Many theatre businesses used low interest credit cards and lease programs to purchase equipment: now credit card companies are doing everything they can to maximizer their gross. If you have any of this credit: pay it off first, early, and do not be late.
Credit card issuers are making plenty of mischief before government reforms kick in.
One reader told me her annual percentage rate was raised twice since September, from 12.99 percent originally to 16.99 percent, then 21.99 percent.
Another said she received a statement with a due date in three days instead of the usual 10. Her husband had to scurry to get the payment off in time to avert a late fee.
A third reader with an eye-popping 815 credit score got a rate increase from 8.9 percent to 17.9 percent effective this month. He is flawlessly paying down $10,000 of his daughter's college expenses on a credit card. He has been a good customer for 20 years.
Why are credit card companies doing these things to consumers? Because they can, consumer advocates say -- at least until July 2010 when numerous industry reforms kick in, including curbs on raising rates.
"The Federal Reserve foolishly gave 18 months before banks had to comply with the new credit card rules," said Ed Mierzwinski of U.S. PIRG. "We're in a period of chaos where the banks are changing the rules at any time for any reason."
"It gives companies an awfully long time to adjust people's interest rates without worrying that the government will be looking over their shoulder," said Linda Sherry of Consumer Action.
What can consumers do to protect themselves? "Nothing might work," Sherry said.
But some issuers still value good customers. So, try these suggestions:
Explain clearly what you want. If you want your credit card rate not to be raised, say so, Sherry advised. Jot down your specific request before calling and take notes.
Prepare to go up the chain of command. If calling customer service doesn't get results, ask to speak with a supervisor, manager or the person in charge of customer retention, urged Christopher Fichera, associate editor at Consumer Reports Money Advisor.
If the company won't budge, hit the road. There still are financial institutions offering zero percent balance transfers and low annual percentage rates to people with good credit, Fichera said. Check out the rates and terms of smaller banks and credit unions, too.
Open your monthly statements at once. They may contain important changes to your rate, due date or other terms. If a notice says your credit limit is getting lowered, for example, your credit score may get zonked. The new limit may put you too close to your credit maximum. "People don't realize that the credit scoring computer treats you harshly if you're over one third of your limit," Mierzwinski said.
Pay your bills soon after receiving them. Now is no time to pay late because card companies still can deeply penalize you with fees -- then other card issuers can follow suit. Also, don't assume that payments made online or by telephone will get posted instantly, warned Mierzwinski.
Try to reduce your big balances. Otherwise, you're a sitting duck. Use your underused card. To keep it active, use it for things you would buy anyway, then pay it off each month, Sherry said.
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