I have had an account with 1st financial bank usa since I was in high school. When I opened the account the APR agreement was that all transactions under $250, excluding balance transfers, would have 0% interest for the like of the transaction. All transactions above $250 had an 8.99% interest rate.

In December of 2009 I lost my credit card in a store, so I cancelled it and had a new credit card issued. When I received the new card and statement in January I checked to make sure no fraudulent purchases had been made. It was then that I noticed 1st financial bank started charging me 25.99% interest. I never looked at my statements because I have never had a problem, but I save them all so I went back and checked my other statements. They had started charging me interest in November.

I called the credit card company and they said that in accordance with federal law they sent me a change of terms agreement regarding interest. I never received this change of terms from them. I received one from my chase card which I closed because the interest rate was increasing. I received one from my Discover card where the interest was decreasing so I kept it open. I never received one from my Citi card and nothing changed. I never received one from 1st financial bank usa. I spoke with several managers and eventually closed the account because they would not reverse the unauthorized changes.

I submitted a complaint to the better business bureau demanding a reinstatement of the original terms and the companies response was that they have records that they sent me a copy of the change of terms to my current address in August of 2009. I did not move into my current address until November 2nd of 2009. When I sent a response to the better business bureau that 1st financial bank has no legal proof that I was notified of the changes and that I was not living at the address they claimed to send me the change of terms, 1st financial bank usa just stuck by what they original said.

I have been charged almost $400 in interest charges since last novemeber. I will never be able to pay this off with my income. Honestly, How could anyone actual believe that I would opt to pay 25% instead of 0%. The majority of my transactions for the last 8 years have been under $250 because I am on a limited income and it is the same as paying cash.

What do I do? This is not fair. I do not owe them the interest charges.

Credit card companies are all changing the terms, esp in the last year or two. And with notice, are not required to get your permission to change interest rates. And in some cases don't even require notice if you were late with payments or if when checking your credit ( they do this ever so often) they find you a higher credit risk than you were before.
Most people are finding their credit lines lowered with no notice also. Often causes over charges at times.

They basically have you, since if you don't pay it, they will merely keep adding late charges, and more fees. Making it worst.

At best, you pay it, and then sue them claiming they had no legal right to change the interest.

Fr_Chuck is right credit card companies are changing the terms. Also worth saying CHECK YOUR STATEMENTS WHEN THEY COME. You can't assume anything. You have to be on your game plan. Just a thought if you had looked at your statements when they came some of this could have been avoided.

Yes, and in many cases, the change in terms is in the fine print of the various back pages.

Also after that, starting a month or two ago, credit card companies were required to show the information more visible and in easier to understand wording.

Yeah, but when I called the credit card company in December, they told me I had until October 31 of 2009 to close the account to reject the changes. Had I been sent the change of terms in August of 2009 I certainly would have closed the account. P.S. I have not defaulted on the payments ever. I am still paying them but the balance will never go anywhere

Legally you probably have no grounds. So my advice would be to go to a local consumer advocate. Most newspapers, TV and radio stations have them. Rather then endure the publicity they may make an accommodation for you.