Wednesday, February 25, 2009

Your credit card company seems to hate you - Part 2

In a post yesterday on credit card companies raising rates, increasing fees and even offering $300 to cancel your account, we noted that an upcoming survey from Credit.com showed that one third of respondents found some sort of negative change on their credit card statement.

Those changes included interest rate hikes, decreases in credit limits and closed accounts.

That survey, from national pollster GfK, was released earlier today.

The most startling number: 66.3 percent don't know if their credit card account has experienced some sort of negative change.

That means that of the survey's 1004 respondents, the only ones who didn't know of a negative change were the people who hadn't checked.

The lesson here - look at all the pages of your statement for any changes. If your rate has been raised, you might rethink leaving a balance on it. If your minimum payment has increased, you might save yourself a late fee for underpaying.

"It goes back to the entire subject of financial literacy," said Adam Levin, a consumer expert at Credit.com. "It's abysmal in this country."

If you do find a negative change - and there's apparently a strong chance you will - your options are limited. You can search for a better terms from another company, but good deals are difficult to find in this climate. You also can call your credit card company and negotiate/yell/weep. (Although credit card companies are increasingly rigid, Levin said, "there may be some who will be reasonable because they're scared to death about what's going on.")

You should not, however, cancel your card, financial experts say. Closing accounts can take dozens of points off your credit score.

Levin recommends looking at all your statements for five minutes each day. Doing so will not only alert you to semi-hidden changes, it might help you recognize spending patterns and issues that could give credit card companies good reason to alter your terms.

"You need to self-regulate," Levin said. "No one has the stake in protecting you like you do."

4 comments:

Vincent Vincent said...

Sage advice.
Could have been given to those that
signed the "stimulus bill" without reading it first, but hey wait that was all of them......... including the President.

I am a credit score junkie. Always read the fine print, for some folks that is way easier said than done but it really can save a lot of money for balance carriers.

I snipped my WAMU card just because they will stop offering free credit score check 24/7.

Credit cards are like what politicians are supposed to be here for the help you responsibly, not bury you under incomprehensibly tiny fontage, and laugh from behind while you tie your shoes.

Anonymous said...

This is my 4th recession, and it didn't take me too many years to learn the power you gain when you pay your debts off rather than over time.

I charge everything possible on a single credit card, and then pay it off in full each month. By doing this, I have a monthly record of how I spent my money for tax purposes and I have kept to this commitment to stay as debt free as possible for nearly 10years. There is nothing more freeing than to be out of debt.

Anonymous said...

I was checking my statement and noticed that I was charged a late fee, even though the payment was made 3 days before. Considering what's going on in the econonmy and with the banks, I found this to be very suspicious. By the way, my credit card is with BOA.

Anonymous said...

Anonymous with card with BOA: call the call center. Ask them why you were charged a late fee when it was not late. They are usually good about taking it off. I have noticed as a BOA cc customer that my 'due date' keeps changing. One week it 2/4, then next 2/3, and then another time I logged in it was 2/1. (Those are examples). I know pay my payments via online one week in advance. ALWAYS. I will not let them dupe me into a 'late fee' so that the remainder of my credit cards shoot to 29%. I paid off two credit cards are 24% (PayPal thru GE and HSBC. I have two cards - one that is at 1.77% until July 2009. I divorced in 2000 and when I did, because my ex didn't pay our bills my FICO was 231. My fico is now at 715. It took me a LONG time to do, but I did it first by opening a secured card, then had small unsecured cards. I have closed accounts, as my FICO score went up, that have hefty annual fees. One I do have a $59 fee but I have a larger credit limit - I pay for the fee just because if I close it, it will affect my FICO score. I believe that Congress needs to do something about all these banks being allowed to change whatever they want whenever they want. *I do know there are new rules that will be in effect but not until JULY 2010. Now if Obama is so worried about us, why didn't he change that to 2009?!!! My husband noticed a couple of his cards are requiring, instead 2-3% monthly minimum, a 3-5% monthly minimum. Of course, with NO NOTICE!!