HSBC Rate Jack (Check your promotional rate!)

I opened up a HSBC credit card with a 12-months 0% offer in May of this year. I have been making perfect/minimum payments on this account. I found out that my rate has been hacked to 20+% for November, and was charged $150 in finance charge.

I called customer service, and was told that a "change of term" was sent to me in my August statement. I don't remember reading such term. The rep said she had no access to the actual letter, just that it was send to "many members" and that it had something to do with the "behavior of the account." She made specific reference about how I didn't use the account after the balance transfer.

So, if you have an HSBC account and have been taking advantage of the 0%, watch your account.

Also, I was always under the impression that CC companies can change your terms, but not the intro APR, unless you default on any accounts (which I haven't). It doesn't look like HSBC is following this.

Should I pay off my balance now to avoid further finance charge, or should I complain to higher up and see if I can get my 0% reinstated?

Balance transfer away, switch to paper billing, and shred the card.

Not only Rate Jacking, they will also charge you $xx annual fee at your card's anniversary date. The CSR didn't tell you??

HSBC credit card sucks.

OP said: She made specific reference about how I didn't use the account after the balance transfer.

This is new news to me. I didn't know that they could do that. So what's to prevent Chase, Citi, Discover from doing the same thing and rate jacking you when they find out you haven't made purchases on top of your balance transfer?

highmktgoods said: See my post from a few days ago on The adverse action thread. HSBC sent me a letter and it read, (as I typed it on that thread) that the rate jack would go into effect in January for all "existing balances." I called and they said it doesn't have affect on intro rate. But I think I may still pay them off.

I read what you posted. However, I seem to be in a worse situation than you are. I actually elevated and talked to an account manager, but to no avail (he was either as helpless, or as unwilling to help, as the frontline CSR). I got a number for "upper management" with an extesion, but this is after I pressed him for the address to the President's Office.

Also, unlike in your case, I have already been charged with the default rate on my existing balance.

ckpeter said: Also, unlike in your case, I have already been charged with the default rate on my existing balance.if you are being charged the default rate, you better check all 3 bureau credit reports...

Im betting you have some negative info on there from some OTHER place, and HSBC invoked UNIVERSAL DEFAULT.

Check your reports. I seriously doubt HSBC is ratejacking you for no reason.

I wouldn't be terribly surprised if they just want to close my account.

Oh, no they don't want that. Only open account can generate fee income. They'll reduce your credit line to 300 bucks, but they won't close it.

ckpeter said: I opened up a HSBC credit card with a 12-months 0% offer in May of this year. I have been making perfect/minimum payments on this account. I found out that my rate has been hacked to 20+% for November, and was charged $150 in finance charge.

I called customer service, and was told that a "change of term" was sent to me in my August statement. I don't remember reading such term. The rep said she had no access to the actual letter, just that it was send to "many members" and that it had something to do with the "behavior of the account." She made specific reference about how I didn't use the account after the balance transfer.

So, if you have an HSBC account and have been taking advantage of the 0%, watch your account.

Also, I was always under the impression that CC companies can change your terms, but not the intro APR, unless you default on any accounts (which I haven't). It doesn't look like HSBC is following this.

Should I pay off my balance now to avoid further finance charge, or should I complain to higher up and see if I can get my 0% reinstated?

Banks do NOT raise introduction BT rate transfers without specific cause (late payment, income to credit utilization ratio, and so on). Alot of people have applied for the HSBC Direct Rewards Credit card and I have NOT heard of one complaint. In fact, to the contrary, cardholders were finding that they were getting REWARDS points for their balance transfer fees to boot.

You are obviously leaving something out, such as a recent late payment to HSBC or another credit card or issuer that you have or something inbetween if this senario really did happen or you are a subprime customer. Which specific HSBC Card was this, and do you have a perfect credit history? One late payment will jack the rate on ANY CC ISSUER.

If HSBC did something wrong I would be the first one to recommend filing a formal complaint, but so far you have not posted enough information to determine exactly what happened.

I have had cards with all the major issuers and have NEVER EVER received a rate jacking on a BT rate. Banks CAN raise rates on non promo rates at their discretion, in fact Chase applications even mention this can happen if you read the fine print for instance. As for HSBC the same thing would apply here.

I agree with you. This is not the usual with any of the credit card issuers including HSBC.

The rep saying many accounts were affected is bogus. The complaint here is the only complaint I have seen so far. People have been VERY happy with the Direct Rewards cards for instance, the only problem is that they are VERY hard to get and alot of people with top credit scores were getting denied for them. The people I know with HSBC Direct Rewards have not seen any such rate jacking for BT transfers. EVERY bank will have rate jacking but I havent heard of one on a BT transfer rate before without the accountholder having serious issues (including failing to pay on time)

HSBC is a British bank but is now offering one of the BEST Rewards program in the industry for heavy spenders, in fact it was top rated by Money magazine apparently.

HSBC is just as reputable as a bank as any of the other players in the industry.

I would take the advice of SUCKISSTAPLES as something is red flagging you and you haven't posted enough information to determine what had happened.

g10ny took a balance transfer from HSBC. In that thread there have been 0 complaints of rate jacking.

It's clear that either the OP is intentionally not telling us about some negative info on his credit reports, or he is not aware of it yet.

He's probably wasted a lot of CSR time at HSBC.

too early to determine what happened yet

only way to tell is if more complaints come through

The HSBC Direct rewards card isnt the best for balance transfers for instance, but it is one of the best for rewards for high dollar amounts so HSBC is still a card company in the running.

Best for BT's in my own experience: AMEX, Chase, Citibank AND BoA.

ProfitKing: Which HSBC Credit card was this?

Interesting.............. Haven't had this happen to me before. Guess I will steer clear of HSBC 0%s till we figure out what is going on here.

Maybe some knows, was the HSBC card you had one that was issued by Household or HSBC proper? Wonder what is happening here.

At any rate, the banks always win on CC's so the best is to pay in full and use cash rebate cards IMHO especially if a new trend is emerging where BT's can turn into high interest rate fees.

The OCC is in fact the appropriate department for complaints here, but the odds are it will not be taken seriously.

These situations happen with ALL the credit card companies and banks and its very rare for their to be exceptions, but I was unaware that HSBC was not abiding by Balance Transfer agreements when it is the norm with other issuers that they are honored.

Let us know what happens in your situation as I would be interested in knowing the resolution and outcome. If this is a new trend, then it makes those low BT rates a thing of the past. A 22% APR will eat away those rewards.

The first step is to file a proper billing dispute to the address stated on the bill for filling billing disputes.

Dispute that the finance charge is incorrect and attach a copy of the promotional materials that indicate what the finance charge should have been.

Send the dispute via certified mail.

This does not preclude other actions such as complaining to the Federal Reserve, but a properly filed dispute is required to preserve OP's rights. Once the dispute is filed, they are required to respond in writing with an exact reason for their adverse action along with the notice that you are entitled to a free copy of the consumer report they based their decision on.

fdicenforcer said: Interesting.............. Haven't had this happen to me before. Guess I will steer clear of HSBC 0%s till we figure out what is going on here.

Maybe some knows, was the HSBC card you had one that was issued by Household or HSBC proper?


HSBC proper.

I haven't heard of any problems with the hard to get Direct Rewards card so far. The problems seem to be coming on the regular stock HSBC credit cards as far as I can tell. If anyone has the Direct Rewards card and has had problems, I think alot of people would want to know considering this card is very well liked amongst high spenders due to the high rewards rate. The approval rate seems to be very low since people with top ficos and perfect credit have been denied.

Even though some people ARE getting ratejacked, I still think they are likely to be the exception and not the rule. You said you took out 10k of a 12k balance transfer. Was your credit perfect with no lates and a high FICO score with large paybacks?

HSBC is not a card people usually use for BTs because of higher fees.

Seems like at the moment till we find out what is going on, one needs to steer clear of HSBC for BT's especially since one can do BETTER with most other issuers at this time.

http://www.americanchronicle.com/articles/viewArticle.asp?articleID=17619 is an article which is very fitting in this situation. If after you play the game and they treat you bad, then switch to another issuer for BTs.

Are you sure you didn't receive notice of changes to the terms and conditions that maybe you overlooked? If I would have received such, I would have PIF, cancelled the card and moved on to another issuer but the fact is they noticed you as a greater risk so I bet you could have seen this issue with others as well.

HSBC does NOT in my experience give out rates that are as favorable to BT's so generally for the BT game, HSBC is NOT a leader.

Fellows, let's keep the thread on topic. I started the topic so that we can all benefits, let's keep it that way.

For those wondering about my credit: there is nothing negative on my reports, from all three bureaus. I appreciate your investigative spirit, but defaulting was not the reason for this rate jack.

A few more details:

- Originally approved for 7K CL, requested CLI to 8.5K.
- Made two BT in the beginning, and have been paying $90 since (perfectly, thanks to MBNA bill pay)
- I do have sizable AOR balances on two other accounts (Discover and ATT), but the payment history is perfect on those as well (thanks to MBNA bill pay again)
- Supposedly, the notice for rate jack is from August, and was going to take effect in November (as I said, I don't remember seeing such notice).
- This is the HSBC CashBack Platinum card (I applied on HSBC's site, not household)

ckpeter said: Fellows, let's keep the thread on topic. I started the topic so that we can all benefits, let's keep it that way.

For those wondering about my credit: there is nothing negative on my reports, from all three bureaus. I appreciate your investigative spirit, but defaulting was not the reason for this rate jack.

A few more details:

- Originally approved for 7K CL, requested CLI to 8.5K.
- Made two BT in the beginning, and have been paying $90 since (perfectly, thanks to MBNA bill pay)
- I do have sizable AOR balances on two other accounts (Discover and ATT), but the payment history is perfect on those as well (thanks to MBNA bill pay again)
- Supposedly, the notice for rate jack is from August, and was going to take effect in November (as I said, I don't remember seeing such notice).
- This is the HSBC CashBack Platinum card (I applied on HSBC's site, not household)

What is your income to utilization ratio as well as CLs on other cards and do you have large paybacks in full?

It must have been the risk profile which triggered it.

Lets say one has an income of 150k a year and has outstanding debt of 38k and normal utilizations on the cards (approx 50% across the board), and have paid off large balances (25k+) in full then your risk profile would be fine.

On the other hand, if you have 50% of your income in CC debt, and/or large utilizations and low paybacks (you've never paid off balances in full before) then you would be looked at as a risk.

You said they said they noticed you haven't used the card in awhile. Did you have the BT transfer on it the entire time?

fdicenforcer said:
What is your income to utilization ratio as well as CLs on other cards and do you have large paybacks in full?

It must have been the risk profile which triggered it.

Lets say one has an income of 150k a year and has outstanding debt of 38k and normal utilizations on the cards (approx 50% across the board), and have paid off large balances (25k+) in full then your risk profile would be fine.

On the other hand, if you have 50% of your income in CC debt, and/or large utilizations and low paybacks (you've never paid off balances in full before) then you would be looked at as a risk.

Good question.

Going back to August, here were a samples of my CL:

AMEX: 17K
MBNA: 17K
ATT: 20K
Chase: 23K
Discover: 16K
(and a few other accounts with minor credit lines)

As of August, the CC debt-to-income was about 45%, and the total utilization was about 35%. I have paid off large balances in the past, but not on this HSBC account (yet, as I was still in promotional period).

This may or may not have been a risk profile factor. As I said, the CSR alluded to "behavior of the account."

I made two BT from the beginning, and have been paying monthly since.

fdicenforcer said: 45% is quite high......... Red flag right there. Total utilization of 35% is fine though.Oh please. Unless you're qualified HSBC account rep - then let's not post info that is not factual. As long as he's not exceeding 50% overall util then there is pretty much no factual evidence that I have seen posted here at FW btw adverse creditor reactions to 35% or 45% overall util. Let's not get too excited here.

I also have HSBC card with a 0% BT - it is a Cash Back Platinum card that I got during my AOR in May straight from HSBC's website. $5k CL, $4.75k BT, paid down to $2.45k in the first month - since then I've been making monthly payments of $25. My overall total util was/is howering around 49% with a month or so when it actually exceeded 50%. No adverse reactions from any creditors (besides one chase card closed for 2yr inactivity).

OP - you'd do best if you follow the instructions on proper filing of a billing dispute and make sure that you have the paperwork that outlines the introductory terms. As has been stated a number of times - while creditors might get nervous and raise regular account rates - they do not touch the intro rates unless universal default comes into effect - and that's when creditors from multiple companies start raising hell.

If you're 100% positive that nothing negative shows on your credit report (and since they claim that they changed the terms in August, then whatever triggered their reaction must have occurred at that time) - then taking steps for properly filing a dispute with all the paperwork to cover your bases should be enough to get the ball moving.

swraith said: I also received my finance charge credit over the weekend. However I already went ahead and paid off the BT so I will just let this card sit idle now.

Me too. I don't want to use this card any more.

Any one tried to get the Credit Balance Refund from HSBC? How soon would the check be mailed? (I didn't find the option online.)

TIA.