Some very odd things are starting to happen in the world of credit cards.
It started when I found out that (due to making what I intended to be my February credit card payment too early--yes, too early--it's a long story) I was the grand total of $17 overdue and my credit card was frozen. (I'd also been charged a $39 overdue fee.)
Did I find out about this from the bank? Was I notified of this in my bank statement or by email?
Nope. I've had credit cards for forty years and I've never had my card refused. Today, I had it refused twice, first while trying to make an online payment and then, after that, during a "test" purchase of a soda from a convenience store (I very rarely use my credit card for day to day purchases, preferring to pay cash.)
I tried calling the "Customer Service" number on the back of my credit card, but got nothing but a computer. After trying for ten minutes to get an actual human being on the line, I gave up and headed down to my bank's local branch.
There, I ended up on their phone talking to the bank's national credit card office and discovered that if any holder of one of their cards pays their bill one day past the due date, they will freeze that customer's card.
One day late. In my case, when I was a whole $17 overdue. That is their policy.
First I'd heard of it.
If I wanted my card unfrozen, I was told, I could make a payment at my local branch and my credit card would start working again two days later. If I wanted to cut the wait time to the next morning, there would be a $15 fee.
After listening to my teeth grind, they agreed to waive the fee.
Had other people run into this "one day late and you're toast" policy? I posted this info on a national blog and started reading the comments. Yes, other people had. And that was just the start.
Some of those comments led me to information that is prompting me to give you this warning:
Be very careful to pay your credit card bills on time, read your bill over thoroughly each time it shows up and be ready for unexpected (and possibly unannounced changes on your credit card terms.
If you give these people the slightest reason to hike your rate, cut your limits or charge you any one of a number of fees, they just might do it. Because banks and other lending institutions are now looking for cash where ever they can find it.
For example, here's a story from CreditMattersBlog.com about American Express customers being called and pressured to pay early. That's right. They're not being called because they're overdue, they're being told to pay before their due date. Not asked, told.
On the same blog, there's also a report about AMEX offering certain customers $300 to close their accounts. It's getting very strange in Finance Land when financial institutions are paying people to close accounts.
Watch also for surprise interest-rate hikes, too. 5%, 10%...or even worse, if you pay late even one or two times a year, an APR hike to a "default" rate that could be as high as 30%.
As for your credit limit, I'm hearing of people with $10,000 limits who suddenly find that their limit's been dropped to $1,500. (I hope such people aren't finding this out when they're traveling.)
Some people think that a lot of this is happening now because the Federal government is talking about passing new regulations on credit card issuers, and the issuers are trying to make as much money in interest and fees as they can before this happens. Sounds plausible to me.
So keep your eyes open, and double-check your credit card bills. If your rates are hiked, your credit limit slashed or you start getting pressured to pay early, feel free to shop around for another card.
But be very cautious about closing your current account. Credit rating companies often don't differentiate between accounts closed by card issuer and accounts closed by customers, so completely closing an account can seriously hurt your credit rating. Keep that no-longer-worth-it account open, but keep the credit limit and the balance very low, ...I'd suggest just a few dollars more than the smallest minimum payment. That way you can keep your credit rating high...without being at the mercy of a credit card issuer.
(One last ironic note: my bank is constantly sending me marketing pitches, despite my asking them to quit. After my card was frozen, they sent me such a mailing that said I was eligible to receive a $50,000 loan...."just fill out this simple form!"
Like I say, things are getting very, very nutty in Finance Land.)
No comments:
Post a Comment