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Credit Cards

May 18th, 2007 11:02 AM

A few weeks ago, I was mesmerized watching CSpan as the head honchos of three of the largest credit card companies explained to Congress how wonderful they are. As Senators read horrible tales of how their constituents had been abused by credit card companies, the three multimillionaire CEOs squirmed and shifted in their seats.

As someone who deals with people going through difficult financial situations, I wanted to stand up and cheer. About time Congress got involved in the credit card mess. Unfortunately, some of the worst offenders didn't send their representatives to the hearings.

Generally speaking, I like to see as little government regulation in business transactions, but this is an area where some real reform is needed. These companies are literally out of control. Here's an example of a stunt that Capital One pulled on me:

As anyone who pays their bills online knows, you must select the closest business day before the payment due date if it falls on a weekend. A few months ago, I set up my online payment almost three weeks in advance and selected Friday, the day before my payment was actually due.

When my next month's statement arrived, I was surprised to see a hefty late fee. Before calling Capital One, I checked my bank account online to verify that it had in fact been paid on the Friday I selected; it had. I called Capital One and was informed that they since did not receive my payment until after 3:00 on that Friday, it was not credited to my account until the next business day. I was flabbergasted! That is perhaps the most creative way to basically steal money from customers I have ever seen! They had my money one day early yet I was charged a late fee. Only credit card companies can get away with unethical, dirty, sneaky tactics like this!

We as consumers need to stop complaining and do something. Write to your elected officials and let them know you've had enough already!

Posted by David Uhlig on May 18th, 2007 11:02 AMPost a Comment (5)

So what's in your wallet. I have a Capitol One card thy just raised the intrest rate to 14.7%. The trick is to pay the card off in full when the bill arrives. Just use your credit card as a cash advance. In your grandfathers day they didn't even have credit cards. Things were alot more simple back then.

Posted by Cadillac Joe on August 21st, 2007 10:09 PM

Paying your card off in full every month is responsible usage of your card. But, if you are comfortable keeping 10-20% of your available credit as a balance, you will actually increase your credit scores a bit.

Posted by David Uhlig on August 30th, 2007 11:31 AM

I am going to tell you what the blog moderator failed to mention. After all bankruptcies are one of the services they offer. Credit card issues here's my advice. 1. Pay every bill on time. A few months of timely payments can help boost your score. 2. Pay down the cards that are maxed out first. 3. Do not cancel any credit cards. Remember if your interested in a home loan people with the highest credit scores get the best rates. Generally you need a score of 700 to 740 or more to get the best mortgage rates.

Posted by Cadillac Joe on August 30th, 2007 10:41 PM

Again, good advice Joe. I failed to mention those facts not because bankruptcy typing is one of the services I offer, but rather because the subject of my original post had nothing to do with how to improve one's credit scores. I was simply discussing my satisfaction with seeing Congress finally calling credit card companies to task. Additionally, there is a page on my site at http://www.nolawyersfees.com/ImproveYourCreditScore, in which your suggestions are addressed: " The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle. Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment. Don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better. It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score." -Dave

Posted by David Uhlig on August 31st, 2007 10:45 AM

This gets back to the original blog by Dave. I will try to shed some light on this matter. This is only my opinion and I am not trying to represent this website or blog. Getting back to Dave's late fees. There is no limit on the amount a credit card company can charge a cardholder for being even an hour late with a payment. It's important to read the fine print on your credit card agreement. Even if you make your credit card payments on time, the credit card bank can raise your interest rate automatically if you're late on payments elsewhere -- such as on another credit card or on a phone, car, or house payment -- or simply because the bank feels you have taken on too much debt. It's called the "universal default" clause and increasingly is becoming a standard clause in credit card agreements. OK lets talk about ones credit score, also known as a FICO score -- this has become a vital statistic and can be widely shared. It is used to determine how much you can borrow, how much you pay for life insurance, if you can rent a home, and also it can be a factor in determining the interest rate you pay on a credit card. As most of you don't probably know your credit score is usually determined by five factors, with the most important being the amount you currently owe and your payment history on large debts. If you have a problem with your credit card, first try to resolve it directly with the store or the credit card company. The Better Business Bureau can act as an intermediary to help resolve your dispute, and it's easy to file a complaint online. If that doesn't work, you may want to file a complaint with your state's attorney-general or banking agency. You may also file a complaint with the federal agency responsible for enforcing consumer credit laws for your credit card company.

Posted by Cadillac Joe on August 31st, 2007 2:33 PM