YouTube rebel attracts some allies
Suze Orman chastises banks, and senator proposes freeze on rates.
Ann Minch, the California woman who got Bank of America to rescind its interest rate increase after she took her fight to YouTube, has recruited an unlikely ally: Suze Orman, the financial author and TV personality and advocate for protecting your FICO score.
Minch was featured on Orman’s television show on CNBC, where she told her story and Orman aired clips from her video. While Orman didn’t advise her listeners to quit paying their credit card bills and make YouTube videos instead, she did chastise banks for arbitrary increases in rates, fees and minimum payments and suggested that viewers move their money to credit unions.
“There is a phenomenon happening in the United States of America. It’s where people are getting seriously angry, so angry at their banks, their credit card companies. They feel like they are not being treated fairly when it comes to the interest rates they are paying,” she said in her lead-in to an interview with Minch. “Guess what they're doing: They are staging a debtors' revolt.”
Credit card companies have continued to raise rates and minimum balances, as well as add fees for customers in good standing in advance of restrictions on rate increases and hidden fees that go into effect Feb. 22.
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The companies’ attempt to rush through rate increases in advance of the new laws hasn’t escaped the notice of Congress. Sen. Christopher Dodd, a Democrat from Connecticut, introduced a bill Monday that would freeze rates and fees on existing balances until the new law takes effect.
“At a time when families are struggling to make ends meet, jacked-up rates can quickly create crushing debt,” Mr. Dodd said in a statement that was reported in The New York Times. “People need to be responsible with their money, but they shouldn’t be taken to the cleaners by outrageous fees.”
Since Minch first posted her video on YouTube in September, telling Bank of America to “stick that in your bailout pipe and smoke it,” she has attracted more than 400,000 views. Other irate credit card customers also have posted “debtors’ revolt” videos on YouTube, reports Arthur Delaney of The Huffington Post, one of the first bloggers to write about Minch. Several have gotten results, he wrote.
More Web sites are springing up complaining about the practices of banks and credit card companies. Dr. Robert J. Lahm Jr. at Change in Terms has some suggestions to bring about action, including making YouTube videos, writing to Congress and talking to the media.
While frustration with credit card companies is rising, Minch’s fame apparently hasn’t spread quite as far as she would like. She recently got a letter from Chase, saying the interest rate on her $3,554 balance was being raised from the 0% introductory rate to 21.24%. She posted another video of her call to Chase, where the offshore customer service representative, not surprisingly, was clueless about both Minch and the debtors’ revolt. In this video, she also shows off her new Debtors’ Revolt T-shirts.
Daniel Indiviglio of The Atlantic’s Business blog argues that credit card companies raising interest rates in response to the new laws aren’t as shady as Dodd and most consumers believe. “Last spring Congress changed the rules of the game,’’ he wrote. “As a result, credit card companies had to completely reconfigure their profit strategies. … Since they couldn't raise interest rates as arbitrarily, they deemed the best solution was to raise them across the board. That way, a broader revenue base would make up for the money they lose by having less flexibility.”
What do you think? Should we all just say no to credit cards? Ironically, using credit is one way to keep our credit scores higher. Cancelling old cards you’re not using could actually lower your score. In the past, we’ve favored stashing unused credit cards in a drawer for emergencies, but now banks are canceling those cards because we’re not using them. After decades of using credit cards to buy everything from a cup of coffee to a car, could we as a society ever return to cash?
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