Financial News & Information.

I sit at my desk completely frustrated with Advanta. I opened up a business credit card with them 3 years ago and made a purchase of $6500 to help build my business credit for Rapid Recovery Solution, my Collection Agency. I have paid more then the minimum every month, on time. About 3 months ago noticed that my interest rate seemed a little high. No where on my statement did it say the actual interest rate so I called the company. After 10 min or so I get a live rep on the line and they tell me it is 36.1%. Are they kidding, this must be a mistake. I have over a 750 score and never missed a payment. They said they sent me a notice in Aug that they are doing this due to a change in there lending methods. It turns out this is the second time this year they did this. I went from 8.99% in Jan 08 to 18.99 in Feb 08 to 36.1% in Aug 08.

Now, being in the industry for over 10 years I know that I need to watch my credit. I look for charges I didn’t make and it is tough to scam me. I have seen it all but this takes the cake. They told me I am now at a high risk for default so that is why they raised my interest rate? That doesn’t make any sense. They should lower my rate if they think I will default on my credit card. How will an increase in what you are charging me keep me from defaulting. Luckily, I have the ability to pay off this card today but I want everyone to realize that these companies have you by the short-n-curly’s. Watch your statements and lookout for this scam.

FYI, In NY, the maximum interest rate is 30%. They are charging me more then the maximum allowed in my state. I will send a letter to the BBB, the NY Attorney General, the UT Attorney General and the Department of Consumer Affairs.

As a nation we are in deep trouble. If a credit card company can just raise my rate because they feel like it I am positive that 99% of their customers are also paying 36.1%. How many other credit card companies are doing this to innocent people? We need to fight back. I am going to tell as many people as I can.

Unfortunately, there is nothing we can do except payoff the card. I was told I am a high credit risk. I paid the bill in full after I realized the rate was so high and the next month I received another bill for more finance charges for about $255. I paid that bill in full. I just received another bill in the mail for $5.65 and my rate was changed to 37.99%. Another point higher.

I had a few minutes so I called again to see why the rate went up again and they said “Sir, you have been classified as a very high credit risk and as a company we can’t risk you not paying your bill with us.” I said “I just paid my bill in full with your company, I have never had a late payment with your company in three years, I have one mortgage on my house for $290K, 25 years left at a fixed rate of 5.375% and it is worth over $500k and almost zero credit card debt personally. I am in the fastest growing industry right now, CNBC expects the debt collection industry to grow at 25% a year for the next decade. What else would I have to do to receive a better rate?” The extremely rude lady said “Sir, you would need to send a letter to Santa Clause and maybe he can help you out.”

The Government should put a maximum rate in place for the next year or so on all credit card debt. If the credit card companies are truly worried about consumers defaulting on their obligations, wouldn’t it make more sense to lower the rate so we can continue to make the payments? By raising the rate, it only makes it harder to pay and more likely that a consumer will default. The credit card companies are preying on the weak right now hoping you don’t pay so they can pound you with the highest interest rate. When you do default, they now have a higher balance to sell to a collection agency. In my eyes, this is a crime.

The Government doesn’t care either. Instead of giving the banks 350 billion dollars, They could have sent $1151.98 to each US citizen to pay towards credit card debt. The banks still get the money but we the people get a little break on our bill. The average family of four would receive $4607.92 to pay off a credit card. They reason that the banks need the money so they can lend money again to us? Are they crazy? All the banks did was raise the interest rates on our cards and pocket the money without ever having to say what the money went towards. No accountability!

Now the geniuses in Washington are considering giving billions to the auto industry so they can produce more shit cars that we can’t afford. How about giving the money to everybody with a current auto loan so we can pay for the car we already have. The money would still flow to the banks and auto makers via we the people.

Good luck America, your gonna need a miracle.

I feel better now. I was very upset prior to writing this blog. I hope everybody reading this realizes that if it can happen to me it can happen to anybody.

John Monderine Rapid Recovery Solution, Inc.

When you find yourself in a situation that may lead to larger complications down the road, you try to find the fastest and most headache-free solution to the problem. It is always the best way to nip the problem in the bud before it even starts.

The same principle applies when you’re dealing with accounts that have lagged on payments, whose checks have bounced, who have totally stopped making their payments and have deemed themselves unreachable and a dozen other scenarios that will surely make your head spin. The role of your credit manager if you have one, at this point, is to decide whether to deal with these problems in-house or pass on these accounts to a collection agency that will then be tasked to follow-up and, at best, recover the money owed to your company.

Usually, a debt collection agency is called upon when you really have an overwhelming problem with your customers’ payment backlog. You’ve already tried resolving the issue using your in-house crew and having them initiate non-threatening appeals to your accounts by making phone calls, sending letters and even making personal visits. Or, sometimes, the problem has persisted and you find that your whole business has reached its danger zone and its plight hinges on whether or not you can recover some of the money that you lost. Whatever the case, hiring a collection agency seems to be the best way to deal with the situation.

However, extra care must be exercised when you finally decide to place your past dues with a debt collection agency. You have to remember that hiring a collection agency means that you are turning over a part of your business to someone totally on the outside. First of all, when you choose a debt collection agency you have to be sure that they come highly recommended by someone who has made use of their services and have been highly satisfied with them.

It is just as important that you check with an accrediting organization like that of the Better Business Bureau. This just makes sure that the debt collection agency that you’ve hired is regulated and subject to a higher power if they fail to deliver on their promise.

Second, when selecting a debt collection agency, you have to consider their technological capacity and equivalent manpower to handle your demands. When you say technological capacity it means that the agency will have the contact center in place to handle any communication between your customers and the agency, with reporting to be done on a regular basis to you as the ‘mother’ company.

You also have to make sure that the agency’s staff is trained to represent you as the client and not be seen as a third-party provider. It has been reported that some people are adverse to collection agencies and are more prone to shying away from them which will make it harder for you to go after them.

Their experience and customer-related orientation need to be as good as the fees that you’ll be paying. You need to negotiate a good compensation package that will take into account all of these conditions mentioned so you’ll at least be assured that you’re getting your money’s worth. It doesn’t make sense for you to be spending so much and not getting anything in return.