MINI Credit Card terms changing.

[STLMINI]

First of all, this isn't a discussion about the merits of having a credit card or not. So those who choose not to use a credit card, please move on.

Ok, with that out of the way, I wanted to ask those who have the MINI Credit Card if they received a change in terms today and what do you think about it?

We've got a small balance on it and will pay it off before the terms change in November so it's really not a big deal. I just found it odd that we got this within a couple days of receiving a similar notice from another credit card that is attached to our checking account for overdraft protection.

[redZip]

I use the Mini Card, but havent received any notices yet. What exactly are the changes in terms ?

[STLMINI]

Basically the rates are changing to from fixed to variable (and are going up). For instance, if your rate today is 5.99%, on Nov 30 it will change to prime + 5.99%.

[RaceTripper]

I think for those who carry balances on CCs, the days of good terms are coming to a close. The new regulations on consumer credit is removing a lot of the mechanisms (many unfair) that CC companies used to raise revenue, so now they have to make up for it somewhere.

I have two credit cards that have cash rebates and an interest bearing checking account. I fully expect the deal on those will get less and less attractive. In fact, the interest on my checking account just lowered by 20%.

[Gromit801]

I've received a change notice from all of my credit cards. Something they have to do now by law. They're trying to gouge all their customers for as much as they can before the new credit card laws take effect with the new year.

If you opt out, they cannot raise your interest, but you are in effect, canceling your card. You still have to pay it off, you cannot make new purchases. When paid it's closed.

Great way to get out of debt really. Credit Card companies are going to be losing customers hand over fist.

[minicooperwill]

This is what the change is:

"The Purchase Margin specified in the Variable Rate Information section of the Summary of Terms is being revised to read "Purchase margin: 7.99%". The APR is determined by adding this margin to the Prime Rate. This rate varies with the market based on the Prime Rate. As of October 1, 2009, the Purchase APR is 11.24% (corresponding Monthly Periodic Rate of 0.937%)."

That is from the back of the notice I just got today. The rate now is 7.24%, so by going up to 11.24, that is an increase of over 55%. Ouch!

[veggivet]

None of these changes will affect you if you pay off your balance every month.

[jcauseyfd]

Originally Posted by Gromit801

Credit Card companies are going to be losing customers hand over fist.

I've been watching with interest as they keep tightening down on what are, ostensibly, their good customers. BoA treated us so badly, we didn't even look at them when buying a new house recently. So they lost all the interest on the home mortgage as well as the home equity line and my wife is probably going to pull the rest of her regular banking accounts out of them (we already pulled out our CD). And we didn't miss payments or were late or anything - just part of their regular "review" of accounts. We see it as their loss. Given their resulting financial results, I'm not surprised.

I actually felt sorry for one of my credit card companies from my business. Their underwriter decided to pull funding and they had to cancel all accounts. I thought they did a good job with PR given the bad situation they were put in. Didn't affect me as I did not have a balance.

Should be interesting to see how things have shaken out in a couple more years.

[EBR53]

Immediately, none of these changes will affect you if you pay your balance off every month but, longer term, I think we'll see secondary effects. "Rewards" programs will be cut back (slicing pretty thin, I know), perhaps the return of annual fees, merchant rates raised, etc. Good customer are more liquid. They'll just pay the card off every month or stop using when the benefits become very marginal so... something's gotta give.

We have one of the BP cards because it rewards at 5% on gas purchases. I pay it off every month and use it only for gas. The rate just went up on it. I wouldn't be surprised to see the reward rate dropped to 3% or 4% at some point in the near future.

I wonder if we'll see the return of store cards since they've not been able to offer the sustained low rates (not 90-day same-as-cash stuff) but they do have another way to make up that lost revenue in-store. We have a Kohls card and use it a few times a year even though we could pay cash or put it on another card. We just want to get the coupons, etc.

[RJKimbell]

I got the letter today as well...I was like WTF??!! I never carry a balance, but I still don't like the fact that I have never been late, or missed a payment, I even pay early and I'm the one getting screwed. I had been using this card for more than Fuel and Maintenance, to get the rewards points built up, now I guess I'll just use it for Fuel and Maintenance and start using my CU CC more often.

[MINIdave]

EBR53 has it exactly right....

Those who have perfect credit and pay off their balance each month are just almost as bad as those who never pay their balances - to the bank, right or wrong. The bank makes no money on either one.

I got the notice today, but I had cancelled my card after about 15 months of use due to discrepancies on the posting dates. I paid my balance in full the day I received it, but twice they tried to charge me a $29 late fee. The problem is they don't accept electronic payment - at least from my bank - and "somehow" the checks got delayed in the mail. They gave me a goodwill credit both times, but when the second one happened I closed the account.

I think folks will see a lot more of these fees, and if you just pay the balance each month without scanning the bill, the banks can score a lot of additional income.

[minicooperwill]

Let's remember that the credit cards ultimately are not really connected to MINI per se. Yeah, they have a pic of your car or a MINI logo and there are the rewards, but the credit cards themselves are all about the banking side, not the automotive side of BMW Bank of North America.

[ftttuhzbmcs]

I don't have a MINI CC but I did change banks yesterday because Wells Fargo upped our interest rate from high 5's to 13.6%. We also have perfect credit. I think there supposed to be a new law starting around November where they can't up the interest rate more than 3% on you so I hear almost everyone is going up. I don't know details of this or if it is true. We refinanced 2 of our 4 cars with this credit union which already has our other two cars. Got a 7.something% Mastercard, lower rates on the refinanced cars, and $400.00 free fuel cards.

[veggivet]

Many banks have been changing their terms since the financial meltdown last year. MINIDAVE, I haven't had any problems paying electronically. I wonder if it's an issue specific to your bank. I'll keep using the card and paying it off every month. The only money the bank makes off of me is the transaction fee that the merchant pays.

[Gromit801]

Two of my cards are Capital One. You remember their ad campaign, all about fixed rates and "What's in your wallet?"

Now they're going variable. Wonder what they're new ad campaign will be. Not that I care, I am opting out with them and they're losing another customer.