Legal Question in Credit and Debt Law in Texas

Outrageous CC APR

I recently received a notice from a credit card provider named Providian regarding an account I have with them.

The account is several years old and is current. Never late or over-limit.

Credit reports from all three bureaus - dated 8/14/2002 - bear out my payment history. The account is ''paid as agreed''(or words to that effect) form all three bureaus. Providian has informed me that they are - among other things - raising the APR on all purchases and balances on this card to Prime Rate plus 24.24%. From their letter... ''Using this formula, the APR for the billing cycle beginning in September 2002 would be 28.99%.

My options are to pay this outrageous rate or cancel the account and keep my current terms. Is it just me, or is this simply a case of thinly veiled financial blackmail???

I realize that my options are probably slim and none. Do I have no recourse???

Is this rate even allowed in the state of Texas?


Asked on 10/07/02, 8:04 pm

1 Answer from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Outrageous CC APR

National lending institutions do not really have usury caps in Texas. While that rate is outrageous, it's not illegal. Pay them off, dump them, and go with another lender. Some credit cards are being offered at 1.9% APR for advances to pay off other credit cards.

There's no legal impediment to closing out an account that charges excessive interest; you simply have to pay them in full, then run their card through a shredder!

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Answered on 10/08/02, 9:55 am


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