Change of Terms

Dear Bank who holds my MasterCard account,
20 years ago you loaned me money at a 12% interest rate. This allowed me to quickly furnish a new apartment. For that, I thank you.

I understand that our agreement allowed you (the lender) to change the terms of the agreement for me (the debtor). It was my understanding that this was an option for you to enact if you needed to based on market forces, bank interest rates, or the risk involved in my debt. I did not know that this would be used primarily as a method to enhance your revenue stream, and was totally disconnected from market forces or my ability to pay you.

I came to you with no credit history beyond a student loan. I had no savings, and a job less than 6 months old. You gave me a rate of 12%. Although I may have been a few days late a couple of times in the last 20 years I never missed a payment.

Over the last 20 years I have:

  • Been continually employed, in one case for 13 years at the same company.
  • Purchased a house.
  • Built up savings.
  • Increased my salary to 3 times what it was when I originally borrowed money from you.

In every measurable respect, my ability to repay you has grown substantially since I borrowed money from you.

In that same time, your conditions have changed as well:

  • You saw your interest rate drop to essentially 0%.
  • You stayed in business with the help of my tax dollars.
  • You also went through several mergers, becoming much larger, which you claimed would allow you to provide me better service at a more competitive rate.

It would seem that since our agreement began, the cost of my debt has gone down for you while my ability to pay has gone up. Given these conditions, I find it troubling that every time I got a raise or was somehow able to increase the amount of my monthly payments, you raised my interest rate or changed my agreement and added new fees. As I made progress on repaying that loan, you took money that I borrowed at 12% and eventually raised the interest rate on it to over 22%. Although I have not borrowed any more money from you in well over 10 years, you have been receiving monthly payments from me that included finance charges of almost double what the terms were when you originally gave me the money.

You will notice on my account that I have repaid it in full. Actually, I paid about $50 too much, so you now owe me $50. This changes the basic nature of our relationship. As you are now the debtor and I am the lender, I am making the following changes to our agreement:

  • Your interest rate is now 24,000%. This will result in a minimum monthly payment of $1000, and that will just cover the interest.
  • Any month that ends with you still having a balance will result in a $50 service charge.
  • Any payment sent to me will be subject to a $50 processing fee.
  • Any payment that is late or below the minimum will result in a $100 penalty. This is in addition to the $50 charge for maintaining a balance.
  • Any overpayment to me will be subject to a service charge equal to the amount of overpayment, and will be considered an immediate termination of our financial relationship.

As our agreement states that the leader can change the terms without reason and without consent of the debtor, I am within my rights to do this. I’ll go one step further and spell out the consequences of this to you, which you only recently started to do as a result of federal law:
Based on today’s balance, you can settle your account by getting a payment of $1050 to me by the end of the month ($1000 finance charge + $50 processing fee).
If you make the minimum monthly payment of $1000 every month you will bee making that payment forever since that payment only covers the interest and not my $50 processing fee.
To help you, I will inform you that if you miss your first payment, your balance will go from $50 to $1200 ($50 principal + monthly rate of 24,000% finance charge + $100 penalty + $50 balance maintenance fee). If you miss a second consecutive payment, your balance will be $1,201,350. If you miss a third payment you will be bankrupt, but due to the favorable laws you got passed through congress you will not be able to write off your debt to me and will instead have to liquidate the company.

Thank you for doing business with me!

p.s. Stop sending me crap in the mail about the great offers that you have for me and how willing you are to help me.

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