Two days ago I received an application in the mail for an ATT citibank card. While reading the terms and conditions they now have this little blurb: All your APR's may increase if you default under any Card Agreement that you have with us because you fail to make a payment to us OR ANY OTHER CREDITOR when due. I added the bold type. Coincidentaly, yesterday, on the news they had a story on how discover card had changed their cardholder aggreement. They added that if you are late on a payment with ANY CREDITOR they can raise your interest rate up to 25%, or close your account, or close your account and demand full payment, and it is proactive from 12 months ago. That means that if you were late on any payment with any creditor, within the last 12 months, the new terms take effect. I don't know if this is only in california ( I live there). So read any new credit card apps carefully. A lawsuit has just been filed against discover.
This has been in many card agreements for a long time. In fact, Bank of America just changed their terms last year to say they would only raise your rate if you were late on an account with them. But the "if you're late with any creditor" has kind of been the norm all along.
This would appear to increase the likelihood that sufficient provable damages would accrue from erroneous late payment posting due to cascading rate increases to make filing suit over negligent non-compliance profitable enough to attract class-action litigator interest. Creditors seem to forget that the stream they muddy is the same one they drink from.
Was your application a pre-approved? I have just received one from Citi that is pre-approved, and am wondering if they will run a hard inq. I have applied for a number of pre-approved in the past with out a hard inq., but never sure. Information from anyone on the recent Citi Diamond Preferred preaproved offer would be appreciated. Also on raising rates due to being late, I would think it would have to be 30 days or more, or turned into the CB's. I don't see how other companys would know if it wasn't turned in. (As far as I know CC company's don't turn lates in unless over 30 days. Any comments on this?)
