CREDIT CARD CONFIDENTIAL - An Insider Reveals How To Avoid Heartbreak, Wasted Fees & Identity Theft

At least one major credit card company has put a new program in place: credit card accounts that are inactive for 13 months are being suspended and, around two months later, closed.

This is significant because suspended accounts, while not yet closed, are useless. They are restricted from all transactions.

A card associated with a suspended account will be declined if you attempt to make a purchase with it.

And, unless you act within a strict framework for redeeming any rewards on a suspended account, they will be lost. [Read more →]

Credit card rates are raised according to rules and formulas.

When they are raised to penalize a cardholder for a violation of contract terms (by applying a penalty rate to the account) that change in rates is called repricing. [Read more →]

If you have two, three, four, five or more credit card accounts that are carrying balances, chances are that all of them have had their interest rates raised in the last few months.

If you couldn’t pay them off before, you’re not going to be able to pay them off  separately when they are all accruing higher interest. Debt consolidation will, likely, be a necessity. [Read more →]

Credit card issuers have raised interest rates to unbelievable levels, increasing some to more than double what they were. The high twenties are common and some credit cardholders accounts have been raised to thirty percent and more. [Read more →]

Lauren K. Bodenski left this comment, and her situation is common.

“Our credit card company, Chase, just raised our credit limit to 27.24% (from 12.99%) from June to July statements. When I called to ask, I was told that the federal government has frozen interest rate changes pending enactment of the Credit Card Reform Act implementation (six+ months from now?) Is there any truth to this assertion by the Chase representative or is it the line of bull I suspect it is?” [Read more →]

In an increasing effort to protect itself, the credit card company I work for is requiring physical proof of income from both new and established customers.

Yet this company is not alone in its policy changes. All credit card lenders are working to put protections in place in an attempt to circumvent loan defaults. 

UNVERIFIABLE INCOME: GOING, GOING…

There was a time when you could get a credit card and a credit limit based on unverifiable answers about your income that you scribbled on a credit card application. Those days are fast disappearing as credit card companies become more and more insistent about assuring the loans they extend will be repaid. [Read more →]

Many credit card customers are getting notices that their accounts are being closed as of a certain date.

Millions of other credit cardholders have gotten notices of changing terms, and are calling in to close their accounts.

Be aware that the software interface that is used by the credit card call center reps to answer your questions and  process requests to close accounts is not programmed to make sure that you do not lose your rewards.

So, should you receive notice that your account is being closed, or should you decide to close a credit card account, then redeem your rewards BEFORE your account actually closes, or your rewards will, automatically, be forfeited. [Read more →]

A customer called to claim that there was a major discrepancy between the rewards program that she had agreed to, and the rewards program she was getting.

She was supposed to be getting a 5% cash back reward on certain purchases, but she was only receiving the rewards on a limited amount of these purchases. Her credit card company was putting a cap on the reward so that she was only getting this deal on the first $2500 of the purchases.

CUSTOMER CONTENDS OFFER HAD NO CAP

It was her adamant contention that she had a paper copy of the promotion in her hand, and it made no mention of a cap on this reward. [Read more →]

When your card is maxed out, you must add extra to your minimum payment, to make sure that your balance stays below your credit limit.

Otherwise you will get dinged for an over limit fee at the end of the month, when the interest that has been accruing all month gets added to your balance and takes you over your credit limit.

So many still do not understand this.

And that’s why the amount of money generated by penalty fees like late charges and over limit charges have increased by about $1 billion annually in recent years, and should top $20 billion this year. [Read more →]

The Visa system as we know it today, was started decades ago by a businessman who found himself in the embarrassing position of not having enough cash in his wallet to pay for a dinner for his clients.

He had the money to buy whatever he wanted; he just didn’t have it on him. He subsequently vowed that neither he nor anyone else in his financial position would ever be embarrassed in that way again.

The minimum payment on a credit card account was then set at full payment, due at the end of the month. 

The credit card issuer’s profits came from charging merchants (who were enrolled in the program) a percentage of the purchase price for each transaction, like today.

Plus each credit cardholder was billed a monthly fee for the privilege of having credit on demand.

A FORMULA FOR MORE PROFITS

Looking for more profits and a larger customer base, the minimum payment was reduced to 5% of the balance so consumers would float debt.

This attracted people who, for the first time, could buy things that they could not, otherwise, afford.

As the money-making potential of the industry began to be realized, cards with no monthly fee were issued in order to attract less affluent customers who would float their loans for extended periods.

Then the minimum monthly was reduced to 3% so consumers would float more debt longer.

Finally, the minimum monthly payment was reduced to 1% to 2% for lower-income customers, which pretty much guaranteed that the debt itself would never be paid off.  [Read more →]