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-   -   Credit Card Wars II: The Bankers Strike Back (http://archive.slickdeals.net/f/1873022-credit-card-wars-ii-the-bankers-strike-back)

thelnel52 02-17-2010 03:39 PM

Credit Card Wars II: The Bankers Strike Back
 
<p style="text-align: center;"><a href="http://slickdeals.net/blog/wp-content/uploads/2010/02/photo_9156_20091028.jpg" title="photo_9156_20091028"><img src="http://slickdeals.net/blog/wp-content/uploads/2010/02/photo_9156_20091028.thumbnail.jpg" alt="photo_9156_20091028" width="500" height="356" class="attachment wp-att-1128 centered" /></a></p>By: Richard Smith (SD User: dittyesq)


<strong>February 17, 2010</strong>

Any credit card user can tell you -- there's a lot that's wrong with this industry. The credit card game often seems to be rigged in the issuers' interests, and designed to suck consumers' wallets dry.

Here at Slickdeals, we've done our best to re-rig the game in consumers' favor. We work together to find the best deal on <a href="http://slickdeals.net/showthread.php?t=1843649">airline miles</a>, grab extra cash when <a href="http://slickdeals.net/forums/showthread.php?t=1801879">Chase is feeling generous</a> -- even <a href="http://slickdeals.net/forums/showthread.php?t=1267821">rob the U.S. Treasury</a> -- legally! But at best, these are half-measures. What we really need, say consumers, is a comprehensive effort to rein in industry worst-practices.

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<strong>To the hill! Charge!</strong>
Fortunately, up on Capitol Hill, your elected representatives have been busy trying to do just this. Upset over industry practices -- late payment fees and over-the-limit charges that dwarf the size of a customer's actual bills, balance transfer rules designed to trick gullible consumers into paying more than they expect, rate hikes on one card triggered by late payment on another (the so-called "universal default"), and a host of other sins -- Congress passed the Credit Accountability Responsibility and Disclosure Act (or "CARD" Act for short) last year. And give 'em some credit for good intentions, at least.

The CARD Act will go a long way towards eliminating some of the industry's least-loved practices. For example:

• "Universal default?" It's history.
• Likewise the imposition of over-the-limit and overdraft "protection" fees without your consent to the "service."
• Also off limits is the trick of offering a low rate for balance transfers, a higher rate for new charges -- then applying all your payments to the low rate debt first (so that the bank can ding you for higher rate debt as long as possible.)
• Fixed-rate cards must now maintain that fixed rate for at least one year after issuance.
• And while after that, a bank is free to raise rates on new debt, it must give you 45 days' prior notice, and the right to opt-out of the new rate (by closing your account.)
• Even then, debt incurred under the old rate can be paid off at the old rate -- no more retroactive rate hikes.

The CARD Act will also curtail credit card predation upon the young -- for better or for worse. From now on, if you're under 21, and not self-supporting, you'll need to have a parent or guardian co-sign when you apply for a card. Gone, too, are the days of companies handing out free gifts on college campuses when the kids apply for credit.


<strong>And yet…</strong>
Love 'em or hate 'em (okay, just hate 'em), banks are businesses. They don't extend credit out of the goodness of their hearts, folks. They're in this business for profit -- and in fact, they're duty-bound to their shareholders to maximize that profit any way they can. Overdraft and over-the-limit fees, and similar charges amounted to $60 billion in revenue for the banking and credit card industries last year, and you can bet your bottom dollar that they won't give up this money without a fight.

Oh, the banks will abide by the new rules of course. It's just … to every rule there is an exception, and every law -- a loophole. If Congress is going to starve the bankers of their over-the-limit fees and late payment charges, then the bankers will just have to find new ways to make a buck. Ways like:

• Annual fees. Remember those? When I was growing up, just about any credit card on offer carried an annual fee for its use. $25 for a MasterCard. $50 for an AmEx. These fees are coming back in a big way.
• Inactivity fees. Don't use each of your cards every month? Well, you'd better get to slickdealing, because this is an easy way for the banks to punish you for carrying too many cards.
• Also, wave bye-bye to "free checking." If banks can't make money in sneakier ways, they're going to have to make it the old fashioned way -- by charging for the actual services they provide. Like allowing you to write checks.
• And speaking of checks, does your bank send you an itemized statement every month, describing what you wrote, to whom, and for how much? Well, get ready to take all that activity online. In fact, a switch to online banking statements is probably the easiest sell of all for the banking industry, because they'll be able to paint it as a "let's all go green together, and save the planet" move. (Of course, if you prefer to receive physical proof of payments, they'll be happy to abandon those principles and charge you a couple extra bucks a month.)


<strong>The rules, they are a-changin'</strong>
Already, slickdealers are feeling the brunt of the changes as the nation's big credit card banks<a href="http://slickdeals.net/forums/showthread.php?t=1837237"> raise rates</a> ahead of the legislation's entry into force (on February 22).

As time goes on, it's only going to get worse. Some banks will switch from fixed-rate credit cards to variable rates (because in a startling omission, the CARD Act) only restricts an issuer's ability to raise rates on fixed-rate cards. Others will attempt to limit their risk of loss by lowering credit limits, which may (as a totally unintentional side-effect, I am sure) make it more likely you go over your limit, and get hit with a fee.

In short, the rules are changing -- not just for our bankers, but for Slickdealers ourselves.




<em>International lawyer by day and Slickdealer by night, Rich Smith is always on the lookout for a good bargain. Helping corporations pillage Third World economies is great for paying the mortgage, but Rich's real loves are writing about stock investing for The Motley Fool, buying cheap stocks for his own portfolio, and strolling the aisles at Slickdeals in search of the ultimate blue-light special. A veteran of Moscow, Kiev, and Washington, D.C., Rich has traded-in city life, and now takes his ease in the fields of rural Indiana.</em>




Thank you to Michelle Meiklejohn for the image above. <p><a href="http://www.freedigitalphotos.net/images/view_photog.php?photogid=901">Image: Michelle Meiklejohn / FreeDigitalPhotos.net</a></p>



<strong>Note to readers-</strong>
We would like this thread to be a place for you to post changes to your cards as you notice them, and possible suggestions for alternatives. This is NOT the place for discussions regarding the IQ of politicians, the integrity of banks, or anything else.



thelnel52 02-17-2010 03:48 PM

This may interest some readers: On February 22nd, Creditcards.com is having a town hall meeting, where White House economic adviser Austan Goolsbee will answer questions live via a video stream.

http://www.creditcards.com/live-m...ite-house/

caveman017 02-17-2010 04:19 PM

I refuse to pay for any checking account.

I'm sorry, the bank gets to hold my money interest free in my checking account. They aren't taking more money away from me as well.

brendo927 02-17-2010 04:21 PM

Also two other very important points

--Payments received by the due date -- or the next business day, if the bank doesn't accept mailed payments on the due date -- won't trigger a late fee. If the cardholder pays at a local branch, the payment must be credited the same day.

--Card companies must send statements 21 days before a payment is due. Current law requires a mere 14 days' notice. This provision goes into effect Aug. 20, 2009.

Danzilla 02-17-2010 04:48 PM

It's not just credit cards. My 67 year old aunt recently withdrew $100 from her account. She didn't notice any warning or disclaimers, but then she does miss a lot. A couple weeks later she received a notice of a $39 fee because the bank GENEROUSLY gave her "over draft" protection on her ATM card. I mean seriously, WTF! I can understand over draft on a payment made to someone else, even if the fees are outrageous, but claiming that as an excuse for extreme usury on what was meant just for walking around cash in her pocketbook???
I think we need to round up the bankers and shoot them... right after all the lawyers! (sorry Rich) ;)

Thunderpants 02-17-2010 05:32 PM

If my bank decided to start charging me these stupid fees then they won't be having my money in their bank. Plain and simple. I'll buy my own damn fault if I have to.

Bdubslawman 02-17-2010 05:48 PM

Regarding banks. Here is a link for information about moving your money to local banks from (national chains). You can find local banks receiving a high financial rating (not user rating).
There is a note that MANY of the Local Credit Unions are not on the list b/c they use a different rating system (something to that effect - been a few weeks since I read it).
http://moveyourmoney.info/
Move your money to the local banks that didn't buy into ultra risky predatory loans or ( the bundles they were lumped into) and sold with AAA ratings.

dittyesq 02-17-2010 06:25 PM

I've found Bankrate.com to be a really useful website for all things card-and-bank-and-mortgage-related: http://www.bankrate.com/credit-cards.aspx

If you're not familiar with it yet, this one's worth getting to know.

--dittyesq

thelnel52 02-17-2010 06:36 PM

Bankrate is a good site to get a feel for the credit card landscape, but (shameless self promo here) check out our CC thread, too. A lot of our favorite cards (AMEX Plum, Penfed Visa, Schwab 2%) don't show up on lists like that.

dittyesq 02-17-2010 07:17 PM

Quote:

Originally Posted by Danzilla (Post 27591882)
round up the bankers and shoot them... right after all the lawyers! (sorry Rich) ;)

No offense taken, Danzilla. In fact, I sympathize with the sentiment.

That said, without the bankers, who would finance our purchase of that slick new Toyota Prius? And without the lawyers, who would make sure the gas pedal didn't come pre-super glued? Bankers and lawyers both have their uses. We just need to keep 'em both honest.

Speaking of which, in future columns we'll be discussing more ways to make better use of banks and credit cards, how to find a good lawyer, and a whole host of other helpful hints. Stay tuned!

--Rich (dittyesq)

compuguy1088 02-17-2010 09:38 PM

Quote:

Originally Posted by Bdubslawman (Post 27593196)
Regarding banks. Here is a link for information about moving your money to local banks from (national chains). You can find local banks receiving a high financial rating (not user rating).
There is a note that MANY of the Local Credit Unions are not on the list b/c they use a different rating system (something to that effect - been a few weeks since I read it).
http://moveyourmoney.info/
Move your money to the local banks that didn't buy into ultra risky predatory loans or ( the bundles they were lumped into) and sold with AAA ratings.

My money is already in a "community bank".....Union bank & trust of VA. They seem to be doing quite well, because they are changing their name again after merging/acquiring another small community bank.

Hit in the Head 02-18-2010 05:52 AM

Quote:

Originally Posted by compuguy1088 (Post 27598026)
My money is already in a "community bank".....Union bank & trust of VA. They seem to be doing quite well, because they are changing their name again after merging/acquiring another small community bank.

Awesome for you... probably bad for the folks coming over... I bet that bank that was acquired was giving some amazing deals (hence the reason they were bought ;) )

Quote:

Originally Posted by thelnel52 (Post 27594330)
Bankrate is a good site to get a feel for the credit card landscape, but (shameless self promo here) check out our CC thread, too. A lot of our favorite cards (AMEX Plum, Penfed Visa, Schwab 2%) don't show up on lists like that.

Thanks for the shortcut to this thread...

Just another reason that this site is awesome.

UD777 02-18-2010 06:00 AM

One thing that gets glossed over a lot about overdraft fees is that if you decide to opt out (you'll be able to later this year) you're going to end up getting charged by the merchant rather than the bank. And I believe the bank is still going to charge a returned item fee.

Remember those old posters in convenience stores with the pictures of all the people that wrote bad checks?

compuguy1088 02-18-2010 06:24 AM

Quote:

Originally Posted by Hit in the Head (Post 27602330)
Awesome for you... probably bad for the folks coming over... I bet that bank that was acquired was giving some amazing deals (hence the reason they were bought ;) )



Thanks for the shortcut to this thread...

Just another reason that this site is awesome.


I've actually with the bank that is merging with another bank....they bought out my smaller community bank years ago....:).

xmed 02-18-2010 06:25 AM

Quote:

Originally Posted by Hit in the Head (Post 27602330)
Awesome for you... probably bad for the folks coming over... I bet that bank that was acquired was giving some amazing deals (hence the reason they were bought ;) ) .

You may be right. I'm in the "coming over" (merged) bank, which is First Market. Most or all of their branches are located inside the stores of a high-quality local grocery chain.

First Market is big on free counter services and quarterly perks - coupons for free baked goods, deli items, etc., goodies worth $10-15 a pop. I expect all those freebies to go away when they merge with Union. :(

Hailth 02-18-2010 08:32 AM

If everything said is true about credit practices changing, I wish things would go back to the way they were... Of course people who are too careless with their own finances don't deserve to be ripped off just because they're easy marks, but if protecting them from their own mistakes means everyone who actually cares and maintains healthy accounts will start getting screwed over too, then things need to go back to how they were.

Why have everyone be ripped off together? That's no better than before... at least before I never had to pay a bank or a credit card company to use my money, or even their money.

jackmcdowell 02-18-2010 09:19 AM

Also there is a fixed deadline on statements due and if the day fall on a sat/sun it moves over to the next monday, not the friday like some banks were doing. I've had some statement dates mysteriously inch forward and unless you actually read the statement it's easy to miss. By this I mean, simply knowing how much money you've spent and when you need to make a payment was no longer enough...

ElGato01 02-18-2010 09:36 AM

I've been credit card free for over 2 years now and don't miss it for a second. I pay cash in most cases and when possible PayPal/Google. If those are not an option my Debit Card used as a Debit not a Credit card is my last resort.

redmaxx 02-18-2010 10:17 AM

Quote:

Originally Posted by UD777 (Post 27602462)
One thing that gets glossed over a lot about overdraft fees is that if you decide to opt out (you'll be able to later this year) you're going to end up getting charged by the merchant rather than the bank. And I believe the bank is still going to charge a returned item fee.

Remember those old posters in convenience stores with the pictures of all the people that wrote bad checks?

Not necessarily. If you bank with a company like Wachovia, it's easy to purchase more than you have because Wachovia reorders transactions without telling you and they provide overdraft for ATM and debit transactions. So by turning off overdraft, Wachovia would no longer allow ATM withdrawals and debit transactions that exceed your true available balance.

Flinstones 02-18-2010 11:36 AM

I use one credit card for everything, and make money off of it. I put over 1k/month on it (usually), and get 1-2% back. It gives me 200-300 a year extra. I don't pay fees, don't care what the APR is. I think once, about 5 years ago, I missed a payment by accident. I got the fees and interest removed. Now, I'm on auto-pay in full.

redmaxx 02-18-2010 11:52 AM

Quote:

Originally Posted by Flinstones (Post 27613504)
I use one credit card for everything, and make money off of it. I put over 1k/month on it (usually), and get 1-2% back. It gives me 200-300 a year extra. I don't pay fees, don't care what the APR is. I think once, about 5 years ago, I missed a payment by accident. I got the fees and interest removed. Now, I'm on auto-pay in full.

It's doubtful that you're making money off of it, since retailers price in the cost of you using the credit card into the cost of their goods.

Flinstones 02-18-2010 11:54 AM

Quote:

Originally Posted by redmaxx (Post 27614078)
It's doubtful that you're making money off of it, since retailers price in the cost of you using the credit card into the cost of their goods.

I'm making money because those that pay cash are paying for me to use credit as well. Unless I get a discount, or have to pay more to the merchant to use credit, I'm "making" money

thelnel52 02-18-2010 12:11 PM

Redmaxx, you're right that merchants might change prices in response to cc fees, but very few (some gas stations/convenience stores, other than that I can't think of anyone) actually charge people more for using credit cards.

frank1nyc 02-18-2010 12:22 PM

Quote:

Originally Posted by thelnel52 (Post 27614808)
Redmaxx, you're right that merchants might change prices in response to cc fees, but very few (some gas stations/convenience stores, other than that I can't think of anyone) actually charge people more for using credit cards.

I believe the merchant's contract prohibits charging more for CC use. They can however provide a discount for cash.

redmaxx 02-18-2010 12:33 PM

Quote:

Originally Posted by Flinstones (Post 27614152)
I'm making money because those that pay cash are paying for me to use credit as well. Unless I get a discount, or have to pay more to the merchant to use credit, I'm "making" money

Quote:

Originally Posted by thelnel52 (Post 27614808)
Redmaxx, you're right that merchants might change prices in response to cc fees, but very few (some gas stations/convenience stores, other than that I can't think of anyone) actually charge people more for using credit cards.

I'm referring to the fact that prices themselves are higher. You're only getting back a portion of the cost of using a credit card, so in effect, you're not making money, you're losing money by using the card. Unfortunately, because you don't get a discount if you use cash, the CC rewards offset some of the higher price of the convenience of using a card. But in no way are you "making" money. :)

thelnel52 02-18-2010 12:45 PM

Quote:

Originally Posted by redmaxx (Post 27615648)
I'm referring to the fact that prices themselves are higher. You're only getting back a portion of the cost of using a credit card, so in effect, you're not making money, you're losing money by using the card. Unfortunately, because you don't get a discount if you use cash, the CC rewards offset some of the higher price of the convenience of using a card. But in no way are you "making" money. :)

I guess the question is if "not losing as much" = "making", and I can go either way with that. However, if you look at it from an individual point of view, where you're not big enough to influence prices and can either cost the store 2-4% in fees (while getting back 1-2%) or cost the store nothing and get back nothing, the better solution is to use the CC and get something back.

Flinstones 02-18-2010 01:02 PM

Quote:

Originally Posted by thelnel52 (Post 27616166)
I guess the question is if "not losing as much" = "making", and I can go either way with that. However, if you look at it from an individual point of view, where you're not big enough to influence prices and can either cost the store 2-4% in fees (while getting back 1-2%) or cost the store nothing and get back nothing, the better solution is to use the CC and get something back.

Agreed. When you pay less for something, you're not losing as much. When I say "making" money, I consider it as such because I don't get it back at that time, but instead I request a check.

One can argue that people who use credit cards are only making prices go higher. However, credit card companies give you a reason to use them, which makes it a disadvantage to use cash (if you pay in full on time, and don't overdraft). The cost of goods tomorrow won't rise because we use credit. If we all took a stand to use cash, we might eventually see prices decrease. However, merchants are reluctant to lower prices, and will likely just take that profit and run.

Superocean 02-18-2010 01:15 PM

Great discussion here. I'm glad we now have a place to discuss money, finance and related things here on SD.

I'm still lazy and have money in big banks but plan to move it soon.

sukru 02-18-2010 01:18 PM

I had little problem with my bank so far (Bank of America), they deposited checks immediately, and actually reordered transactions due to my benefit.

Even on an occasion which required an overdraft (I paid my CC using the wrong - empty - checking account) they did the same thing. I saw -100 balance (pending), and made a transfer between my checking accounts. Balance became positive immediately, and no fees applied.

kframe19 02-18-2010 01:43 PM

Credit unions!
 
The way I get around bank shenanigans is to not use banks for transactional accounts.

Navy Federal Credit Union and the Pennsylvania State Employee's Credit Union have my financial business.

I have a savings account with Ally, and I do have a rewards credit card with Amazon (chase), but other than that, I don't deal with banks, and I will never deal with banks.

I fought with Bank of America for nearly a year. They conveniently kept 'losing' (THREE times I sent the information!) my Father's (he had a credit card with life protection insurance with them) information so that they could finally claim that I didn't make a claim in time and that his estate was liable for the balance.

I was getting ready to hire an attorney when, out of the blue, after they sent me TWO benefit refusal letters in the same week, the claim was paid. Included in the pay off notification? A "hi, we'd love to be your full service bank, how can we help you!?"

Well, you can help me by going straight to hell and never contacting me again.

DeltaMajor156 02-18-2010 01:49 PM

Quote:

Originally Posted by caveman017 (Post 27591268)
I refuse to pay for any checking account.

I'm sorry, the bank gets to hold my money interest free in my checking account. They aren't taking more money away from me as well.


ditto, and the same for credit cards. if they all have fees I will have no credit cards and will have cash under my mattress

Credit Card Wars III: The Customers Strike Back

dittyesq 02-18-2010 03:00 PM

Quote:

Originally Posted by Flinstones (Post 27613504)
I think once, about 5 years ago, I missed a payment by accident. I got the fees and interest removed.

Excellent point, Flinstones, and a great example of the "it never hurts to ask" rule. As recently as last week, I caught a late payment charge on one of our CC bills. Called up Chase, asked them if we could make this go away, and "POOF!" it was gone.

FWIW, Chase states that their policy is if you have not had a late payment in the past six months, they will waive a late fee if asked. Also worth noting: A payment must be 60 days overdue before they report it to the credit card bureaus and damage your credit rating.

--Rich (dittyesq)

dittyesq 02-18-2010 03:03 PM

Quote:

Originally Posted by khorne55 (Post 27618388)
...credit cards. if they all have fees I will have no credit cards and will have cash under my mattress

Credit Card Wars III: The Customers Strike Back

That's gonna make it awful hard to take advantage of slickdeals on Amazon, khorne55. ;)

You've got to play to win (the good deals). Our job is to figure out the new rules of the credit card game, and tilt them in our favor.

--Rich (dittyesq)

brendo927 02-18-2010 04:52 PM

Quote:

Originally Posted by dittyesq (Post 27620508)
FWIW, Chase states that their policy is if you have not had a late payment in the past six months, they will waive a late fee if asked. Also worth noting: A payment must be 60 days overdue before they report it to the credit card bureaus and damage your credit rating.

--Rich (dittyesq)

30 days not 60

kharvel 02-18-2010 04:55 PM

Does anyone believe that the CARD Act and any credit card legislation is BAD for Slickdealers?

Let's face it - most SDers pay off their credit card every month and so those who are not frugal or money-savvy are basically subsidizing the credit card usage of SDers (in terms of no annual fees, generous rewards, high credit limits, etc.). With the CARD Act and other credit card legislation, all those benefits are going away and SDers will now pay dearly for the regulation.

thelnel52 02-18-2010 04:57 PM

Quote:

Originally Posted by kharvel (Post 27623608)
Does anyone believe that the CARD Act and any credit card legislation is BAD for Slickdealers?

Let's face it - most SDers pay off their credit card every month and so those who are not frugal or money-savvy are basically subsidizing the credit card usage of SDers. With the CARD Act and other credit card legislation, all those benefits are going away and SDers will now pay dearly for the regulation.

I'm not sure if "most" SDers pay off their cards in full every month, but you are right that this will end up costing those who were previously able to take advantage. The way I see it, it's kind of like there were mousetraps everywhere, loaded with cheese. The more nimble people were able to jump from trap to trap, eating cheese, and avoiding trouble. The government is stepping in and saying that traps are illegal, so the banks are going to stop putting out as much cheese. That's great for those who got caught in the traps, but bad for those who were enjoying the free food.

nanners1955 02-19-2010 03:58 AM

DH and I had alot of CC debt and got it all paid off except the last 10k. We were never late and always paid more than the minimum. ATT had us at 4.99 for years then raised us to 14.99 and then 18.99 in October and then December. Discover sent us an offer for a loan at 9.99 fixed with no security. We took it and will get it paid off hopefully in a year

Peaknic 02-19-2010 06:55 AM

"Others will attempt to limit their risk of loss by lowering credit limits, which may (as a totally unintentional side-effect, I am sure) make it more likely you go over your limit, and get hit with a fee."

Not only that, but if you are carrying balances, it is likely that your credit score will take a hit because that is based on your average balance versus your credit limit. I found this out the hard way last year after getting a "0% for one year" deal and using more than 50% of the limit to make investments in precious metals. Made out like a bandit (>35% return in 11 months!), but my credit score dropped by 80 points.

Another thing that has been really buggin me lately are all of the "0% interest" balance transfer "deals" that only say in the fine print that they will be charging a 3%-5% "transfer fee". Sorry, but that is not 0% in my book!

dittyesq 02-19-2010 07:21 AM

Update: New CC Tricks
 
DailyFinance.com is reporting a couple new revenue-raisers that the credit card companies have added to their bag of tricks:

1. Interest rate rebates: Offer a card at a high interest rate (say, 20%). Offer a discount for on-time payment (say 10 percentage points). If you're diligent and pay on time, bully for you. But apparently lots of people are not so diligent -- and having signed on in expectation of a 10% interest rate, will actually wind up paying 20%.

2. Up-only variable rate cards: So Congress has made it hard to raise rates on fixed-rate cards, right? Okay, we already know the CC companies will be converting cards to variable rates to exploit that loophole. New twist -- the terms on the variable-rate cards can be set so that card rates increase when interest rates-in-general rise, but do not fall when interest rates-in-general fall. Heads, lenders win. Tails, borrowers lose.

"Let's be careful out there."

--Rich (dittyesq)

pelochas 02-19-2010 08:52 AM

I have Over Draft Protection on my Chase Checking account, its $10 fee plus the charges to another Chase Credit Card for the entire day of overdrafting i do.

Yesterday i got in the mail, that i must call to renew the over draft protection and now its $35 for each overdraft? WTF

Flinstones 02-19-2010 09:07 AM

Quote:

Originally Posted by pelochas (Post 27639272)
I have Over Draft Protection on my Chase Checking account, its $10 fee plus the charges to another Chase Credit Card for the entire day of overdrafting i do.

Yesterday i got in the mail, that i must call to renew the over draft protection and now its $35 for each overdraft? WTF

WTF? Don't buy stuff you can't afford ;)

Flinstones 02-19-2010 09:13 AM

In all seriousness though, I have monitors through my back that I set up that will tell me if my checking balance is too high, or too low. I want a cushion in there, but don't want all of my money in there. An email reminder tells me to log in and manually transfer money.

thelnel52 02-19-2010 10:19 AM

Quote:

Originally Posted by Peaknic (Post 27636014)
Another thing that has been really buggin me lately are all of the "0% interest" balance transfer "deals" that only say in the fine print that they will be charging a 3%-5% "transfer fee". Sorry, but that is not 0% in my book!

You're right- if you're going to do a balance transfer, you should look first for either no fee or a fee capped at $75 or $100. In some cases (where someone is paying more than 6 or 7% and can still qualify for credit with a new card), it is worthwhile to transfer even with a fee to pay a balance down.

pelochas 02-19-2010 10:24 AM

Quote:

Originally Posted by Flinstones (Post 27639746)
WTF? Don't buy stuff you can't afford ;)

I did not want to buy it but God made my son have a emergency hospital visit for three days so what could i do when every dollar is already accounted for and even the emergency fund isnt enough. sorry but stuff happens

TheDuck23 02-19-2010 10:28 AM

Quote:

Originally Posted by thelnel52 (Post 27623642)
I'm not sure if "most" SDers pay off their cards in full every month, but you are right that this will end up costing those who were previously able to take advantage. The way I see it, it's kind of like there were mousetraps everywhere, loaded with cheese. The more nimble people were able to jump from trap to trap, eating cheese, and avoiding trouble. The government is stepping in and saying that traps are illegal, so the banks are going to stop putting out as much cheese. That's great for those who got caught in the traps, but bad for those who were enjoying the free food.

Thank you! I was actually really irritated after reading this article. None of the issues addressed in this legislation affect the savvy spender. Never in my life have I had an overdraft or late-payment fee. I'm sorry, pay your shit on time and don't spend more than you can afford! It's not that hard. Credit cards have become a kind of necessity with your credit score affecting so many things. One last thing to end my rant; Stores incorporate credit card fees into their prices, so when i pay with cash I am paying undue fees and therefore paying more than I do with a credit card that actually utilizes those fees. When stores start giving discounts for paying with cash, then I will pay with cash. Untill then I will pay with my credit card that I am getting charged for anyway, and get my miniscule rewards.

redmaxx 02-19-2010 10:38 AM

Quote:

Originally Posted by TheDuck23 (Post 27642260)
Thank you! I was actually really irritated after reading this article. None of the issues addressed in this legislation affect the savvy spender. Never in my life have I had an overdraft or late-payment fee. I'm sorry, pay your shit on time and don't spend more than you can afford! It's not that hard. Credit cards have become a kind of necessity with your credit score affecting so many things. One last thing to end my rant; Stores incorporate credit card fees into their prices, so when i pay with cash I am paying undue fees and therefore paying more than I do with a credit card that actually utilizes those fees. When stores start giving discounts for paying with cash, then I will pay with cash. Untill then I will pay with my credit card that I am getting charged for anyway, and get my miniscule rewards.

:nono1: Universal default will hurt the "savvy" spender. I have a collection item on my credit report from the thieves at Capital One that I don't even owe. With universal default, every debt that I keep on time and current would be treated as if it was in default. That's just one example. It's foolish to say that because you haven't been abused by a credit card company, no one else has. :ranting:

brendo927 02-19-2010 11:01 AM

Universal default is gone with the new credit card act

redmaxx 02-19-2010 11:42 AM

Quote:

Originally Posted by brendo927 (Post 27643268)
Universal default is gone with the new credit card act

Correct, which is why TheDuck's rant is ridiculous.

InteGri 02-19-2010 01:05 PM

Quote:

Originally Posted by thelnel52 (Post 27623642)
I'm not sure if "most" SDers pay off their cards in full every month, but you are right that this will end up costing those who were previously able to take advantage. The way I see it, it's kind of like there were mousetraps everywhere, loaded with cheese. The more nimble people were able to jump from trap to trap, eating cheese, and avoiding trouble. The government is stepping in and saying that traps are illegal, so the banks are going to stop putting out as much cheese. That's great for those who got caught in the traps, but bad for those who were enjoying the free food.

I think that is an awesome analogy.

TheDuck23 02-19-2010 01:17 PM

Quote:

Originally Posted by redmaxx (Post 27642532)
:nono1: Universal default will hurt the "savvy" spender. I have a collection item on my credit report from the thieves at Capital One that I don't even owe. With universal default, every debt that I keep on time and current would be treated as if it was in default. That's just one example. It's foolish to say that because you haven't been abused by a credit card company, no one else has. :ranting:

Granted the "no more universal default" is a good thing. And don't get me wrong, I think the game that banks and credit card companies play is obscene. I have had my share of issues with them. Mainly, I think its funny thay they have already been mentioned, Capital One and Wachovia. I rembersed for the bogus bank fees from Wachovia in a settlement, and I am waiting on a response from the FTS on my Capital One issue. BUT, I think that the limitations on overlimit, and late payment fees will infact hurt those who aren't late or go overlimit. I believe this was stated above; You cannot expect companies to cut some of their income and not try to make money in other ways. With the penalties gone, companies are going to raise rates and add-on new maintenance fees, like the annual fee. I think late penalties and overdraft fees make sense. If you forget to pay your bill then thats a fee, if you misscalculate your balance, thats a fee. Charging for extra work makes sense.

redmaxx 02-19-2010 02:49 PM

I can expect companies to make their income in honest ways. Telling someone, "here's your limit" and then filling up most or all of that with fees right off the bat and then letting them go "over limit" (what the heck is a limit for then anyway?) is just wrong. Companies did not used to make their income in such dishonest ways. I don't think it's fair for customers paying these dishonest fees and schemes to carry the responsible borrowers on their backs. If companies can't make money without charging a fee for their product to everyone, then so be it. Make the money above board without scamming poor people.

TheDuck23 02-19-2010 03:05 PM

Quote:

Originally Posted by redmaxx (Post 27649968)
I can expect companies to make their income in honest ways. Telling someone, "here's your limit" and then filling up most or all of that with fees right off the bat and then letting them go "over limit" (what the heck is a limit for then anyway?) is just wrong. Companies did not used to make their income in such dishonest ways. I don't think it's fair for customers paying these dishonest fees and schemes to carry the responsible borrowers on their backs. If companies can't make money without charging a fee for their product to everyone, then so be it. Make the money above board without scamming poor people.

How is charging someone for being late or spending too much a scam? It sucks I know, but it's not a scam. It's like parking tickets; Annoying as hell, and I curse the city everytime I get one, total bullshit. But, in the end it was my fault for letting the meter expire or forgetting to move my car for streetsweeping. Late and overlimit fees suck, but it's your fault if you forget. I don't know, there are some things in this legislation that are definitely good, but I disagree others.

redmaxx 02-19-2010 03:30 PM

Quote:

Originally Posted by TheDuck23 (Post 27650352)
How is charging someone for being late or spending too much a scam? It sucks I know, but it's not a scam. It's like parking tickets; Annoying as hell, and I curse the city everytime I get one, total bullshit. But, in the end it was my fault for letting the meter expire or forgetting to move my car for streetsweeping. Late and overlimit fees suck, but it's your fault if you forget. I don't know, there are some things in this legislation that are definitely good, but I disagree others.

Could you clarify exactly which provisions you have a problem with? In regards to Late and Overlimit fees, here's the provisions, according to Wikipedia [wikipedia.org]:

Due dates:
  • Gives cardholders time to pay their bills by requiring card companies to mail billing statements 21 calendar days before the due date (14 days is the current minimum).
  • Requires that payments made before 5 p.m. EST on the due date are considered timely.
  • Requires the due date to fall on the same day each month. If the fixed due date normally falls on a Saturday, Sunday or legal banking holiday, then the due date shall be pushed back to the next business day after the date. This measure prohibits due dates to fall on a weekend or holiday.
  • Directs card companies to provide on every statement, a phone and internet address that a cardholder can access for payoff balances.
  • Prohibits card companies from charging late fees when a cardholder presents proof of mailing payment not less than 7 days before the due date.

Over limit:
  • Requires card companies to offer consumers the option of having a fixed credit limit that cannot be exceeded.
  • Prevents card companies from charging over-the-limit fees on a cardholder with a fixed credit limit.
  • Limits the amount of "over-the-limit" fees card companies are allowed to charge to 3. Some card companies currently charge limitless fees for going over credit limits.


I'm not seeing any of these protections as being onerous. Could you highlight which ones you think shouldn't apply?

As to overlimit fees in general, you don't see a problem with a credit card company that knows what your limit is and all of your outstanding charges and then approves transactions anyway? What kind of sense does that make?

To counter your claim of "don't spend more than your limit", I present the following scenario. You have a $500 limit credit card and visit a hotel and all the fees are $300. You check out and the next day make $150 in purchases at 10 different stores. Without your knowledge, the hotel decided the night you checked out that you did $200 in damage to the room (even though you did none) and charges the $200 to your card. The card company knows that the total of the hotel charge is $500 and you're at your limit. But you go and run ten purchases, each one costing you a $39 overlimit fee. Your balance is now $1,040! More than double your limit, when you should actually be $50 under your limit. And none of it was your fault! But good luck getting either company to own up to the $390 in bogus fees. Chances are the "policy" of the credit card company is to only waive a few of the fees and make you pay the rest. And this isn't the only scenario where you could incur overlimit fees without actually going over the limit. :mad:

You see, the credit card companies, prior to the CARD Act, were able to engage in highly deceptive strategies designed to manipulate the consumer into spending more money than they had. They withhold information about the consumer's balance and pending charges, rearrange transactions to make them the most money and put in place "policies" designed to let them continue to charge fees on amounts that never should have gone through. Else, why call it a limit?!

I can't possibly see how it is solely the customer's fault when the card company knows exactly what your balance and pending charges are at any given time.

thelnel52 02-19-2010 03:43 PM

Quote:

Originally Posted by TheDuck23 (Post 27650352)
How is charging someone for being late or spending too much a scam? It sucks I know, but it's not a scam. It's like parking tickets; Annoying as hell, and I curse the city everytime I get one, total bullshit. But, in the end it was my fault for letting the meter expire or forgetting to move my car for streetsweeping. Late and overlimit fees suck, but it's your fault if you forget. I don't know, there are some things in this legislation that are definitely good, but I disagree others.

Scam is a difficult word to define (go ahead smart-butts and link dictionary.com)- but some of the stuff that banks do is clearly aimed at maximizing revenue in a dishonest way. (here comes a rant)

One example that I can think of was a few years ago, I was hovering right around $200 in my bank account and it was my fiance's birthday- I was running errands all morning (I bought some stamps, went to two different grocery stores, and staples, spending about $10 in each place). Then, I went to costco and picked up a few things (maybe $50) and, as I was in line, I realized that I hadn't bought her anything yet. So, I went to the desk, picked up a coupon, and went back and bought her the stupid sex in the city collection for something like $150. I figured that I'd be overdrawn, but I was willing to just pay the extra $40 and have a decent present for her, and cover the difference in the next few days.

What was frustrating, though, was that BofA rearranged my transactions for the day from largest to smallest, rather than chronologically. So, instead of there being a $37 fee, I had 6 x $37. It turned out that I only had about $165 in the bank, so, when ordered from largest to smallest, the damn Sex in the City dvds put me below zero (37 bucks). The next biggest transaction was the other stuff from Costco (37 more bucks), then I had four more from the little $10 transactions in the morning. In my mind, paying $220 or so for overdrafting by less than $100 is unconscionable, and when I called B of A to discuss the charges, the woman told me that they order them in that way "for my protection", because typically more expensive transactions are more important, and they want to make sure that those transactions clear. That would be great if it made any sense- but here, merchants are paid instantly (....APPROVED), so that, unfortunately, doesn't make any sense. All that policy does is maximize overdraft fees.

Now, if I had been more responsible, I would have known exactly what was in my account and would have spent less. Or, I was intent on using money I didn't have, I should have gone someplace other than Costco (Costco only takes AMEX) and used a CC to buy. I didn't, and I was prepared to pay the $37 or whatever the fee was. When BofA turned it into 6x that, I would say that was dishonest on the bank's part.

/rant

redmaxx 02-19-2010 04:04 PM

Quote:

Originally Posted by thelnel52 (Post 27651226)
Scam is a difficult word to define (go ahead smart-butts and link dictionary.com)- but some of the stuff that banks do is clearly aimed at maximizing revenue in a dishonest way. (here comes a rant)

One example that I can think of was a few years ago, I was hovering right around $200 in my bank account and it was my fiance's birthday- I was running errands all morning (I bought some stamps, went to two different grocery stores, and staples, spending about $10 in each place). Then, I went to costco and picked up a few things (maybe $50) and, as I was in line, I realized that I hadn't bought her anything yet. So, I went to the desk, picked up a coupon, and went back and bought her the stupid sex in the city collection for something like $150. I figured that I'd be overdrawn, but I was willing to just pay the extra $40 and have a decent present for her, and cover the difference in the next few days.

What was frustrating, though, was that BofA rearranged my transactions for the day from largest to smallest, rather than chronologically. So, instead of there being a $37 fee, I had 6 x $37. It turned out that I only had about $165 in the bank, so, when ordered from largest to smallest, the damn Sex in the City dvds put me below zero (37 bucks). The next biggest transaction was the other stuff from Costco (37 more bucks), then I had four more from the little $10 transactions in the morning. In my mind, paying $220 or so for overdrafting by less than $100 is unconscionable, and when I called B of A to discuss the charges, the woman told me that they order them in that way "for my protection", because typically more expensive transactions are more important, and they want to make sure that those transactions clear. That would be great if it made any sense- but here, merchants are paid instantly (....APPROVED), so that, unfortunately, doesn't make any sense. All that policy does is maximize overdraft fees.

Now, if I had been more responsible, I would have known exactly what was in my account and would have spent less. Or, I was intent on using money I didn't have, I should have gone someplace other than Costco (Costco only takes AMEX) and used a CC to buy. I didn't, and I was prepared to pay the $37 or whatever the fee was. When BofA turned it into 6x that, I would say that was dishonest on the bank's part.

/rant

:clap: Another famous example is Wachovia charging overdraft fees when your account never goes negative. And it was/is legal. Figure that one out. :crazy:

bottsjw 02-19-2010 04:33 PM

Just Thursday I received an offer from BofA that any purchase over $250 would qualify for a 2.99% interest rate. When I read the fine print it gave the same language that "We will allocate your payments to balances (including new transactions) with lower Annual Percentage Rates (APRs) before balances with higher APRs." Promo runs until end of March. What the heck? Can the bank get around the new rules when the rates are part of a promotion? Aren't the teaser rates ALWAYS part of a promotion?

I also thought this was the case ....
Also off limits is the trick of offering a low rate for balance transfers, a higher rate for new charges -- then applying all your payments to the low rate debt first (so that the bank can ding you for higher rate debt as long as possible.)

thelnel52 02-19-2010 04:51 PM

Quote:

Originally Posted by bottsjw (Post 27652478)
Just Thursday I received an offer from BofA that any purchase over $250 would qualify for a 2.99% interest rate. When I read the fine print it gave the same language that "We will allocate your payments to balances (including new transactions) with lower Annual Percentage Rates (APRs) before balances with higher APRs." Promo runs until end of March. What the heck? Can the bank get around the new rules when the rates are part of a promotion?

This is a bit confusing, but the new rules seems to be that anything above the minimum payment must go towards the higher-interest.

http://www.creditcards.com/credit...e-1282.php

My understanding is, when they determine the min. payment, they figure out the interest and then add some chunk of principal to add to that so you will pay it off before some prescribed amount of time. That constitutes the minimum payment, and I think that they can make that be entirely the low rate principal. If you want to pay more than the minimum, you can, and all of that money goes straight towards the higher rate stuff.

So, it's not as good as if everything went straight at the higher rate.

If I'm wrong, someone please correct me.

Emostarzz3398 02-19-2010 06:04 PM

First Citizens Bank and all Credit Union are the only way to go. B of Amer & Wachovia need tofold up & die. i would be totally embarrassed to admit it if I worked there. Both are thieves and should take alot of blame for the financial crisis.

dittyesq 02-20-2010 07:32 AM

Quote:

Originally Posted by Emostarzz3398 (Post 27654210)
First Citizens Bank and all Credit Union are the only way to go. B of Amer & Wachovia need tofold up & die.

I sympathize with the viewpoint, but Slickdealers might want to take a more nuanced view.

If you have a relatively small account balance, credit unions or smaller banks could well be the right way to go.

However, SDers with large account balances can milk these banks for very good deals if you play your cards right. Both BofA and Wells Fargo (btw, Wachovia is essentially "dead" already; Wells ate it) offer free online stock trading for investors with sizeable "relationships" with the banks. The details differ between the banks, and are subject to change, but last I checked $25,000 in "relationships" with either bank should enable you to trade commission-free. Compare this to the offers at other large banks such as Chase, and it's hands-down a winner.

Further nuances: BofA's Premier banking program used to provide excellent customer service, but the merger with Merrill Lynch has infected BofA with that latter bank's attitude towards customers. Service standards have declined dramatically over the past two years. In contrast... I have not banked with Wells before, but Warren Buffett has been steadily increasing his investment in the bank, arguing that it is conservatively managed and misunderstood on Wall Street. That's a big vote in favor of the company.

--Rich (dittyesq)

thnkpd9 02-20-2010 09:50 AM

Quote:

Originally Posted by dittyesq (Post 27662536)
However, SDers with large account balances can milk these banks for very good deals if you play your cards right. Both BofA and Wells Fargo (btw, Wachovia is essentially "dead" already; Wells ate it) offer free online stock trading for investors with sizeable "relationships" with the banks.

Yes, but the trade execution is horrible compared to discount brokerages like Scottrade (let alone full-service firms like Goldman). So you're saving $7 a trade on commission, but it's costing you $$$ in poor trade execution.

brendo927 02-20-2010 12:43 PM

From my perspective U.S bank and Wells Fargo are the best to bank with. I work for the biggest non-profit credit counseling agency and most of my referrals are from BOA and chase. People with hardships are much more likely to get help or internal hardships from Wells Fargo and U.S bank than other banks. That's just IMO and of course its a case to case basis.

The worst financial institution to work with is Citifinancial. NEVER take a personal loan from this company you would have better luck with a loan shark.

garrett678 02-20-2010 05:26 PM

success!

beckstar 02-21-2010 07:03 AM

I have overdraft protection on my checking account, it automatically draws from my savings account (at the same bank) in $100 increments if I go under $0 balance in checking. has always been a free service but just last month I had an auto-transfer and was charged a $7 transfer fee. (again, MY money in savings covering my checking account, the bank was not having to "risk" anything by covering the overdraft as it was covering it with MY OWN money). But I guess they think that the computer-generated auto-transfer is worth $7 :mad: You're gonna see crap fees like this all over the place now that banks are losing profits elsewhere after the implementation of CARD.

edit: my bank is Bank Midwest, not a huge nation-wide banking operation.

dittyesq 02-21-2010 07:59 AM

Quote:

Originally Posted by beckstar (Post 27682150)
...last month I had an auto-transfer and was charged a $7 transfer fee...

The dirty little secret of banking is that -- much like the rebate-offerors -- they rely heavily on the laziness of consumers to boost their profits.

If you have not already, give the bank a call, object to the fee and ask that it be removed. They're obviously hoping you will just let it slide, sigh, and let the fee stand. But for a "first offense" like this, banks almost always agree to remove the charges.

Then, either switch banks if they have irked you sufficiently, or refuse to accept this new "service" by making the transfers yourself, ahead of time.

--Rich (dittyesq)

Mr. Harley 02-21-2010 10:51 AM

Another nasty little secret - if you pay your credit card by mail, NEVER put anything in the envelope except a check and the billing stub. Back in the mid-90's I was transferred, had a cash cushion, moved, and didn't need the cushion. I went to pay off my Credit Card balance, and enclosed a note with the name/id number of the operator who had given me the info and an old duplicate statement with a new date hand written on it - my bills hadn't caught up with me yet.

It turns out that most locations that process the payments weigh the envelope, and if it weighs more than the envelope, a check, and the billing stub "should", it goes in the problem bin. Those DO NOT get processed in a timely basis, and I ended up with an overdue payment, canceling the first "lost" check that was mysteriously found (one fee), being charged a fee for a canceled check that they then tried to deposit, and of course all the interest for that month (about a $2000 balance). I got it all waived except the check cancellation fee, it was not my fault - especially when the credit card company "accidently" tried to cash the canceled check over one week late (they had been informed it was canceled and I kept notes/names on every single contact) - but I spent a TON of time on the phone getting it straightened out. I now do almost all of my banking with credit unions. A very nice supervisor at the payment center explained the weight trick to me so it could not happen again.

nanners1955 02-21-2010 11:43 AM

Quote:

Originally Posted by kharvel (Post 27623608)
Does anyone believe that the CARD Act and any credit card legislation is BAD for Slickdealers?

Let's face it - most SDers pay off their credit card every month and so those who are not frugal or money-savvy are basically subsidizing the credit card usage of SDers (in terms of no annual fees, generous rewards, high credit limits, etc.). With the CARD Act and other credit card legislation, all those benefits are going away and SDers will now pay dearly for the regulation.

Yes I am sure that is true most of the time...but I am sure their are some like myself that were not frugal and are digging themselves out. My DH and I fall under that category...and we are almost done thank God!!! When we married our credit was already ruined by circumstances in our previous marriages. Then we worked hard to build the credit. Then thought we desrved some things for our sacrifice LOL...Learned our lesson with that

straywolf 02-21-2010 12:57 PM

Nice article. I just received an Opt-Out letter from Citi Diamond Mastercard stating that they are going to start an annual fee in two months for the card. The fee can be refunded at the end of the year if I spend at least $2400 annually.

redmaxx 02-21-2010 03:51 PM

Quote:

Does anyone believe that the CARD Act and any credit card legislation is BAD for Slickdealers?

Let's face it - most SDers pay off their credit card every month and so those who are not frugal or money-savvy are basically subsidizing the credit card usage of SDers (in terms of no annual fees, generous rewards, high credit limits, etc.). With the CARD Act and other credit card legislation, all those benefits are going away and SDers will now pay dearly for the regulation.
I don't agree that SDers will pay at all. American Express, for example, hasn't increased the cost of using their Blue Cash card. I see people crying about increased costs for "responsible borrowers" all over the place and little evidence that this is the case.

Hardwyre 02-21-2010 06:49 PM

Simple Fix for Credit Woes: Stop living beyond your means and buy only when you have the cash.

Credit was meant to get you a house and a car; it wasn't meant to buy clothes, stereos, fancy phones, tvs, etc. We've become addicted to "stuff" and that addiction is showing.

Elmer 02-22-2010 09:04 PM

Quote:

Originally Posted by Hardwyre (Post 27694108)
Simple Fix for Credit Woes: Stop living beyond your means and buy only when you have the cash.

Credit was meant to get you a house and a car; it wasn't meant to buy clothes, stereos, fancy phones, tvs, etc. We've become addicted to "stuff" and that addiction is showing.

:iagree:

smswartz 02-23-2010 06:20 AM

Quote:

Originally Posted by Hardwyre (Post 27694108)
Simple Fix for Credit Woes: Stop living beyond your means and buy only when you have the cash.

Credit was meant to get you a house and a car; it wasn't meant to buy clothes, stereos, fancy phones, tvs, etc. We've become addicted to "stuff" and that addiction is showing.


Best post to date. Credit is for buying items that you realistically can't pay for in a lump sum like a home, car, college tuition, and the like.

Indie 02-23-2010 09:21 AM

Citibank $60 annual fee effective 4.1.10
 
Yup, just got the letter from Citi. Guess they dont like me paying off monthly. Oh well, they're as good as cancelled for now. 3/30 is the kill date. there are others out there.

kugel 02-23-2010 05:28 PM

Quote:

Originally Posted by redmaxx (Post 27690710)
I don't agree that SDers will pay at all. American Express, for example, hasn't increased the cost of using their Blue Cash card. I see people crying about increased costs for "responsible borrowers" all over the place and little evidence that this is the case.

Didn't you notice that Blue Cash reduced the cashback rate from 1.5% to 1.25%? What do you call this if not "paying"? In fact Blue Cash is hardly competitive now because you have to spend around 20K to break even with "standard" 1% reward cards (you get only 0.5% in the first tier). I'm with Schwab now - but who knows how long that will last.

kazmandu 02-23-2010 05:41 PM

Yippee! Sounds like the government is yet again going to protect me from my irresponsible behavior and inability to read instructions. I am sure the unintended consequences and outlandish price tag will never arrive. Now if I could just get them to stop by each night and make me some microwave popcorn life would be complete.

redmaxx 02-23-2010 09:44 PM

Quote:

Originally Posted by kugel (Post 27752046)
Didn't you notice that Blue Cash reduced the cashback rate from 1.5% to 1.25%? What do you call this if not "paying"? In fact Blue Cash is hardly competitive now because you have to spend around 20K to break even with "standard" 1% reward cards (you get only 0.5% in the first tier). I'm with Schwab now - but who knows how long that will last.

I hadn't noticed this but I doubt it has to do with the new legislation. American Express has been slashing at all kinds of stuff since the recession started and this is probably just the latest thing. I think the new law will be used as a scape goat though.

Quote:

Originally Posted by kazmandu (Post 27752340)
Yippee! Sounds like the government is yet again going to protect me from my irresponsible behavior and inability to read instructions.

How about you be responsible and read the thread. Then come back with some reasonable and logical rebuttals? :rolleyes:

audrocks 02-24-2010 07:45 AM

A perspective from the other side. I work for a very large bank as a relatively low-level employee and have paid no fees, with the exception of an annual fee on a single credit card, for years. I have a mortgage, home equity loan, auto loan, savings account, two checking accounts, IRA, etc - lots of potential to get dinged by fees. As another poster said, there is no secret to avoid charges - just know the rules of the game and pay attention to your financial situation. Most banks and credit unions offer a free online banking service - know your balance every day in order to avoid overdraft and balance transfer fees. Purchase your checks online to avoid inflated check charges. Use a debit card to avoid check fees. Compare the rates and features of car loans, credit cards, IRA's, etc., at bankrate.com.

Buying a banking product (and that's what you're doing - buying a service) is no different than buying a car or airplane ticket or anything else: the more you know the less you pay. Those who don't understand and pay attention to details pay more - and then howl about having been ripped off.

kazmandu 02-24-2010 09:22 AM

How about you be responsible and read the thread. Then come back with some reasonable and logical rebuttals? :rolleyes:[/QUOTE]

I did. This whole discussion is the result of masses of people complaining that the big bad banks took advantage of us poor gullible folks. I was happy to read the fine print and take advantage of the banks while they let overzealous borrowers feed them piles of cash from fees. Now its a bit tougher to find someone to give me monthly loans for free (yes I realize I pay for the higher prices to merchants who pay the credit cards on the back end) and I may even have to eventually pay a fee for this service. My sarcasm was aimed first at the easy targets who blame the banks for letting them play and second at those (myself occasionally included) who are annoyed that the first group is not going to pay my way anymore. And of course politicians who I am sure are currently drafting legislation assuring properly soft toilet paper so our tushies dasnt become chaffed. :rolleyes::rolleyes::rolleyes:

redmaxx 02-24-2010 09:39 AM

Quote:

Originally Posted by kazmandu (Post 27770036)
I did. This whole discussion is the result of masses of people complaining that the big bad banks took advantage of us poor gullible folks. I was happy to read the fine print and take advantage of the banks while they let overzealous borrowers feed them piles of cash from fees. Now its a bit tougher to find someone to give me monthly loans for free (yes I realize I pay for the higher prices to merchants who pay the credit cards on the back end) and I may even have to eventually pay a fee for this service. My sarcasm was aimed first at the easy targets who blame the banks for letting them play and second at those (myself occasionally included) who are annoyed that the first group is not going to pay my way anymore. And of course politicians who I am sure are currently drafting legislation assuring properly soft toilet paper so our tushies dasnt become chaffed. :rolleyes::rolleyes::rolleyes:

How is universal default ethical or fair?

chaduthy 02-24-2010 10:48 AM

Got My AmeX e-bill yesterday:
A big note of the front page which goes like dis "Late Payment Warning: If we do not receive your Minimum Amount Due by the Payment Due Date listed above, you will have to pay a late fee of up to $39.00."

Flinstones 02-24-2010 01:17 PM

Quote:

Originally Posted by chaduthy (Post 27773078)
Got My AmeX e-bill yesterday:
A big note of the front page which goes like dis "Late Payment Warning: If we do not receive your Minimum Amount Due by the Payment Due Date listed above, you will have to pay a late fee of up to $39.00."

I see that on my citicard website when I log on, but I think it's been there for a while. I auto-pay in full every month, so it doesn't matter to me.

kazmandu 02-24-2010 01:50 PM

Quote:

Originally Posted by redmaxx (Post 27770710)
How is universal default ethical or fair?

Fair is a silly relativistic term. It is ethical only if the terms are clearly spelled out in the application form that must be signed and agreed to by the applicant. If they tell the applicant that their credit rating will be periodically reviewed and the terms of the loan are subject to such findings and spell out the penalties, then I see no problem. If there is no mention of this in the credit agreement, then a court should be able to enforce the original terms on the account balance. Did banks de novo institute the policy, apply it to current balances without allowing the customer to opt out of the account (clearly not the loan balance)? If so, they broke a contract and should be spanked in court.

redmaxx 02-24-2010 01:59 PM

Quote:

Originally Posted by kazmandu (Post 27779170)
Fair is a silly relativistic term. It is ethical only if the terms are clearly spelled out in the application form that must be signed and agreed to by the applicant. If they tell the applicant that their credit rating will be periodically reviewed and the terms of the loan are subject to such findings and spell out the penalties, then I see no problem. If there is no mention of this in the credit agreement, then a court should be able to enforce the original terms on the account balance. Did banks de novo institute the policy, apply it to current balances without allowing the customer to opt out of the account (clearly not the loan balance)? If so, they broke a contract and should be spanked in court.

We have a frame of reference to apply and thus we can objectively determine whether the term is fair or not. The frame of reference is the term being used, "default" as well as the customer's relationship with the lending entity. With respect to the definition of the word "default", if the customer did not default on the loan/credit issued by the lender, how then can the customer be considered in default of the loan/credit issued by the lender? The term "universal default" was introduced clearly as a profit making system and exists solely to entrap people into debt, using terms that many probably do not even understand.

Or are you going to also claim that it's ethical to offer a contract that the other party doesn't understand? Or maybe you're going to claim that they're easy to understand, even though most people can't agree on what any given contract means. The companies, lawyers and courts can't even agree, showing how poorly constructed these terms are and how these companies were behaving as nothing more than exortionists in many cases.

dittyesq 02-24-2010 03:48 PM

Quote:

Originally Posted by redmaxx (Post 27770710)
How is universal default ethical or fair?

I won't defend the practice, because it does seem like dirty pool... but there is a certain logic to it.

Consider that if a borrower's failure to pay one bill from Company X indicates financial stress, this could lead to his later failing to pay other bills to Company Y. In such a case, Company Y might think it prudent to demand additional compensation for the heightened risk of default, which was brought to its attention by the default on Company X's bill.

Now, this is a big "if." In particular, if the borrower simply forgot to pay Company X's bill on time, if it never arrived in the mail, if he misplaced the bill, etc., then a missed payment does not in fact indicate financial stress in the first place. (And as you point out, it doesn't seem fair from the borrower's point of view, the borrower probably never having read the fine print and being unaware of the "universal default" concept.)

But still, I can see why the concept was invented. It does have a logic to it from the bank's perspective. Or rather, it had. It's all moot now, thanks to the CARD Act.

--dittyesq

redmaxx 02-24-2010 05:00 PM

Quote:

Originally Posted by dittyesq (Post 27782334)
Now, this is a big "if." In particular, if the borrower simply forgot to pay Company X's bill on time, if it never arrived in the mail, if he misplaced the bill, etc., then a missed payment does not in fact indicate financial stress in the first place. (And as you point out, it doesn't seem fair from the borrower's point of view, the borrower probably never having read the fine print and being unaware of the "universal default" concept.)

EXACTLY! That's why this tactic is so evil. I actually have a collections item on my credit report from Capital One for something I do not owe and they refuse to remove it. The whole credit reporting system is corrupt.

Quote:

But still, I can see why the concept was invented. It does have a logic to it from the bank's perspective.
Well, of course. From the bank's perspective, more fees = logic. :nod:

brendo927 02-24-2010 05:34 PM

Quote:

Originally Posted by redmaxx (Post 27784036)
EXACTLY! The whole credit reporting system is corrupt.



Well, of course. From the bank's perspective, more fees = profit. :nod:

bingo....and fixed

Superocean 02-25-2010 04:44 AM

Quote:

Originally Posted by Flinstones (Post 27778042)
I see that on my citicard website when I log on, but I think it's been there for a while. I auto-pay in full every month, so it doesn't matter to me.

Have you ever had any issues with autopay? Did any payment ever go out a day late due to your banks server errors or maintenance?

I've paid online to banks before and one didn't credit me for payment for 5 days and tried to charge me late fees. It's not just lazy or unaware ppl, it's also their tactic to charge you and see if they get away with it. Banks are worse than kids testing your patience at times.

Flinstones 02-25-2010 05:05 AM

Quote:

Originally Posted by Superocean (Post 27794182)
Have you ever had any issues with autopay? Did any payment ever go out a day late due to your banks server errors or maintenance?

I've paid online to banks before and one didn't credit me for payment for 5 days and tried to charge me late fees. It's not just lazy or unaware ppl, it's also their tactic to charge you and see if they get away with it. Banks are worse than kids testing your patience at times.

NO, I haven't. It's been this way for two years. I actually did it through the citi card website, and notice that it doesn't leave my bank account until the day after it posts to my citicard.

If they charged me a late fee and interest for an issue on their end, I'd call, complain, cancel, and contact the BBB, even if the charges were only $50.

kazmandu 02-25-2010 09:31 AM

Quote:

Originally Posted by redmaxx (Post 27779444)
We have a frame of reference to apply and thus we can objectively determine whether the term is fair or not. The frame of reference is the term being used, "default" as well as the customer's relationship with the lending entity. With respect to the definition of the word "default", if the customer did not default on the loan/credit issued by the lender, how then can the customer be considered in default of the loan/credit issued by the lender? The term "universal default" was introduced clearly as a profit making system and exists solely to entrap people into debt, using terms that many probably do not even understand.


I stand by 'fair' being a relativistic term. Fair depends on perspective and is clearly subjective. I'm lost when you claim 'fair' can be 'objectively determined'. Take your last sentence and replace 'universal default' with 'credit card'. Your premise forces companies to determine how stupid their customer is and offer products based on their customer's IQ. Now, if they make a mistake and the customer is actually considerably more stupid than they calculated, the company is held accountable. Oh wait, I think this is covered under caveat emptor...

Quote:

Originally Posted by redmaxx (Post 27779444)
Or are you going to also claim that it's ethical to offer a contract that the other party doesn't understand?

Was it written in hieroglyphs? Did they force you to sign?

Quote:

Originally Posted by redmaxx (Post 27779444)
Or maybe you're going to claim that they're easy to understand, even though most people can't agree on what any given contract means. The companies, lawyers and courts can't even agree, showing how poorly constructed these terms are and how these companies were behaving as nothing more than exortionists in many cases.

Then take them to court. If you are correct, you can find a lawyer to work on commission and you can split the millions in punitive damages. People hate credit card companies and juries will love to hurt them. If you put me on the jury I will award you the cash. If you are correct.

redmaxx 02-25-2010 04:52 PM

I hate to say I told you so, but responsible users aren't going to be hurt: http://marketplace.publicradio.or...dit-cards/

redmaxx 02-25-2010 04:55 PM

Quote:

Originally Posted by kazmandu (Post 27801734)
I stand by 'fair' being a relativistic term. Fair depends on perspective and is clearly subjective. I'm lost when you claim 'fair' can be 'objectively determined'. Take your last sentence and replace 'universal default' with 'credit card'. Your premise forces companies to determine how stupid their customer is and offer products based on their customer's IQ. Now, if they make a mistake and the customer is actually considerably more stupid than they calculated, the company is held accountable. Oh wait, I think this is covered under caveat emptor...

The counterpart to caveat emptor is that lenders do have a legal fiduciary duty to their customers.

Quote:

Was it written in hieroglyphs? Did they force you to sign?
Credit card companies were signing up people they knew did not understand the contracts. They were not fulfilling their legal fiduciary duty to their customers.

Quote:

Then take them to court. If you are correct, you can find a lawyer to work on commission and you can split the millions in punitive damages. People hate credit card companies and juries will love to hurt them. If you put me on the jury I will award you the cash. If you are correct.
That's an extremely inefficient and costly way to solve the problem.

kazmandu 02-25-2010 06:43 PM

Quote:

Originally Posted by redmaxx (Post 27816046)
The counterpart to caveat emptor is that lenders do have a legal fiduciary duty to their customers.

As is spelled out in the contract that was voluntarily signed.

Quote:

Originally Posted by redmaxx (Post 27816046)
Credit card companies were signing up people they knew did not understand the contracts. They were not fulfilling their legal fiduciary duty to their customers.


Back to my point. What IQ level should they write this contract too? Should they use colloquial language, slang, ebonics? Or should they use accepted legal terminology to specify a legally binding contract?

Quote:

Originally Posted by redmaxx (Post 27816046)
That's an extremely inefficient and costly way to solve the problem.

And if they are operating illegally, they will lose vast sums. Thus I assume their contracts are legally tight as I only see them losing money the old fashioned way (extensive over leveraging coupled with risky hedge and derivative bets).

Overall, I think we are just going to disagree on this matter. If you wish to reply I'll read your comment on this and cede the last word to you,

Kaz

Mr. Harley 02-25-2010 11:07 PM

We had a friend who purchased a house. She had been flunked out of her Masters program by her instructor for being an uppity yankee - while she was abrasive, she was never a jerk when I saw her in action. She had to pay in the end with credit cards, and had paid off I cannot remember how many thousands - she had I think fifty thousand when she was booted.

She purchased a house with some help from her parents. She had just transferred all her credit cards to a low interest one. The cost of the house was LOWER then the cost of the apartment she had rented. She had one ding on her credit, where a "friend" she had let stay with her and her husband had run up hundreds of dollars of 1-900 calls and left her holding the bag - and she still paid for them admitting to her error of trusting the creep. To make a long story - long - the bank reviewed her credit and upped her rate from a low single digit rate to 29% because they didn't like her "cash flow". Since she still had I believe over $20 grand in principle, this left her with $50 a month to live on. She said screw this and declared bankruptcy. This was back in the late 90's before they changed the bankruptcy laws - but today she could have closed the account, locked in the rate, and paid it off without bankruptcy if I understand the new rules right. We really did need some effective regulation.

And FYI - while I have been credit card balance free for well over a decade now, when my mother finally died from a nasty eight year degenerative disease combined with cancer in the end, my dad had debts, after insurance, of over $100,000. He was able to pay them off after a couple of years, he was an engineer who transitioned in a corporate leadership position. Most people stuck with bills like this cannot, and try to stay alive with credit cards. I believe over half of all bankruptcies involve sudden, large medical bills. You don't choose to have terminal cancer, lupus, a stroke, etc. So stop acting as though it's just a matter of just saying "no" - if it is that or the experimental cancer treatment that may save your wife - mother - daughter from breast cancer that is not responding to the covered drugs, would you spend the money?

kazmandu 02-26-2010 07:37 AM

Quote:

Originally Posted by Mr. Harley (Post 27824442)
We had a friend who purchased a house. She had been flunked out of her Masters program by her instructor for being an uppity yankee - while she was abrasive, she was never a jerk when I saw her in action. She had to pay in the end with credit cards, and had paid off I cannot remember how many thousands - she had I think fifty thousand when she was booted.

She purchased a house with some help from her parents. She had just transferred all her credit cards to a low interest one. The cost of the house was LOWER then the cost of the apartment she had rented. She had one ding on her credit, where a "friend" she had let stay with her and her husband had run up hundreds of dollars of 1-900 calls and left her holding the bag - and she still paid for them admitting to her error of trusting the creep. To make a long story - long - the bank reviewed her credit and upped her rate from a low single digit rate to 29% because they didn't like her "cash flow". Since she still had I believe over $20 grand in principle, this left her with $50 a month to live on. She said screw this and declared bankruptcy. This was back in the late 90's before they changed the bankruptcy laws - but today she could have closed the account, locked in the rate, and paid it off without bankruptcy if I understand the new rules right. We really did need some effective regulation.

And FYI - while I have been credit card balance free for well over a decade now, when my mother finally died from a nasty eight year degenerative disease combined with cancer in the end, my dad had debts, after insurance, of over $100,000. He was able to pay them off after a couple of years, he was an engineer who transitioned in a corporate leadership position. Most people stuck with bills like this cannot, and try to stay alive with credit cards. I believe over half of all bankruptcies involve sudden, large medical bills. You don't choose to have terminal cancer, lupus, a stroke, etc. So stop acting as though it's just a matter of just saying "no" - if it is that or the experimental cancer treatment that may save your wife - mother - daughter from breast cancer that is not responding to the covered drugs, would you spend the money?

This is a very compelling story. I would tend to believe that if the credit card companies thought they could get any of their money from your friend they would have set up a payment plan but I'll take the story at face value. So who is responsible for paying the debts? Bankruptcy is a tough plight but it is a risk that is priced into the fee charged for the service. Low rate cards charge 7% over prime and not 2% over prime because a certain number of people are going to default. When some people get too close to the edge of bankruptcy, the precarious situation they are in can cause the bankruptcy--hence the whole edge idea. Of course each person (myself included) would chose to spend whatever was needed to treat a sudden medical condition and it may ruin them (or me) financially but our system uses bankruptcy (from the government side) and charitable organizations (private side) to address these situations. Insurance mitigates risks but there is no system for removing risk from life.

dittyesq 03-01-2010 07:06 AM

Quote:

Originally Posted by kazmandu (Post 27829648)
Insurance mitigates risks but there is no system for removing risk from life.

Sad, but true. Despite billions in taxpayer dollars spent (and trillions more promised) on Social Securing, Medicaring, arsenic-in-the-water montoring, and more recently, waterboarding, did-you-pack-this-bag-yourself questioning, and shoe-x-raying -- risk remains. That's just the way life works.

--Rich (dittyesq)

dittyesq 03-10-2010 10:08 PM

BofA reacts
 
Breaking news: Bank of America is dropping overdraft fees ... and overdraft protection, too, it sounds like:

http://online.wsj.com/article/SB1...st_Popular


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