyond my means, but it's difficult if not impossible for some people to pay off their debt when the banks arbitrarily decide to jack the rates of their customers.

Makes you wonder what a "revolt" would look like. What would happen if every BOA customer "forgot" to send in their payment for just one month...the same month. Would the bank get the message?

@wcnghj:

Well, if they get a judgment against her, some friendly sherriff's will come and put her house for sale/ garnish her paycheck, etc. If the CC company cares to do it, they *can* and do come after your assets.

I don't think everyone in the world is so wealthy that they have never had to borrow money, ever. Personally, I had car repairs, sevearal thousand in vet bills, and some unexpected house repairs all at the end of the last year. Sure, I should have had a lot more in savings, but I had to put a huge chunk of change on credit cards. I've learned my lesson, but I'll be paying off that CC debt for probably 2 years.

And I keep asking: "why spend money you don't have?" Where is the logic in that?

I'd much rather be into debt to a hospital and work out some kind of payment plan with them, rather than owe money on a credit card with some godawful rate of interest.

When it comes to charging lots of money on a credit card, remember--just because you can doesn't mean you should.

The "I don't use credit card" posts are just like the people that jump on airline threads to post "I don't fly anywhere and you should drive everywhere."

Basically completely irrelevant and self serving.

He just doesn't make them enough money.

Plus, assuming other positive, open accounts, this won't mean the end of her credit life.

Not every card debt is drunken vacations and designer handbags. Though I am a big advocate of just about any option other than credit cards for these very reasons. They are worse than loan sharks. The card bank owns you and can rewrite the rules however they want, your their slave.

@pecan 3.14159265: 8-10 years she will be home free. it will be like it never existed.

@cuchanu:

If she can't pay a little extra a month on her $5000 credit card balance how is she is going to buy a car with cash or put extra money down on a home?

Good for her. Morally, it's usury. Legally, unfortunately, it's not since the massive 1980 consumer-screw, where national banks became exempt from state usury laws.

Bastards.

I think that with a traditional CD you can only withdraw the whole amount that you put in, and there's a penalty for doing so before it matures.

With as bad as interest rates are, I just leave most of my emergency funds in a savings account that I don't have an ATM/debit card associated with. That way I can just go to the bank's website and transfer the money I need into my checking.

maybe she should try and do a balance trasnfer. *shrugs*

I'm not clear as to whether you still make monthly payments, or if you have to pay the whole thing off in one lump, though.

Beyond this, looking in the background of this video, I can see a pretty large collection of car models and furniture which could probably go a long way towards paying off her debt if sold... Also, dying her hair that monstrous concoction of red/brown/blond/black probably incurs a rather large monthly expense...

The bottom line is this: She comes off as inarticulate, unintelligent, and unjustified.

@mrgenius: And where do you think you'd be now if, out of the blue, your creditor doubled or tripled the rate on your $17k debt?

Now they are jacking my 2% minimum payment up to 5%, UNLESS I agree to let them raise all those rates to to 7%, and they know damn well that I can't pay the 5% minimum.

So yeah, back to being my usual liberal self now.

@vladthepaler: Were really getting off topic, lets just all agree with Vlad that this woman is really getting raped by BoA.

@Real Cheese Flavor: Can you get checks for a CD account, though? I wonder about this because what if the hospital wants you to cut a check right then and there, or use a credit card. It's one thing to use a credit card, then transfer the savings to pay it off immediately - but it could technically be easier just to cut a check straight from the CD account.

@sponica: If she can't/won't pay, she is entitled to bankruptcy protection so that she can write off her debts. And future potential lenders are entitled to steer clear of extending credit to a risky borrower for 7-10 years.

Perhaps living a cash-only lifestyle would be better suited to someone in her situation.

@dragonfire81:

Most of the time, yes, for the smaller debts like this one. Now, this particular person went ahead and made herself a minor celebrity on Youtube, so who knows what the outcome will be--probably a lawsuit, but for an anonymous person? Unlikely.
Remember, for the credit card company to "force you" to pay they have to first sue you, then get a judgment, and then actually collect it: you pay voluntarily, they get a lien on your property (of which there are exemptions in every state), wage garnishment (again, there are exemptions). Sometimes they do all this--more often, they sell these debts for pennies on the dollar to debt-collection agencies.
All of that assumes you don't respond to the lawsuit, and they get a defaslt judgment, if the debtor actually *fights* the lawsuit, a debt very much under 10K is absolutely not a winner for the CC company. It simply isn't worth the cost it would take to litigate it.

href="#c15368436">acasto:

Well, she agreed to the terms, so ... I still say deadbeat.

But, there also should be a word for what finance bullies do to people in a weaker financial position. The damages are way more than just the monetary amount you add up with a calculator. They undermine peoples' lifestyles and sense of self worth, as well as trying to get their hands on as much of their victims' hard-earned money as they can.

I guess the key word is "Up to" since that would imply a range of values under 30% of which 25% is a part of.

She had the option of refusing the credit hike. I received this same letter from BoA about my credit card about 6 months ago. The deal was:

A) Do not respond and your interest rate will change

or

B) Call us or send us a letter declining the changes. If you use your card at any time for any amount past April 1st, 2009, you will automatically accept the new interest rate, regardless of your declination.

So she obviously didn't read that letter or chose to spend on her card regardless of the warning. I had $3,000 of debt with BoA at the time. I have never missed a payment and always pay more than the minimum. Once I got the letter, I declined the changes and cut up the card. It was that simple.

6 months later I am only $400 away from being free of them, at which point I will be closing my BoA savings, checking and credit account for good. I was a fairly loyal customer but abusing your customers like this is not OK in my book.

Frankly, I probably would have struggled to pay it off so quickly if they had not barred me from charging any additional amounts to the card. While in the long term it is a negative move for them (they lost me as a customer), in the short term it is positive because they collected $3000 they didn't have before. My best guess is that this is a desparate attempt to reduce their outstanding liabilities + increase their cash in hand for 2009.

In summary, it was mentioned above but I thought I could clarify: She definitely could have avoided the interest jump if she was being a conscious consumer.

@kaceetheconsumer: It could have been from medical bills, and maybe she doesn't look sick anymore because she received proper medical care. But you're right - when you're sick, it's hard to think straight.

I know someone who was having some problems with their mortgage after their rate went up. They called the bank ahead of time to try and work something out. You know what the bank told them? That they couldn't do anything for them until they were so many payments behind. What sense does that make? As long as you are a good responsible customer, these customers will take every last dime they can from you. They will only play ball if you give them incentive too. It's sad and retarded, but unfortunately it's true.

@Trai_Dep:

There are probably more YouTube videos like this, but do you really have time to watch them? No, certainly not, what with keyboard cat playing pretty much everybody out and/or recapping Kanye vs. Taylor.

@Whtthfgg:

They can't, unless you agreed to the change.

What I find so sad about this whole situation, is all the cynicism that is going to come out of it. Many people have gone their whole lives being "good" customers and playing by the rules, and thought that for the most part at least the system worked. They would pay a price for a product or service, get treated fairly, everyone wins... common sense business. But over the past year or so, we have seen massive amounts of irresponsibility from the biggest corporations to the smallest house-flippers be tossed upon the backs of these otherwise responsible customers. Interest rates jacked up, problems with mortgages because the banks can't keep their paperwork strait, credit lines cut or dropped, etc... This is issue is about way more than someone carrying a balance on their credit card. It's about people getting burned while trying to function responsibly within the system. There has always been those who game the system and play dirty, unfortunately now that appears to be the only way to play the game.

@RobertBaron:

Look for the suggestion in a forwarded e-mail. It'll be right after the one you delete talking about bankrupting oil companies by not buying gas on a particular day.

Seriously, though, that's an interesting thought. I wonder myself.... One thing's for sure, it would take a MASSIVE shift in thinking, and an even bigger shift in confidence. We americans are trained (brainwashed?) to think that we gotta pay off debt, and on time, or we are screwed. (Yes, I realize the irony in me saying that despite records suggesting we americans ALSO charge more than ever!)

@sponica:

She'd lose her ability to make new charges, but depending upon her terms, she'd only need to pay on that balance at the prior interest rate. It seems to me she wants to keep that card open to charge more to it and is upset that to do so she'll need to agree to the interest jump.

@Ananelle:

"People" shouldn't influence your choice of majors. But your choice shouldn't be blank check to expect sympathy of others.

@DefineStatutory:

No one is arguing that you shouldn't get the car fixed. Some may be snarky and talk about what you should've done, but they're assholes. What is fair to say is that you shouldn't use your debt on that repair as some sort of whambulance card. Pay your debts, or persue bankruptcy. That's the ethical/moral way.

@Allen Harkleroad:

You shouldn't have closed the accounts!

Well, on the other hand, five (!)....yeah, you were right to do it.

And, you are absolutely right about how much life is easier w/o credit cards.

OK, hippies and/or bankers, exactly how high can one get smoking debt from bailout pipes?

@Tightlines:

There's no reason to immediately assume she's not properly managing her finances. Carrying a balance and assuming an interest payment along with it is perfectly fine in an awful lot of situations.

Not to give her a free pass. But just saying.

On the other hand, BOA (and others) are simply being abusive now. My own interest rates have been upped, and credit lines reduced, despite carrying zero balances and/or not even using the cards.

I see no reason to condemn this girl - but I see no reason to exonerate BOA either. No excuse for what the CC industry is doing to consumers now.

The credit cards ARE out to get you... well, your money. That's why they are in business. They do this through various methods (vendor charges for card use which raise prices, interest on balances, fees). I think the world would be better off without credit cards.

Then we have the stupid people who can't manage their finances and spend money they don't have. This is why I think basic finance classes should be taught in high schools. You know, how to manage a budget, balance a checkbook, interest rates, etc.

@drmcclin: I agree with the repayment moral issue. I was referring to certain purchases being more excusable than other purchases (like "we should excuse her if it was medical care but not if she spent it on jewelry).

What I was trying to get across is that lenders don't and shouldn't care WHAT the $ was spent on, just that fact that high balances and history of non-payment should affect everyone in the same way regardless.

If everyone destroyed their credit rating all at once, wouldn't that essentially reset the game for everyone?

@drmcclin:
You don't know her situation. She could have had a bad illness or injury, resulting in a multi-thousand dollar hospital bill. Maybe she just made a big purchase ( refrigerator, car transmission, etc. ) that she planned to pay off and could easily do so, but then got laid off the next day. I agree that, whenever it is possible to aviod, a high revolving balance is a bad idea. But, at least realize other things could have happened.

However, I do agree with others on here. She should at least talk to them to settle rather than not pay.

Can you imagine a single company being the only financial institution in America? That's a hell of a lot of power.

Um... I think what we'd prefer is something REASONABLE like, oh say... a regulation that says that banks can feel free to raise the rates on NEW charges, but not on existing charges--

I know, variable rates are clearly written in, but it ought to be something more reasonable and at least tied to problems w/ the relationship between you and the bank like a late or missing payment.

Or at least make it like an ARM--you sign up for your CC at say 12.9%, and they are not allowed to raise the rate more then 2% per month with a maximum of 10% per year and a cap of 30% overall interest...

At least give people a shot... this jumping from something reasonable like 9.99% up to 29.99% is bullshit--on a $5K balance you jump from ~$41.66/mo in finance charges to $125/mo, another $83/mo you have to come up with in a given month w/o little to no warning--at least my no more then 2% per month caps your monthly increase at $8-9 for a $5K balance.

@NewsBunny: That's true, but with every credit card company jacking up their rates, what can you do? Yes, it's good to have a low-interest rate card, but you can't keep opening up low-interest accounts in case you need to put a ton of charges on one and slowly pay it off.

F B of A.

@drmcclin:

X 2! I'm not exactly sure why not living up to your agreements is celebrated as of late in this country, but nothing good can come of it.

@wrjohnston19283: but the question remains "Can they on a whim change my 7.9 fixed to 12.9 variable?"

@DefineStatutory: i've been unemployed since May, got a car from my uncle which failed inspection. the choice was don't repair car and then not be able to drive car to interviews and the like, or bite the bullet and charge the 800 dollars and hope car helps me find job. living in the land of the car means needing a car.

@mrgenius: she'd still have to pay interest though, wouldn't she? it's not like she'd be able to cough up the thousands to zero out the balance

I do, however, question the validity of the contracts that the banks offer. IANAL but my understanding is that a contract must be predicated on a "meeting of the minds." When the banks unilaterally change interest rates ... which are a part of the contract ... to whatever they want to, whenever they want to, I'm fairly sure this does not constitute a "meeting of the minds."

Yeah, I get that's how these things work. I get that she signed an agreement that involved an inherently-uncertain interest rate. But I do not get how someone can be said to "agree" — knowingly — to something which is amorphous and defined only by one party to the contract, not the other.

I don't know whether Ann is right to do what she did. But I do know that the standard way business is done in the US, based primarily on "short-form contracts" — which by their nature always favor businesses over consumers — needs to be changed. I wonder if the nature of credit-card contracts — in which the banks have all the power to dictate terms and consumers have none — are sufficiently unconscionable as to trigger unenforceability under the principle of adhesion.

Somehow, though, I doubt this would ever be adjudicated in a court. It would never get that far.

(1) If she's missed payments recently, especially if this is her only line of credit or if she's missed payments on multiple lines, ain't nobody gonna extend a balance transfer offer to her. So she could have helped herself by doing that that before all of this started. Except...

(2) Her "initial" interest rate was 12.99%, so her credit may not have been that good before. It's also possible that she just didn't mind her rate, but if you're rolling a $6k balance at 13% with good credit and you're not constantly pestering the issuer for lower rates, then you're beyond careless. If it's the former, nobody would have helped her transfer out anytime in the past two years. If it's the latter, then this situation snuck up on her and we're back to (1).

@shockwaver:

But let's say it's only *responsible* debt, like medical bills--so? What does that have to do with throwing your arms up and saying "I won't pay." That's the part that makes her a deadbeat, not the spending.

She doesn't appear sick to me (not that I'd be able to tell from a video, unlike members of congress who apparently can diagnose vegetative states or not by video, heh), but the point is it doesn't help the overall issue of consumer debt to assume that everyone in debt is evil. In fact, if we assume the opposite and put in laws to make it so that ONLY the irresponsible have debt, that works out better for society as a whole, in my opinion.

In the good old days, the bank would simply have refused to issue the debt to someone who clearly can't afford to repay it. They actually underwrote loans because they bore the responsibility of screwups, rather than the taxpayer as the system exists now.

It is undemocratic and uncapitalist to pay a fraudulently issued debt to the benefit of the lending mafia that got us into this mess. The regulators and politicians won't listen to the real pain out there, so perhaps it's time for some civil disobedience.

And ruined credit rating? Please. When everyone has bad credit, nobody does.

@Whtthfgg:

Fixed rates don't adjust each month with prevailing interest rates. Variables can change each month as the prime rate (or whatever benchmark is used) changes.

I closed 5 credit cards 4.5 years ago, Now I used debit, check and cash. Life is good and I haven't paid anything in interest in years. I wish more folks would opt to not use credit cards, life is much less complicated and so much cheaper....

@pecan 3.14159265:

You know that most charge-offs in the CC industry are *not* actually collected, right? That's partuicularly true if thge debt is under 10K, like this one.

Either way it's an asshole thing to do to a loyal customer, you are right about that.

She can buy a car with cash. I did. She can rent an apartment with a little bit higher deposit. I did. She can get a job as well, believe it or not, even people with bad credit change jobs.

Buying a home...might be hard unless she already ownes a home with some equity then a down payment at a credit union towards her new home would be possible.

So in your opinion everybody with bad credit must be homeless? Or they are just stuck in the same job and home for the rest of their lives? Give me a break.

But to say this is not a moral issue? What if we were neighbors and I came to borrow $10k with the promise to pay it back, and then never did? You'd probably call that stealing.

It couldn't ever be medical bills. Or school tuition. No, nothing responsible like that, it's only ever frivolous crap.

Be a f^#cking human being? Yeah, that would be excellent. Thanks.

I think she's forgetting what the concept of credit is. Credit should be correlated strongly with one's ability to pay your debt obligations.

It seems clear that she poses a higher risk of default that the average person. Therefore, they SHOULD charge her higher interest to be compensated for taking on extra risk.

If she can't or won't pay, her credit SHOULD be screwed up so as to give future lenders a heads up about her ability (or willingness) to pay. That's how credit works.

I say this as someone who graduated college with 17k in CC debt and payed every penny off becuase it's the right thing to do. My credit certainly suffered for a period of years while I was paying it down (and rightfully so). When I finally had a track record of paying off my debts, my credit improved and my interest rates went down.

I don't think this is a moral issue. I don't care if she spend the money on health care or fast food or jewelry. Credit simply reflects ability to pay.

@lilyHaze: No, but she would have to transfer her debt to another card, hopefully with a lower interest rate - and it might happen all over again.

@vladthepaler: I don't know where you went to school but in the English language words often have more than one meaning. They are called "alternative definitions" and it is perfectly acceptable to use a secondary definition as long as the context makes clear which definition is intended. In this example, no one would seriously believe she means rape as in "sexually assaulted". Rape in this context means to "take advantage of to an unfair, unreasonable or illegal degree".

Thank you for your attention to this installment of English 102. Now go peddle your PC nonsense elsewhere.

She should borrow money at a cheaper rate (shouldn't be hard), pay off BoA, schedule destruction of her card in a public place, then post that video on YouTube.

@gparlett: Not at all true. It is increasingly unlikely the banks and creditors will be able to track her down and "make her pay". As long as she has access to the internet there are a million wannabe lawyers out there who can give her enough advice to make it more expensive for the company to try to collect than the debt is worth. I say good luck to her. They're trying to screw her, so she has every right to screw them back.

"A matter of principle"? Sure....

She agreed to the terms of the card when she signed up. Honor? Integrity? Just because the bank has none does not mean that it's okay for this woman to run away from her debt because she feels she was wronged.

I was under the impression that you were allowed to pay off your debt under the old rate if you didn't agree to the new rate (cancel) and stopped using the card.

Am I wrong?

@pecan 3.14159265: Most likely this will just go to a credit collection agency. Then be written off in a few years. Her credit will suffer until this debt is off her report.

@Pixel: You round up.

I'm switching banks already after the usaa mandatory arbitration thing, and first thing I told my wife, BOA, wells fargo and hsbc are off the table, dont even ask them what their rates are. Neither of us have any outstanding debt on a cc or anywhere else, but I support this woman and as much as I dont think it will matter I hope things work out for her.

I do without on a lot of things, and it really ticks me off when people get bailed out of their credit, bailed out of their HELOC, and bailed out of their mortgage, when the responsible spenders sit there being forced to actually pay for the decisions and purchases. If BofA gives her even $1 they should give everyone else $1 too.

There is a crazy pattern of entitlement going on right now, because everyone has their hand out (cue the woman asking Obama for a house). Just crazy.

Ive got a question. Is this something new. Cause I dont think it used to happen.....

I had a FIXED 7.9 and they moved it for NO REASON at all to a variable 12.99. Can they do that?

I guess the change happened in May, but I hadnt spent on it since last July.

What the hell is the point of a fixed rate if they can arbitrarily change it?

@Tightlines: Is it bad to have debt? Yes, but I agree with kaceetheconsumer. We don't know the reason for the debt. I could be medical bills or education expenses. Soemthing that required her to pay more than she had the available cash for.

@DefineStatutory: Right, but the interest is only charged if you carry a balance. It's not a loan; it's a line of credit. If the interest rate is raised to a level that seems too high for her, she has the option of closing the line of credit and paying the balance in full.

She is no hero by not living up to her obligations.

Maybe people need to be informed that "variable" means "can/will change at any time". Americans, by and large, seem to have forgotten that.

@dragonfire81: It won't work, either. She is obligated to pay off her debt, whether she wants to or not. Either she refuses until she's forced to pay, or she relents and pays.

Give me a break... I'm so tired of seeing these types of sob stories in the paper and on places like CNN... YOU are the one that spent money you didn't have. YOU are the one that signed off on the Terms & Conditions to do so (T&Cs that clearly state they can jack your rate at will). Maybe you should've thought of that before you let your greed takeover. Whatever you bought, you probably didn't need it in the first place.

Sad part is, millions of people will champion this lady: "AH, THOSE GREEDY CREDIT COMPANIES ARE OUT TO GET US!!" That's just the mentality in the U.S. these days... sad.

Cue the people running the "If you can't afford it, don't buy it" rhetoric.

Some of us don't always have the extra capital laying around to make important purchases. Tell you what, I'll decide to not make that transmission repair on my car, which will cause me to lose my job because I can no longer drive the hour to work, and see where that lands me.

Personally? I'm swiping that card on the rapair, and hoping to pay it off soon, but not this month. Not all of us make enough money to have a stash set aside for emergencies. Someday, yes, but today? I wish.

@Al Swearingen - I sort of agree about the $60/month, although that becomes big money when you're unemployed. Walk a mile in her shoes and see how it feels. If it were me, I'd be looking for some asset that I could liquidate so I could just pay the balance and be done with it (driving a hooptie for a year or two would be more than worth it, IMO), but I suspect she's probably already considered that option.

I do also know people who are idiots and overspend relative to their income, so I have no pity for them.

But without knowing why this woman has debt, it's a bit unfair to assume she's just an irresponsible shopaholic.

That being said, I don't agree with walking away either, unless it's through bankruptcy, which is the legal way to do it (and yes I know personal bankruptcy law has changed to make it ridiculously punitive).

Don't you know? Rich people are too infallable to fail. We must bail them out or they might have to live like the rest of us. Big companies can't fail! End of story. Now pay your bills!

And for whoever says the country would fall apart if we don't bail them out you're a god damn tin foil conspiracy theory nut case.

That said, the lesson that the girl in the video in particular and America in general needs to learn is: pay off your credit card in full every month. It's called responsible spending. If you can't afford it, don't buy it. The reward for spending responsibly is not having to pay any interest at all. The penalty for spending irresponsibly is that credit card companies are going to charge you interest. The choice is yours.

Each one to his own, I guess, as long as other people don't miss the bigger point and stop making payments.

But it doesn't seem like a good idea. Switching to ramen and selling some stuff seems like a better idea in the long term.

The woman is a moron. Sure, she might win the support of a lot of people, but we live in the real world where the inability to get credit has real world consequences. Good luck buying a home, or a car, renting an apartment, or changing jobs. She's effectively decided to ruin her life over an extra $60 a month.