Stealth tactics by creditors
Sep 28, 2002 | 11:45 am
#1
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Stealth tactics by creditors
Stealth tactics by creditors
http://sfgate.com/cgi-bin/article.cg...27/BU90639.DTL
Related:
Check Your Charge Card Bills!
http://www.kron4.com/Global/story.asp?S=952769
Includes video clip.
[This message has been edited by EPS (edited 09-28-2002).]
http://sfgate.com/cgi-bin/article.cg...27/BU90639.DTL
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">I called First USA to see if this was indeed the case, whether bill-paying customers were being given less time to hand over their cash than those willing to run up sky-high interest charges.
What do you know? It's true.</font>
What do you know? It's true.</font>
Check Your Charge Card Bills!
http://www.kron4.com/Global/story.asp?S=952769
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Is your credit card company pulling some sneaky new tactics that could cost you money? Credit card companies have been shortening due date for payments. It's just one of series of new tactics to make more money.
"Traditionally credit card companies are dropping [due dates] down to 20 days," says Ken McEldowney of Consumer Action. "The second one, which is even sneakier, is sending the bills out later in the billing cycle so you have a less number of days to pay than in the past."</font>
"Traditionally credit card companies are dropping [due dates] down to 20 days," says Ken McEldowney of Consumer Action. "The second one, which is even sneakier, is sending the bills out later in the billing cycle so you have a less number of days to pay than in the past."</font>
[This message has been edited by EPS (edited 09-28-2002).]
Sep 29, 2002 | 10:16 am
#2
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Credit card companies always treat their best customers (i.e. ones that carry high balances) better.
The article says they "punish" people who aren't as good of a customer. In reality, they treat better customers better. Just like every other business.
d
The article says they "punish" people who aren't as good of a customer. In reality, they treat better customers better. Just like every other business.
d
Sep 29, 2002 | 4:59 pm
#3
Join Date: Jul 2002
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on the other side, the customers, who carry high balance, should bring the creditor banks higher risk as well. is that right?
assumed those bankers are way smarter than me at this issue
I realize that the "higher risk" is actually minimum.
assumed those bankers are way smarter than me at this issue
I realize that the "higher risk" is actually minimum.
Sep 29, 2002 | 5:26 pm
#4
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by IAD-SFO-TPE:
on the other side, the customers, who carry high balance, should bring the creditor banks higher risk as well. is that right?</font>
on the other side, the customers, who carry high balance, should bring the creditor banks higher risk as well. is that right?</font>
This does remind me of the one case I have heard of there being a disconnect between the bank not treating you like a good customer and you actually being a good customer is in the case where you've got a person who never carries a balance (and hence is not a top performing customer) but has a very valuable bank account.
So you'd get a situation where you'd have a guy who had hundreds of thousands of dollars on deposit with the bank, versus some guy with 2 cents to his name and a high balance on his credit card. Excluding other factors, if they both lost their cards and needed a replacement, they guy with the high card balance would get one sent to him immediately by courier, whereas the guy with the great banking relationship who doesn't carry a balance would get one overnight or in the regular mail. I do know that banks have been working on this; both of these customers are "good" and ideally would be treated as such by the credit card side of the business.
d
Sep 29, 2002 | 6:55 pm
#5
Join Date: Jul 2000
Location: Sugar Land,Texas USA
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Now are we talking about the ppl who carry over higher balances? or ppl who have higher balances and pay it all off each month. of course CC companies would love to have ppl who have CC debt problems...but in the long run ppl who pay off their balances each month will actually be the better customer!
Sep 30, 2002 | 10:45 am
#6
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I've protected myself against the stealth tactics...
I use my bill paying service & have them send $100 to each of my cards that pull these tactics 2 or 3 days after my billing cycle closes.
This ensures that I meet my minimum payment due each month and I can send the rest of the payment anytime before the next billing cycle ends.
Mary
I use my bill paying service & have them send $100 to each of my cards that pull these tactics 2 or 3 days after my billing cycle closes.
This ensures that I meet my minimum payment due each month and I can send the rest of the payment anytime before the next billing cycle ends.
Mary
Oct 1, 2002 | 8:27 am
#8
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And then when they send you the change in terms, you notify them that you do not accept, they cancel your card (which is OK with me) and then your credit report is marked as account closed by credit grantor, and your score is lowered.
Both Fleet and B of A have done that.
Lesson to be learned - close the account.
Both Fleet and B of A have done that.
Lesson to be learned - close the account.
Oct 8, 2002 | 8:28 am
#9
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mary2e:
I've protected myself against the stealth tactics...
I use my bill paying service & have them send $100 to each of my cards that pull these tactics 2 or 3 days after my billing cycle closes.
This ensures that I meet my minimum payment due each month and I can send the rest of the payment anytime before the next billing cycle ends.
Mary</font>
I've protected myself against the stealth tactics...
I use my bill paying service & have them send $100 to each of my cards that pull these tactics 2 or 3 days after my billing cycle closes.
This ensures that I meet my minimum payment due each month and I can send the rest of the payment anytime before the next billing cycle ends.
Mary</font>
For example, if you have a balance on the 25th and your full payment is due the 20th, you will still have to pay a five-day finance charge on the balance.
Oct 8, 2002 | 10:39 am
#10
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[quote]<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Family flyer:
[b]
I've never been charged a finance fee. The minimum payment was made. I believe the rules state that if you don't make the minimum by the payment due date your account isn't subject to finance charges.
Mary
[This message has been edited by Mary2e (edited 10-08-2002).]
[b]
Originally posted by Mary2e:
While this strategy ensures the monthly minimum is paid, it does not address the outstanding balance.
For example, if you have a balance on the 25th and your full payment is due the 20th, you will still have to pay a five-day finance charge on the balance.
</font>
While this strategy ensures the monthly minimum is paid, it does not address the outstanding balance.
For example, if you have a balance on the 25th and your full payment is due the 20th, you will still have to pay a five-day finance charge on the balance.
</font>
Mary
[This message has been edited by Mary2e (edited 10-08-2002).]
Oct 8, 2002 | 4:01 pm
#11
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Banks may consider many balance-carrying CC customers as "good" customers, but they likely also consider high-spenders who pay their bills in full every months "good" customers.
The issuing banks earn money -- in some cases 3% -- of every transaction. If I spend $10K/monthly and pay it off in full, the bank still earns something over $3000 per year on my account. And the risk of a defaulted creditee is not there in my case for the bank.
The issuing banks earn money -- in some cases 3% -- of every transaction. If I spend $10K/monthly and pay it off in full, the bank still earns something over $3000 per year on my account. And the risk of a defaulted creditee is not there in my case for the bank.