Credit Card Madness: Can We Play a Game?

By not drinking the Kool-Aid you didn't enjoy the party. Everybody else enjoyed the party; they have better cars than you, they took bigger vacations than you and now your credit is being whacked for something you didn't do."

This is a quote from my husband today as we sit here contemplating the state of the union as we do most evenings while catching up on our Tivoed "real" news: Nightline and Frontline, Meet the Press and BBC News, 60 Minutes and CBS News Sunday Morning. Not to mention our "fake" news The Daily Show and The Colbert Report. It takes us a while to slog through it all because we are always pausing and commenting throughout. "Pause that" is an often used phrase.

We have been reacting strongly to the current credit card situation because we funded our small business with credit cards at cheap rates and now we are being forced to pay back "old" borrowed money that is 2 and 3 years old at a steeper rate. In addition our credit lines are being cut as well. I'm not too concerned about preserving the credit lines because we never used these cards for any other purpose than for the business. Now that the business is defunct, we are simply just paying them down as quickly as possible.

Anyhow, I was railing about the fact that Bank of America had simultaneously cut one of our credit lines very close to the current balance and doubled the interest rate, creating a situation where we were over the limit once they added on the finance charges. In fine print, in the middle of the statement, along with all of the other benign announcements, was a penalty agreement stating that we would be charged over the limit fees unless we brought the balance down, below the new credit limit, within 20 days of the statement date; a date, mind you, that was over a week prior to the usual due date. Furthermore, we must keep the balance under the limit going forward or else we would have to pay the fees. In order to remedy the problem you must be aware that you need to include enough funds to cover the next addition of finance charges or else find yourself back over the limit again and subject to those penalty fees. Did I ask them to drop my credit line by $18,000. No. Did I ask them to double my interest? No. Yet, by their action, they deliberately attempt to trip me up so that they can collect fees as well. Ain't that some shit? This is just madness.

Bank of America is one of those banks rushing to pay back its TARP funds because it is suddenly flush. I would be flush too if I got to borrow from the Federal Reserve at practically 0% and then turn around and jack up the interest rate on existing credit card balances to 15% and over in most cases. Anyone could make lots of money if they had this kind of deal. To make matters worse, they are not lending much at all which was the sole purpose of the bailouts, was it not? We have had a credit-fueled economy for the last decade, credit card companies cannot just turn off the spigot without unleashing another set of dire consequences for the economy.