Avenging Mortgage Losses On Good Credit Users

Originally Posted By SingleParkPassholder

<a href="http://www.consumerreports.org/cro/money/credit-loan/credit-cards/credit-cards/overview/credit-cards-ov.htm" target="_blank">http://www.consumerreports.org...s-ov.htm</a>

So, it turns out the banks are making up their losses on the mortgage crisis, due primarily to their predatory business practices, on their good credit card users who pay their bills on time and carry a balance.

I know this first hand because my brother, who used his cards to build up his FICO scores (more than kind of ironic), has now experienced what the linked article talks about.

My brother had always been a cash and carry conservative person, but when one gets married, wants to buy a house and get married, one's credit score does not lend itself to low rates. Long story short, he allowed four or five cards to run up a cumulative balance of about $35K. mostly home improvement purchases so he could refinance eventually at a low rate after he built up some credit. He successfully re-fied, but did not want to take cash out to pay off the cards so as not to be even close to being upside down as the market is shaky where he lives. So what happens? He accepts low interest rate cards when the offers arrive in the mail, transfers balances over, pays much more than the minimum, only to have the banks jack up the rates almost triple as described in the article. His is a single income household, and he accepted the idea he would pay a bit of interest as he paid them off over time to build up a FICO score.

He's got his FICO now, but at what price? He has about $10K to go, but the three cards remaining are all over 20% in interest when they all were in single digits two months ago. He can pay cash for whatever he needs as long as a crisis doesn't come up. We really feel for people who don't earn what he does (about $140K), and have more debt but have always paid, therefore doing nothing to deserve the this kind of treatment.

Mawnck said recently we need to regulate the snot out of some things, and this is why. When left to their own devices, private industry doesn't give a damn about the regular guy. Espousing such nonsense as less government doesn't account for the fact that companies will screw the regular guy first, second and third before doing anything else. Sorry Republicans, it's the Democrats turn in the White House.

 

Originally Posted By Mrs ElderP

I do NOT want to play the FICO game. I have a mortgage that I pay, on time (a fixed rate, it's always been fixed). I have no car loan. We are paying on Student Loans.

We have two credit cards, both Visas, one is primarily in my name, one in ElderP's. I use mine every chance I get and rack up my reward points, but the ENTIRE balance gets paid off EVERYMONTH. Every purchase gets entered into the checkbook and recorded just as if I'd made it with the debit card.

If the credit companies want to give me a less than perfect score because I'll work really hard to avoid paying them a dime intrest, well thats on them. I'm not interested in playing their game.

 

Originally Posted By queenbee

That's the problem Mrs. ElderP. It's not on them at all. It's on you. Your insurance rate, mortgage rate, even job prospects can all be affected by your credit score. They have way too much control. I'm with SPP and Mawnck, regulate the snot out of them.

 

Originally Posted By Mrs ElderP

With my tactics my score is in the low 700s. They recognize that I'm not going to walk out on them. Our mortgage is at 6.5%, and hubby DOES have a job that requires a credit check and he does just fine.

I know that with common sense tactics I can get a good score, I'm not interested in playing their games to get a GREAT one.

 

Originally Posted By Mrs ElderP

(And some regulation is certainly called for!)

 

Originally Posted By queenbee

You're right, of course, common sense can merit a good score. I don't think you should have to play the game to get a great score. This where more oversight of the industry could benefit the consumer. So, I guess we agree.

 

Originally Posted By DyGDisney

This topic made me look at my credit card statement to see what my interest rate is. I never carry a balance, just pay off every month and build up my Disney rewards.
My interest rate is still a very low 8.74, but maybe that's because I don't carry a balance?!

 

Originally Posted By Dabob2

<due primarily to their predatory business practices, on their good credit card users who pay their bills on time and carry a balance.>

...maybe even if you don't carry a balance.

I'm another guy who has always paid off everything, every month, and never paid anything in penalty or interest. I figured if I didn't have the money in the bank, I couldn't afford it. And I'd never paid the credit card company a dime.

Until last month. I've been paying online for a couple of years. They have my checking account linked in their records, and I just go online, check the box that says "pay entire bill", click yes, and then I get a screen that says "Thank you for your payment! You will get a receipt sent to your email address."

Now last month I paid the day before I went away for a week, so I forgot to check for the email receipt. Wouldn't you know, it didn't come. I am certain - I swear, I'm absolutely certain - that I got the "Thank you for you payment" screen. I've paid online countless times, and I know what to look for. But how can I prove that?

When I get home, I notice my checking account has $1500 more than it ought to have - the amount of the credit card bill. So I go online and discover that they didn't credit the payment, and charged me 40 bucks for not paying, plus another 20 in interest. Again, I know I got that "thank you for your payment" screen, but how can I prove it. So I figure I'm just screwed.

So I decide to pay the whole bill (last month and this) and get back to where I should be. Again, I get the "thank you for your payment" screen, but this time I be sure to check for the email receipt. One business day... nothing. Two business days... nothing.

I check online again, and still I "haven't paid." So I call (Bangalore), and a guy I can barely understand walks through it with me and finally it is credited properly (and my checking account is debited, and I get my receipt the next day).

I ask the guy what was wrong and he says "Perhaps just a glitch, Sir. You computer might have glitched. We can do nothing about that." I ask him "Have other people complained about this?" "Oh no sir, no indeed sir. Why do you ask?"

Okay. So MAYBE it was a glitch on my end (but for two months in a row, when I got the "thank you" screen each time?). I should have remembered to check for the email receipt, even while I was away. But something just smells fishy to me about the whole thing. It would not be the first time a bank has done things that amount to stealing from their customers, just hoping they don't notice. We had that thread not long ago about citibank doing that (and being fined, but NOBODY being prosecuted for it).

Regulate the snot out of them.

 

Originally Posted By DyGDisney

Maybe pay your bill by snail mail for awhile, just to be safe. Then at least you'll have a canceled check!!

 

Originally Posted By DyGDisney

Of course, they could not cash it and say you didn't pay.....

Maybe we, who only use credit cards to get rewards, should go to just using cash! That'll show 'em.

 

Originally Posted By mawnck

Nobody is forcing you to continue to use that particular card. ;-)

There are very few rewards programs that are actually worth dealing with a problematic CC company.

 

Originally Posted By Mrs ElderP

One scary thing on my Citi bank Disney Visa, the one I use the most frequently is that they use some sort of funky interest system where interest lasts for two months.

So, if I ever don't pay the bill in full, in say, June, then in July even if I pay the bill in full again (catch up, so to speak) there will still be interest charges on my August bill. As a matter of fact, I *think* that in order to get them to stop charging interest from the moment I make a purchase I have to pay the bill off, not use the card for a month, and then resume again.

Crazy!!

I have had positive experiences with customer service though, disputing a charge. They took off the $2 fee just because I called and asked them to. It may have helped that the charge was only a whopping $2.

 

Originally Posted By mawnck

>> I *think* that in order to get them to stop charging interest from the moment I make a purchase I have to pay the bill off, not use the card for a month, and then resume again.<<

You should be good if you pay it off 2 months in a row.

 

Originally Posted By Elderp

I am in the regulate the heck out of the credit companies. I hate having a credit score. I don't mind it for the purposes of having a loan, but now it affects everything. Also when you call the reporting agencies they treat you like dirt. If something bad goes on your credit it takes forever to get it cleared and your credit score never really goes back to what it was before. If a number like that is going to affect my life soo much than I think it needs to be controlled by the government. On the other hand it's a catch 22 because I don't really trust the government to handle such a number like that. Basically, when it comes to credit, if you are in position where you need it, your in trouble.

 

Originally Posted By Mr X

***But something just smells fishy to me about the whole thing. It would not be the first time a bank has done things that amount to stealing from their customers, just hoping they don't notice. We had that thread not long ago about citibank doing that (and being fined, but NOBODY being prosecuted for it).***

I've no doubt you might have been the victim of some shenanigans. That Citibank story just goes to show you can't trust em (even the big "prestigious" ones).

If I were you I would demand a refund of the interest and penalty fee they socked you with. With your record of spotless payments, along with perhaps the threat of getting the police involved (that's what I'd say), I'll bet they'll quickly give you back your sixty bucks.

Unfortunately, in most cases like this people just figure it's too much bother for so little money. But the problem is, THAT'S what they're counting on!



One cool thing about living in Japan is that, since they've never had a checking system here, they've got all kinds of ingenious ways for folks to pay for stuff. One cool method they have is that you can pay all your utility bills and credit cards at any convenience store.

You just walk in and pay cash (you get a reference code off the computer, or by phone if you want I suppose), they punch it in, you pay, and you get a certified, stamped receipt.

Not too easy to argue the "you didn't pay this month" angle with that kind of proof in hand.

 

Originally Posted By Mr X

***If a number like that is going to affect my life soo much than I think it needs to be controlled by the government. On the other hand it's a catch 22 because I don't really trust the government to handle such a number like that.***

Er, yikes.

No thanks. I'll keep it in the hands of private, slightly smaller entities thanks (bad though that might be).

As though we aren't living in 1984 enough as it is! ;(

 

Originally Posted By Mr X

Anyone else think if Orwell had gone with 2024, we'd be living the prequel right now?

 

Originally Posted By ChurroMonster

Anyone unhappy about credit card companies should take a look at short-term lending institutions such as CashCall. They charge upwards of 250% interest on their loans. That means if you borrow a thousand dollars and make $100 payments for two years you will still owe almost the entire balance. Plus interest. It's loan sharking and it's legal. Yeah, regulate the snot out of financial institutions.

 

Originally Posted By Dabob2

I could never figure out how outfits like that got around the usury laws, which I thought still existed. Maybe DeLay's congress quietly changed them? It wouldn't shock me.

 

Originally Posted By ChurroMonster

Allegedly they get around those laws by using small banks in other states. Not sure if that's true but there must be a loophole somewhere.