Well now I'm annoyed!

[Eeyore]

Okay, last week I was real happy with the VISA people (still haven't received my new card yet though) but today I'm po'd at the loan people! Been dealing with the same bank for 30+ years and got a letter today stating that they are (randomly) raising the interest rate on our LofC by 0.50% "to be consistent with our current market rate"!
Can they do that? When we signed we signed for prime and no matter what the "current market rate" is we still signed at prime! ARRRGH! I get so annoyed having to phone and beg for something when I've been a good client! P's me right off!
Guess where I'll be on the weekend? Talking to the bank and looking for a new one if they insist on this!

[hotsummerone]

Each bank are the same, because they have common interests.

[Heidi S]

Good luck finding a new bank that offers something better. As a retired banker I can say that almost every bank and credit union I have knowledge of, has made this change in their lending policy in the last couple of years. Somewhere in their loan documentation is the language that allows them to change the parameters upon written notice to clients.

As most of the banks found the margins on line of credit loans too thin, they changed to a new 'version' of bank prime, which includes an extra premium to improve profitability. It has to do with the definition of 'prime'. This isn't a random act by your bank, it is a strategic move to make more money from your use of their lending service. Banks are in business to make money for their shareholders and this is just one of their strategies to make up for losses experienced over the last few years since the last big meltdown.

It doesn't mean they don't value your business, they just want/need to make more money! But if you do find a bank who will give you the rate arrangements you want, be very clear on what the fine print says about changing the definitions in the future, and don't just take someone's word for it!

[Eeyore]

Thanks Heidi.I was hoping we had a banker on board. Apparently our bank is one of the last to make this move. Still annoys me though and we will be going to talk to them. It seems cost of living is going up faster than income and this is just another kick in the shins!

[Dumbo]

Only 2 things I've never been able to negotiate down.

1. House insurance: The lady actually laughed at me.

2. Bank.

No advice from me. But I'll take some

[bluewillow]

Lyn, I deal with a major bank as well. I was told that Credit Unions (anyone can join here and we have a few about) were the route to take. I'm still with one of the major banks. Good luck with your negotiations.

[Eeyore]

Credit Union is one option we will be looking at Sheila.

Marc, we've actually had good luck with our bank before, lets hope it holds out.

[DonnaZn2SK]

I just checked my heloc and I'm still at prime. I am RBC too, so you should see what's going on...did you have a change in your credit score recently?

The banks have a little discretion to change rates, but not a whole lot. Their focus is on profits, but they try to help their customers save in other ways. For example, RBC will rebate the banking fees on the $10.95 no-limit package if you have a few investment products with them. We have the Infinite Avion card and it gives us free traveler's cheques and cheaper USD Visa card. Which new Visa did you get?

I don't like switching from one place to another unless I am getting really bad service. We have a great relationship with our local branch, but it is definitely not something I would assume is experienced all people. I have heard some horror stories.

Edit: For some reason, I thought you were with RBC..anyway, you should still check, although I always though line of credits had a floating rate...

[Rupietoot]

When you refer to a "heloc" do you mean "home equity line of credit"? If so, then the rate is locked at prime as the line of credit is secured by the equity in your home. A regular line of credit (loc) can and will have a fluctuatiing interest rate ... I think anyway

Susan

[DonnaZn2SK]

When you refer to a "heloc" do you mean "home equity line of credit"? If so, then the rate is locked at prime as the line of credit is secured by the equity in your home. A regular line of credit (loc) can and will have a fluctuatiing interest rate ... I think anyway

Susan

Yes, I guess those are two different products. I was reading about some banks that are sending out unsolicited line of credit applications to people with much higher than prime rates. I never "take advantage" of unsolicited offers, and we sure get lots of them in our junk mail.