10 Things You Need to Know About Banks and Credit Cards
Credit cards have developed into very complicated financial products. As a result, even if they printed the disclosure in 18 point type, you wouldn't know what was going to hit you from behind. I have been trying to get out of debt recently, so I've been studying the issue. I am now doubling my dose of blood pressure medication and tranquilizers, and practicing yoga so often that I can no longer be gainfully employed. You will need to know what I've found out about banks and credit card companies, especially if you are not making them the focus of your life.
1. You cannot close a credit card account. I paid off a balance to Citibank because they had raised my interest from 0%, which I had signed up for, to 29.9% because my payment was one day late due to Wells Fargo's automated bill pay and the US mail. I asked to close the account. I got the following:
Dear Francine Hardaway: We recently received a request to close your Citi Platinum Select Mastercard account. For your protection, your account has been permanently closed. The closed account cannot be reopened. Please destroy all cards with this account number by cutting the cards in half. A new account number has been assigned to you, and a replacement card will be mailed to you the next business day.
Never mind that I didn't ask for a replacement card.
2. The card companies don't want you to pay off the principal. There's something called a "sweat box" business model for credit cards now. The companies don't want the principal back. They want the fees. They want to keep the consumer paying.
3. Reforms won't work because the credit card companies will find a way around them. Every previous effort at reform has just unleashed further ingenuity.
4. Card issuers can make a profit because the interest rates and fees will be so high that they will offset loss of the principal. This is predatory lending: lending with conscious disregard for the consumer's ability to pay.
5. If you pay too much, they get nervous. In the same mail, I got this notice:
We want to be your number one credit card. We noticed that you recently made a large payment to your Starbucks Card Duetto Visa account and want to make sure we're not losing your business. That's why we want to remind you again of these low-rate reasons to stay -it's our way of showing you that your business is important to us. Enjoy APR's as low as 0% with check numbers 2993 and 2994. 2.99% APR for 24 billing cycles with check numbers 2995, 2996, 2997. (BTW, there's a 3% transaction fee to do any of this, and a billing cycle may no longer be a month.)
6.The interest rate on the card does not tell you what the total cost of revolving a balance on a card will be. There are late fees, over-limit fees, annual fees, foreign transaction fees, interchange fees that are charged to the merchant and passed through to the consumer.
7. Convenience checks are subject to the cash advance fee.
8. The new thing is double cycle billing: The balance on which interest accrues is not the balance on this billing cycle, but on this one and the previous one. And if you are late on another card, or perhaps your cable bill, your credit card interest rate will go up. And perhaps your car insurance.
9. There are tricks about when a payment is posted. After 2 PM might count as the next day, and you may pay interest.
10. And then, all this can influence your mortgage refinance or loan modification.
Aurora Loan Services has carefully reviewed your loan for home retention options. Aurora has determined that we are unable to continue pursuit of said options. A home retention workout on your loan has been denied for the following reason(s): Your finances indicate an inability to afford the monthly payments.
Never mind that I am current on every single payment, mortgage or credit card, despite being over $150,000 "under water" on my home. I have no equity and could have "walked" a year ago, but didn't.
Notice the reinforcement I get for trying to stick with my home payments and pay down my debt, the Suze Orman recommendation.
Take a lesson. The banks own the government, and me, and you. I am finished with them. I am going to get out of debt asap and put my money under a mattress, where at least if somebody eats it, it will be Buppy the Puppy.
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
Maybe we can start by making credit cards illegal and make it a debt card world instead of a cc world.
It's called "financial fraud," Francine, and I suggest that we start using those words.
"Campaign contributions," likewise, are "bribes," and our Constitution calls that a "high crime" (right alongside "treason"). I suggest that we start using those harsh words, too.
Face it: criminals don't stop, especially not when they imagine they are "succeeding" and when they imagine that they "PWN" the Senators and Congressmen and SEC Commissioners and other law enforcement officials who could stop them. We must "stop them." And, "We Can Do It!" (tm), because there are 306 million of "us" and, believe it or not, less than a thousand of "them."
My husband and I have decided to leave the system. We no longer care about our credit scores. We're paying off credit cards and closing the accounts (the horror!) We own our house free and clear and when we get the credit cards payed off, we will be into only cash. Forget the financial guru's that tell you not to close accounts because it makes your credit score worse. FICO is a scam by the banks for the banks. It is geared to trapping people in the system and making them think that there is no other way. We can't wait to be done with it.
I hope you get it done. I'm trying to do the same thing, and sooner or later enough people will do it to influence the system. If we don't play, they can't win.
I wonder when the revolution will begin. How many times must the banks frack us before we do something?
Turning us all into indentured servants to the banking industry is what's sucking the purchasing power right out of the economy. If serious things are not done to restore the balance our economy had with a stable middle class, we will soon cease to be the economic engine that the world economy looks to. When all the captains of industry have no one to sell to, all of their conniving to suck the blood out of the masses will have yielded them nothing.
It is already done, and they are just sucking blood from our bones....They have cannabalized us and are fat and fabulous....
Stop using banks until they respect us, period. We need to just withdraw our support of these institutions as much as humanly possible until they have given us the respect we deserve for using their services to manage OUR money. Would you let someone you know handle your money like this? Charges and fees and surprise overages and interest rates as high as the sky? You wouldn't, and you wouldn't be friends with them very much longer. Withdraw your support of these swindlers. Let them fail or change their ways. We deserve respectful handling of our money.
I am quitting credit cards as much as possible also. I will keep one for emergency use. As far as I see it, they don't deserve my support and patronage.
Credit card points should also be illegal--it rewards a few and causes price increases for all customers whether they use a credit card or not.
Your list is impressive!
How did we get here and how did such an awful law get past that does not kick in for 9 months?
Simple $5 Billion from Banks to Congress:
CBS Report: Wall Street Spent $5 Billion For Political Influence
http://www.cbsnews.com/blogs/2009/03/04/politics/politicalhotsheet/entry4842645.shtml
Right NOW Wall Street OWNS our Congress Paying on average:
1. Average of $7.5 Million to each Senator every 4 years!
2. Average of $1.86 Million to each House Member every 4 years!
So as long as Wall Street and the Banks have control of our Congress all these awful things will continue!
TIME TO REFORM CORRUPTION IN CAMPAIGN FUNDING SYSTEM
Simple Solution to PROTECT OUR Congress Members Votes so votes are NOT sold to Highest Bidders:
1. Setup a Government Contribution Acceptance and Funds Distribution Agency
2. Funnel all Political Contributions through this agency
3. Uses strict formulas for allocating funds to House+Senate Members
4. "Blindly" distribute lump sums twice per year to Politicians - No KNOWN SOURCES of funds!
5. Reserve part of funds for those New Candidates that meet campaign funding criteria
6. Two Term Limits for Senators
7. Four Term Limits for House Members
When I learned that it threw me over the edge.
As hard as it is (huge med bills due to nasty aggressive cancer)...I am obsessed with paying off all credit cards..and even tho "they" say..it's a bad mark to close a card..I will..I will have 2 tops...and always pay them off...right now..I always use my CREDIT UNION as a Visa (never as a debit card)...for credit card purchases..it comes almost immediately out of my sad checking account...but no PIN involved..and no "bill"...to worry about...I still about about $2000 to go...while trying to pay off the medical bills (which make a credit card look "easy to read"...but that's another issue)...
Yes..America...let's get rid of our cards...pay cash..or don't buy...just like...jeezuz..can't believe I'm saying this "our parents and grandparents did".... my credit rating sucks...so..I've little to lose...I'll never ever be able to afford a home...
and I'll bet cutting up a card...will release lots of endorphines.I can't WAIT! (p.s.. Suze orman does NOT live in the real world..she used to...not so much now..)
You know this is something we all have to thank Mr Bush baby for .... Remember, after 9/11, go shopping, buy duct tape, the Ownership Society...too bad we did not know that he meant the WALL STREET OWNERSHIP society....
Usury laws are needed to cap interest rates at 8 percent.
The above quote from the article is so true. Their lost their gamblings over the last 2 years . They want to recoup those losses. So they collude and cut off financial flows which turns a slowing eonomy into a massive depression. They are threatening to continue to choke financial flows if they dont get back their losses.
Preface: I regret supporting/contributing to Obama's presidency and have never voted Republican. I support the presidency and admire his rise to power. He may even do good things to the common man. His pro-Wall st. actions are hurting the common man. I believe most of Wall St. are successful people with no direct intent to steal/gouge money from customers, except for a few rotten apples on the top.
It is Obama/Summers/Paulson/Geitners job to give the banks $3 Trillion though PPIP/TARP/TARPII/AIG. Obama then turns around and publicly decries Wall St.'s methods, bonuses, predatory credit cards to get political mileage. Behind our backs he uses all his political capital, power to ensure Geitner/Summers transfer $3Trillion to the backs. All the anti-Wall St. reform bills that are going through Congress are simply window dressing. None of these bills change the way Wall St. and banks steal and gouge their customers.
You must be logged in to comment. Log in or connect with
