Credit Debt Help

10 Reasons to Love Your Credit Card Bank
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Call me an extremist. A few issues ago I wrote to you with "10 Reasons You Should Hate Your Credit Card Bank". In this issue I will point out the other side. Boy, the banks are going to love me for this; too bad they won't be sending me a check!

Love 'em, hate 'em, it's the same old story. Credit cards themselves are not bad. There are advantages and disadvantages. This time I want to take a look at some of those advantages...

By the way, please take the survey when you're finished--thanks!

1. Access to money
By being able to use your credit card you can actually save money! Here's an example from my personal life. My dentist gives a 5% discount if you pay at the time of service. Because I can pay with my credit card I get the 5%. Even if I paid interest on this amount, at 10% APR I can still take 6 months to pay it back and break even!

2. Protection from merchants
When you buy stuff with your credit card you are very protected. For example, if a merchant won't give you a refund for a return you can always contact your credit card bank and dispute the charge. The bank will probably decide in your favor and chargeback the merchant. The merchant would have to take you to court to fight further. On the other hand, if you paid cash instead of using your credit you would have to pursue the matter in court with the merchant.

3. A chance to build a positive credit history.
You must have a good credit history in today's society. Many people look at your credit report to judge you so it's vital that your report is the best it can be! Potential employers, insurance companies, mortgage companies, and many more will try to get an idea of your character from looking at this information. Having a credit card and using it wisely will help create that positive history.

4. Other perks and cash back rewards
There are many cards that actually pay you to use them. They provide a cash-back bonus or other reward. If you can take advantage of that reward then you can actually save money.

5. Warranty protection
Some credit cards will extend the warranty of an item purchased with that card. Contact your credit card companies to learn about these benefits so you know which card to use when purchasing that new computer.

6. Money in an emergency
If your car breaks down late at night you may not be able to get an ATM machine or your personal bank. However, by having a credit card you'll have access to the money you'll need in these tense situations.

7. Better deals than other loans
So many banks, so few good customers. They are fighting for our business! You may be able to get better rates from your credit card bank than from a personal loan or auto loan. Right now I have four, count 'em, four banks that are offering me 0% until near the end of this year!

8. No chance of losing cash
If you lose your wallet you've lost your cash. If you have $100 in there, it's gone. If you carry little cash and use credit, then, if you ever lose it you can call the credit card bank and report the card lost and you won't owe a dime. The bank loses the money, not you, HA HA!

9. Better than a debit card
If someone steals your debit card information they may be able to steal money from your accounts. If that happens, your checks will bounce and you'll have to deal with each place you wrote a check too plus the bouncing fees from your bank. You'll have to fight to get your money back. If someone steals your credit card then you would call the credit card bank and tell them cancel the account and you wouldn't be responsible for the charges that you didn't make. That's the risk banks take for the profit they make. Hey, that rhymes.

10. Customer service 24/7
Most credit card banks have reps there 24/7. That's great because you can deal with them at your convenience. If you pay your bill late Thursday night, and you have a question, you can talk to someone. Granted that you'll be dealing with their voice menu for a while before you speak to a human, but you will eventually speak to one. :-)

For free information about how we can help you reduce your debt, please fill out our form.

10 Credit Myths
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

As they say, "Knowledge is power." Many times people either act on false information or fail to act because they didn't know what could be done to their benefit. This is the case in many areas of life, but on the top of that list is money. And in the money category you will find lots of misinformation about credit.

There is so much to talk about on the topic of credit myths that an entire book could be dedicated to it.

Myth #1: I'm a complete financial loser for getting myself into this mess.

Fact: It may be true that you're responsible for getting into debt but that doesn't make you a loser. In fact, it may not be your fault at all. As long as you start working on becoming more knowledgeable when it comes to finances, you will ultimately find success in controlling your debt.

Myth #2: Credit is what got me into this mess.

Fact: Spending is what got you into debt. Credit was the means to spend. If you're problem is spending then very well may have spent all your cash. However, credit cards may make it easier to spend.

Myth #3: There's nothing I can do about it now. My credit is destroyed forever!

Fact: As long as you work, starting today, to rebuild your credit, you'll eventually get it under control. Rebuilding your credit means: (1) Paying on time; (2) Looking for better credit options; and (3) Learning more about money and credit.

Myth #4: If I cosign a loan for my friend, it has no affect on my credit.

Fact: When you cosign a loan it's like you took the loan on your own! It may be true that your friend is the first one responsible for the loan, however, if they default it's completely your problem.

Myth #5: It's fine to give out my credit card number for identification as long as I don't authorize a charge.

Fact: NEVER give out your information as a form of identification. When it comes to giving out any personal information, be sure you know exactly with whom you're speaking. This is especially true when someone on the phone.

Myth #6: If I pay off an old debt it will be removed from my account.

Fact: Most likely, no. In fact, when you pay past-due debts it restarts the time period that it can be reported in your credit history!

Myth #7: When I get divorced my "X" will owe half the debts.

Fact: If your name is on the account then you owe the money! If you have a joint account and your ex-spouse refuses to pay, even if you've agreed they would, then you're next on the collection list.

Myth #8: The government owns the credit bureaus.

Fact: Credit-reporting-agencies are not owned by the government. Although, there are many laws that dictate how they must operate.

Myth #9: I cannot change the information on my credit report. It's set in stone.

Fact: You can change the information! The Fair Credit Reporting Act outlines that information that's not 100% accurate or cannot be verified with 30 days, must be removed.

Myth #10: If I get in debt too deep I'll just file for bankruptcy protection.

Fact: The bankruptcy laws are changing to make it more difficult to eliminate all your debt in a bankruptcy so you may end up paying much of it back anyway. It will also be on your credit report for 10 years! Hey, if you have NO OTHER OPTIONS then you should certainly investigate bankruptcy. However, it's much better to settle the debts if you can.

For free information about how we can help you reduce your debt, please fill out our form.

10 Reasons You Should Hate Your Credit Card Banks!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Buying a house forces you into debt, going to college forces you into debt, buying a car forces you into debt, if you don't have a credit card then you don't exist because you don't have a credit history. We just can't win.

And when you finally get some debt, the credit card banks are right there to take advantage of us! I've had enough! I'm sure you have too, so please tell me your story in the survey.

1. CRAZY HIGH-INTEREST RATES
Believe it or not my friend recently received a credit card offer through the mail with a starting interest rate of 35%. I can do better with almost any loan shark! Oh yeah, that bank IS a loan shark--depending on your definition of "is."

2. CHANGING THE TERMS WITH FINE PRINT
Ever notice that the bank's letters that encourage you to use your credit are in BIG BOLD letters. You know, the letters that say, "go on vacation," "write yourself a check," "buy a new wardrobe," but the letters that try to get you to give up your rights are in microscopic small type?

What are they hiding?

They're raising their late fees, getting you give up your right to bring them to court, jacking-up your interest rates, and much more!

The worst part is that these "amendments" are "negative response." That means that if you don't tell them that you don't want the terms, then you're agreeing with whatever they sent you.

It's like those music clubs. You know the ones. You pay 1 cent to join and get 12 CD's. The only catch is that if you don't tell them not to send the monthly selection they send it automatically and bill you! It's like making a deal with the devil!

I'd love to do business like that! I'll just ship you a television, and if you don't return it I can charge you! Real easy to get the sale isn't it?

I guess if you happened to die while the letter is in the mail then it's a guarantee you'll agree since there's no way to respond. If the banks had it their way they'd probably try to bill you in the afterlife.

3. BAIT AND SWITCH
You know those pre-approved credit offers you receive in the mail nearly everyday? Well, they're really not "pre-approved." Check the fine print. They always have some words that allow them to weasel out of giving you the card that you think you're applying for.

The offer may say, "0% for six months, then 9.9% fixed, with no annual fee, and $5,000 credit limit." Then you get the card and it's "6.9% for 3 months, 29.99% variable, $50 annual fee and $400 credit limit."

What happened?

Re-read the fine print in the original offer and you'll find the tricky legalese that says something like, "Ha, ha bet you can't read letters this small! We don't have to approve the pre-approved offer and can therefore send you any card we wish."

4. PENALTIES FOR BEING LATE TO OTHERS
You'll love this one! Many credit card banks have changed their policies so they can raise your rates, no surprise, but check this out. Some will raise your rate to 23% if you're late paying your electric bill. That's right! They check your credit file and if you are late paying any other bills, not just theirs, they slam you even more!

5. DECEPTIVE OFFERS
Even when you read all the fine print they can STILL do whatever they want. They'll send you credit offers and say, "you can use all your available credit" and when you do they'll charge you a penalty fee! Then when you call to complain they'll tell you that you're an idiot that doesn't have any common sense. See my article "Chase Bank Tries to Pull a Fast One."

6. CAN'T EVER SPEAK TO A HUMAN
Just try calling them to check on your account. It's takes forever to speak to a human! They always want you to key in all the account information, all the numbers, then when you finally talk to their drones they ask you for all that information again! Why the hell did I enter it in the first place!

I can get around this by hitting "0" then the "#" keys. I get a reply, "We cannot recognize your account number so please be tortured again by reentering it now." I keep hitting the "0" and "#" keys until the recording gives up and says, "Please hold while we transfer you to one of our new hires who probably cannot help you anyway."

Hmm, It's almost like they don't want you to talk to anyone...

7. BANKRUPTCY LAW HYPOCRISY
Here's another good one. The banks have lobbied Washington to change bankruptcy laws to make it more difficult to dissolve debts in bankruptcy. They want the consumer to be more responsible for repaying their debt!

Let's see. Who gave the consumer making $10,000 per year a $50,000 credit line? Who sent that consumer letters saying, "go on vacation, give a check as a present this season, buy a new wardrobe."

Give me a break. These banks want to have it both ways. It's just as much they're responsibility for making us able to get into debt.

Do you think they'd be in favor of a 3-day waiting period to give credit cards? How about the government has to call the consumer to verify that they can really afford to use the credit line? Think the banks would like that!

8. STOP YOU FROM GETTING A JOB OR HOME
If you have a problem with your credit card bank they're going to report this in your credit history. Everyone looks at your credit history. Landlords review it to see if you will be a good tenant, insurance companies look at that report, and employers also review your credit history.

What happens when the creditors make a mistake? A mistake that makes you look terrible to potential employers and landlords? Oops, not their problem. It's your responsibility to find and correct their error.

I bet many people have been turned down for jobs and are paying more for their insurance because of a mistake in their credit report that a bank made years before!

9. FEES, FEES, FEES
Late fees, overlimit fees, annual fees, bla, bla, bla. And they're going UP! It's like being robbed at gunpoint in an alleyway by a guy in an Armani suit!

Come on, give me a break! Does it really cost the bank $35 if you're late by one day with your payment? I doubt it.

Actually, you may not have been late at all. The bank may have just credited your account late and charged you anyway. see the article, "One Day Late--Yeah Right!" to read more about this.

Banks make 47% of their revenue from fees! Don't ever let a fee go. Call the bank and make them waive that fee, and if they don't, PUNISH them by doing business with another institution.

10. CREATE MORE WORK
I remember as a kid when my parents brought in the mail. I used to ask, "Is there anything for me?" What's was their response, "No, only bills."

Freakin' bills! That's all that's in the freakin' mail. And you have to read the details or they'll freakin' get you!

CONCLUSION
The only way to fight back is to use one bank against the other. They need our business so we need to reward the banks that are good to us and punish the ones that take advantage of us.

Banks are a business like any other. They're job is to service you and I. If we don't like they way they treat us then it's time to do business with another bank! Don't ever be "brand loyal" unless that bank has been "customer loyal." Meaning that they've always given you their best rates and service!

For free information about how we can help you reduce your debt, please fill out our form.

An advance payday loan isn't really the best thing, even if you get behind. What's a better idea for a short term loan is to get a credit card, assuming you have decnt credit. If your credit isn't terrible, you can get a reasonable rate for it, sometimes starting at 0% apr. Then you can charge some of your expenses, and though you'll still be in debt, you won't have to worry about the terrible rate that comes with an advance payday loan.

Those loans can cost you 15 percent or more, and for what? Just to get a few days early the money you'll be getting anyway? Forget it. What a ridiculous idea. If you're starving – I mean, seriously physically starving – I can see the advantage of advance payday loan, but otherwise, it's usually no worse than the alternative. It makes more sense to pay the rent late, or the utilities late. That is, unless you are about to get evicted, or have your utilities shut off. Then of course, get an advance payday loan, and get one now!

advance payday loans are usually the weapon of last resort for the very poor and destitute. If you are almost on the street, down to your last dime, then an advance payday loan could make sense and help you at least stay on your feet a little longer, but really, sometimes things get so bad that there's just no stopping them from getting worse. Of course that attitude is of very little consolation if you are the one who is very broke and about to get your house repossessed or your car auctioned, or even your kids taken away.

If you are broke, before you get an advance payday loan, think of your other options. It is always good to consider your support network – your friends and family, and what they might be able and willing to do for you. Even someone you haven't talked to in years might be more than willing to bail you out rather than see you fall through the cracks. I know it is humiliating to have to ask for help like that. I know, because I have been there, but really, it is much more humilliating to be completely destitute because you lost 15% of your monthly earning using your advance payday loan, and are now out on the street. There's no reason to let yourself fall through the cracks like that, when help is around the corner. Also, you can use food banks and free meal programs to help you save money if you are really broke. Most cities have these programs.

5 Ways to Avoid Holiday Debt
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Between Thanksgiving and Christmas people are going to spend $121.4 billion using their credit cards!

The key is not to let this debt stick, not to allow yourself to get buried by that debt. Not ending up spending the next year paying off the purchases from this holiday season.

How are you going to pay for the gifts? Credit cards of course! I'm sure many people are going to criticize me for even suggesting such an idea.

I can hear it now, "Scott, are you crazy? Don't use your credit cards USE CASH! I thought you're the anti-credit-card guy?"

I'm not the "anti-credit-card" guy I'm the DebtSmart guy. It's not the credit spending that going to put you into debt. It's the "spending."

If you're going to spend $1,000 then it doesn't matter what you actually use to pay that $1,000. You can use cash, credit, or a check. Once it's spent it's gone!

The key is to be smart about how you pay and using your credit cards is very smart. There are many reason to use your credit card for shopping here are a few:

* Interest-free grace period
* Purchase protection (ability to do chargebacks)
* Building credit worthiness
* Automatic extended warranties (on some cards)
* If you lose your cash it's gone! If you lose your credit card, and report it right away, you don't lose any money.
* You may be able to get additional discounts.

What keep you out of trouble is that you stick to a plan. If for example you plan to spend $100 on a television and end up spending $200 only because you can use that credit card--that's when you'll be heading for trouble.

Over the years I've been following a few easy steps that have helped me enjoy the holiday season without having to worry about its cost. It's my hope these suggestions can also help save you money as well.

1) Decide how much you can afford to spend. This is clearly the most important step. Before heading to the store you must know the total amount you can afford to spend. Total spending for all gifts.

The average amount people spend is around $1,000. That also falls right in line with the response from DebtSmart readers who participated in our survey on 10/24/01.

It's not the amount you spend that counts it's just important to know your holiday spending limit.

When thinking about your limit keep in mind how much you would pay if you only were going use cash. How much money can you have available to pay for holiday spending when the bill arrive in January?

2) Make list and stick to it. Now that you have a dollar limit in mind you can start to make your list. We have been using an Excel spreadsheet to help with our list.

I created a scaled-down version of this spreadsheet for your use. You can get it at: http://www.debtsmart.com/pages/holiday.xls

The spreadsheet lists everyone on our gift list and card list. It shows the person, gift, and cost. The "Star" column indicates if the person still needs a gift. If there is a star by their name then they're gift has been purchases. Once you enter a number in the cost column the star disappears.

Enter everyone into the worksheet, or if you don't have Excel simply create a list by hand, and estimate how much you want to spend for each person by enter a dollar figure in the "Estimate" column.

After you done with these estimates check the estimate total. That total should not exceed your original holiday spending limit. If it does you'll need to go back and make some adjustments.

Every year we update the list and make a printout. We carry that print out around starting in September just in case we find something on sale that will make a great holiday gift.

Refer to your detailed estimate list while shopping. Stick to the numbers on your list and you'll be sure not to go over your original holiday-spending limit.

3) Contact creditor for best deal This is the best time of the year to make your credit card banks beg for your business! Many people feel at the mercy of their banks but that's not the case. The banks are at our mercy.

Undoubtedly you have a few credit cards and now is the time for them to fight for you to use them this holiday season.

Give each bank a call and let them know that they're going to have to give you a deal or you won't use their card this year. Tell them you want 0% for 6 months on purchases or else you'll use another card that will give you that deal. See what happens.

I find that 50% of the time I'm able to strike a deal with one of my credit card bank. If they don't then I simply use another card!

Give them a call right now!

4) Take advantage of department store card deals and transfer balances Again I hear people saying I'm crazy for using a high-rate department store card! And again I say that you just need to be smart about doing it.

Every year I get offers from many department stores for discounts if I use their card. Discounts that are 10%, 15%, or more!

I do use these discounts however, I'm sure to transfer my balance from the high-rate department store card to the lower-rate credit card before any interest is charged. This way I can take advantage of the discounts plus get low-cost financing (if needed).

5) Pay off the card in full when the bill arrives (if possible) Ideally you should pay off all credit card charges, in full, when the bills arrive. If you stick to your plan then you'd have spent within the holiday-spending limit. This limit should have been based on how much money you'd have to pay the bills when they arrive so, in theory, it will be easy to pay everything off right away.

Of course, this doesn't always happen for many reasons like unexpected car failure for one.

That's why it's important to use a credit card that's going to give you a few months with no interest on purchases. This way, if something does delay your ability to pay in full right away you can have a little time, at no additional cost, to pay off those charges.

Is it worth all the work?

Yes indeed! Say you spend 3 hours of your time juggling all the transaction, doing the balance transfers, and calling your banks. Most likely are you're going to save at least $60 by be being DebtSmart so that's $20 per hour!

Is it worth $20 per hour?

I think so.

For free information about how we can help you reduce your debt, please fill out our form.

One day late, yeah right!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

I knew it, I knew it, I knew it!

A couple years ago most credit card banks changed their policy of what "late" means to meaning "one day late is late." It used to be that late was if your payment was due on the 1st but received on, say, the 20th. Not anymore. If you're 24 hours late, it's late, and you will be charged the late fee. Late fees have also been rising and some are now as high as $35!

What did I know?

I had the feeling that since being one day late means that banks can charge a late fee, it's possible that, well, payments could "accidentally" be held for say, oh, 24 hours. Oops, you're late!

My theory was a step closer to confirmation when one of my credit card payments was exactly one day late. I always track everything--every check, every payment date, and all transactions. I use Quicken and other custom software I developed to pay my bills. So when I was late by one day I took a look at the date that bank's check was mailed.

Guess how early I mailed the payment?

Seven days!

The 8th day was the late day. I called the bank and told them that they'd better waive that fee or I would transfer my balance and close the account. They did waive the fee for me, but I wonder how many other people don't call to waive these one-day-late fees?

I wonder how many people simply pay the late fee because they figure "I was late." Being exactly one day late has happened to many people I know. I asked them if they called the bank to complain and they said that they didn't because they thought they were actually late.

Tell you what, being one day late isn't worth 35 bucks! There is no way that it costs the bank $35 for someone to be one day late.

The way I see it is that it's like being mugged in an alley!

As it turns out my theory is even closer to confirmation. Look at those small slips of paper with fine print that come with your statement. Many of those papers are lawsuit notifications from banks that are accused of "not crediting payments promptly," and charging late fees.

The funny thing is that in these class action lawsuits, when the smoke clears, the lawyers get paid millions and most of us only get back a few cents! Every case that I'm involved in, because I'm a cardholder, has been settled without the bank having to admit any wrongdoing.

What can we do?

Be sure to look at every charge on your credit card statement. Don't let the bank get away with charging you a late fee. I don't care if it's really your fault for being late!

First of all, it doesn't matter because $35 is a rip-off for being 24 hours late. And, second of all, the bank should treat you like gold for being a good customer, and should waive at least one late fee as a courtesy even if it IS your fault.

For free information about how we can help you reduce your debt, please fill out our form.

The new bankruptcy law, which went into effect on October 17, 2005, states that before filing for bankruptcy, one must enroll in a credit counseling program.

Christian Financial Consultants can provide eligible credit counseling. In fact, with our credit counseling, debt settlement, and debt consolidation programs, we may be able to help you avoid bankruptcy completely. When you file for bankruptcy, it stays on your record for 10 years -- making it difficult to get a loan, find a job, or even rent an apartment. For this reason, it has always been a good idea to try debt settlement and debt consolidation before considering bankruptcy filing.

Learn more about our credit counseling, debt settlement, and debt consolidation programs. Fill out the form on the righ side of this page for a free bankruptcy credit counseling session.

Chase Bank Tries to Pull a Fast One
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

I knew it would happen! I read all the fine print. I reviewed every detail! I followed the instructions from Chase Bank exactly as they described in their low-rate-offer letter and they still penalized me!

How did Chase Bank attempt to trick me and maybe you? I strongly recommend that you read this entire article if you have ever done a balance transfer or you're thinking about doing a balance transfer!

It all started with one of the best credit offers I have ever received. A surprising 0% APR until February 1, 2003 with a one-time fee for each transfer of 4% of the amount transferred, up to a $50 maximum. According to the letter, "These checks may be used for any amount, up to your available credit line."

This offer was received in January which meant 13 months of 0% on my entire credit line of $12,500 (which is available) for a one-time fee of $50. That's a true APR of approximately 0.37%!

I wanted to take advantage of this offer for many reasons.

1) I wanted to see if what they promise in their letters is what they actually deliver when the bill arrives, and report the results to you, my dedicated readers.

2) My money market is getting 2.5% and the loan is costing 0.37%, so I'll be making about $250 over the course of the year for simply paying my bills on time.

3) This offer was slightly different than any transfer offer I've been interested in taking advantage of. It promised that I could use my entire credit line and implied that I can do this without penalty.

I checked and rechecked the letter for any loopholes. I read all the fine print, to be sure that I was using their transfer offer within all the rules described in the letter. Everything seemed to check out, so I went ahead and wrote myself a check for $12,500 and deposited it into my money market account.

When the bill arrived I noticed an overlimit fee of $29 assessed on my account--I KNEW IT! I had a feeling that they left out a few words in their letter that, of course, loophole their way to earning more money.

I followed the directions described in the letter which stated, in three places, that the check amount(s) cannot exceed my credit line and I was still charged an overlimit fee.

I've written about this type of "trick" in a previous article titled, Reading the Fine Print in Those Low Rate Credit Card Offers, however this case was slightly different. The credit offers I was referring to at that time stated in the body of the letter that you can use "any amount up to your available credit line." But in the fine print the letter warned, "You may transfer any amount, including transaction fees that are assessed, as long as it does not exceed the available credit line." Check out the Citibank offer I received that does this exactly.

The offer from Chase however, did not provide that warning. Every mention in the Chase letter about the amount you can use, the total "check amount(s)" is that it can go up to your available credit line.

Compared to the Chase offer, the Citibank offer tries to trick you in the body of the letter, but is at least honest in the fine print. In fact, the fine print in the Chase letter is even smaller than the fine print in the Citibank letter! As my editor Rick said, "It's as though Chase is trying to deceive people more than Citibank."

As soon as I saw that overlimit fee, and reviewed the original letter to make sure I didn't miss anything, I promptly called Chase Bank to have them remove the overlimit fee, which they did immediately.

When I asked why I was charged the overlimit fee, the rep told me it's because I was over the account limit since the $50 transfer charge plus the $12,500 check makes my balance $12,550.00. I explained that the Chase letter stated that I could write the check up to my limit and the rep (Ms. Beers) started arguing with me. I asked to speak to her supervisor (Mrs. Lett) and she also argued with me.

I originally thought they would just waive the fee and apologize for the confusion. I thought they would say something like, "Mr. Bilker, we're sorry that the wording of the letter was confusing. I can certainly understand how you feel. I will certainly bring this to the attention of my supervisors and management so we can review these details. Thank you so much for calling!" Then they could have hung up and forgot about my call--but that didn't happen.

Below are links to portions of the conversation I had with Chase customer service.

Part 1: First rep removes the overlimit fee and argues about the fee.

Part 2: Supervisor argues about the fee.

It may be true that they said I could use the check(s) up to my credit limit. And it may be true that the agreement says that if I go over my limit I have to pay a fee. One could argue that if they told me to write the check(s) up to twice my credit limit, and I did, that I should be charged an overlimit fee because it goes over my limit. The letter could have said to jump off a bridge and if I do it’s my stupidity. However it is certainly implied that if they're sending me a letter, and I follow the directions in their letter, I will not be penalized.

It's clearly stated that if you write a transfer check there's going to be a fee. However, their letter never said that if you write the check to the account limit an overlimit fee will be charged.

This encourages people to write the check up to the maximum limit. Chase never mentioned anywhere in the letter, not even in the fine print, that there would be an overlimit fee if you do as they say and write the check up to the limit.

One good analogy is to imagine a policeman telling me I can go through a stop sign. He says, "Scott, go through the stop sign." So I go through the sign and the same policeman immediately pulls me over and gives me a ticket. I say, "But you told me I could go through the stop sign." And he replies, "It’s common knowledge that it’s illegal to go through the stop sign. Didn’t you read the driving handbook?"

Chase Bank, the policeman of their terms, said to "write the check to the limit" then when I did they penalized me, and probably countless others, who may not have even seen the overlimit charge on their statement. Or maybe they did see the charge, then called and were told they were stupid for going over their limit. It brings to light the fact that you cannot trust what their letters say.

The bottom line in this situation is that the letter is very deceptive. It leads people to believe that they can write the checks up to the credit limit without penalty.

When I called Chase I didn’t have to ask to have that overlimit fee waived. As soon as I mentioned that it was on my statement the rep removed it instantly! If they really believed that I was completely at fault they may not have done this so quickly. Also, the rep and supervisor seemed well versed in arguing their points and my guess is that it’s because they have had practice or training on the topic.

How many of you have had this, or a similar problem? Especially if it was from this very same low-rate credit offer by Chase bank. Let me know if this has happened to you, and please, let me know if you agree or disagree with my position on this issue by filling out the response form.

Lastly, aside from this situation, my past experiences with Chase have been very good. They have always offered me nice lending deals. Giving them the benefit of the doubt, I would hope that this particular situation occurred only because of these specific reps. I would hope that Chase reviews EVERY person's account that took advantage of this offer to be sure that they are not penalized--without that person having to call them first!

Part 1: First Rep removes the overlimit fee and argues about the fee.

Rep: "Card member services. This is Ms. Beers, how may I help you?"

Scott: "Hi, what was your name again?"

Rep: "Ms. Beers. How can I help you today?"

Scott: "Alright. Well I’ve got a question about my account."

Rep: "Okay, let me have your name."

Scott: "Scott Bilker."

Rep: "Okay Mr. Bilker, how can I help you today?"

Scott: "Okay, umm, why do I have this overlimit fee?"

Rep: "Because you are over your limit."

Scott: "Okay. How did that happen?"

Rep: "You did a balance transfer for $12,500."

Scott: "Yeah."

Rep: "Also there is a balance transfer fee of $50."

Scott: "Umm hmm."

Rep: "And that took you over your credit line. Your credit line is only $12,500."

Scott: "Right. Okay well, you see I think that’s an error because I have the letter from Chase. You know I used one of these balance transfer checks Ms. Beers. It says these checks maybe used for any amount up to your available credit line. What was my available credit line before I wrote that check?"

Rep: "Up to. Your credit line is only $12,500 sir."

Scott: "Yes, but these checks may be used for any amount up to your available credit line. My available credit line was $12,500, I wrote the check for $12,500."

Rep: "That’s the credit line sir, and of course you know you are going to go over your credit line. You can’t take it all off of there, you’ve got to leave something there for the fee…"

Scott: "Uh, listen…"

Rep: "Also for the finance charge. I did give you back the $29 overlimit fee."

NOTE: Notice how she removed the charge without me even asking!

Scott: "Okay."

Rep: "It’s already been deleted. But you should have left a little room there for finance charges and also for the fee."

NOTE: She keeps blaming me for following the directions in the letter!

Scott: "Don’t you think the letter should say ‘You should leave a little room there. You shouldn’t write the checks up to your credit limit, maybe up to your credit limit minus the fee.’"

Rep: "Okay, but the fees are in the letter also."

Scott: "Yes, but it says these checks may be used for any amount up to your credit line. Doesn’t that give you the impression that you can write the check, well, up to your available credit line?" (Pause) "Hello?"

Rep: "Sir, it’s in the letter. Okay, again you used your whole credit line, of course you are going to go over your credit line if…"

Scott: "I know, but I am just concerned about the wording. I mean, if it said…"

Rep: "Mr. Bilker, if you weren’t sure about how much you should use on the checks you can always call us, 24 hours."

NOTE: No need to call because the letter said I can write the check up to the limit.

Scott: "Right. Well it was very clear, I mean it said up to the credit line. I know you removed it and I appreciate that, but I just want a little clarification of the writing there. Because, you know, I don’t know what to believe anymore. I mean, it said…"

Rep: "Sir, you wouldn’t take your whole credit line. If you know your credit line is $12,500 and you go over that, and you take that whole amount it is going to go over."

Scott: "It doesn’t…"

Rep: "You can go 'up to,' and you should never take the whole credit line because, yes, you will go over and receive the $29 fee on that."

Scott: "I just don’t see where it says that. Like even in the fine print here it says ‘balance transfer check amounts may not exceed your available credit line. It doesn’t say valid balance transfer check amounts and charges may not exceed. It says the check amounts."

Rep: "It told you not to exceed the whole credit line Mr. Bilker."

Scott: "Well, no. It says the check amounts, the check amounts, not the…"

Rep: "You go over the $12,500…"

Scott: "I didn’t. I wrote it for $12,500."

Rep: "Well, it’s $12,500, you took your whole credit line. That’s going to take you over the credit line."

Scott: "But it said I can use up to my available credit line."

Rep: "It says 'up to,' sir, it doesn’t say take the whole $12,500."

NOTE: Talk about double-talk!

Scott: "Up to means… Well you know what, I know you waived the fee and that’s great, but I’d like to talk to a supervisor about this."

Rep: "Not a problem, hold on."

Scott: "Thank you."

Part 2: Supervisor argues about the fee

Rep: "Mr. Bilker thank you for holding the account supervisor Ms. Lett is on the line. You may go ahead."

Scott: "Thank you Ms. Beers."

Rep: "Mr. Bilker this is Ms. Lett, how may I help you?"

Scott: "Hi. Well umm, I called because I used a balance transfer offer from Chase and umm, I got charged an overlimit fee. Although Ms. Beers did waive that overlimit fee."

Rep: "Umm hmm."

Scott: "But I’m just a little confused because the letter specifically states that I can use my checks up to my available credit, and that’s exactly what I did. I followed the directions exactly, but yet I was charged an overlimit fee."

Rep: "Okay. You can use the checks up to that, but with each check written there is a fee."

Scott: "Uh huh."

Rep: "So according to the amount you write, you include the fee."

Scott: "It doesn’t say what you just said."

Rep: "It doesn’t have to say it, it’s telling you that there is a fee involved."

Scott: "Yeah, but it says, let me just read this really clearly, it says, ‘These checks may be used for any amount up to your available credit line.’ In fact it says, at the bottom in the fine print, ‘balance transfer check amounts may not exceed your available credit line.’ Check amounts, it doesn’t say check amounts and fees."

Rep: "Right, the check amount cannot exceed your available credit line. However, it also goes on to say, ‘With each check processed there will be a transaction fee.’ So included with the check amount there is a transaction fee that you have to include. If you are going to write three checks, you write three checks that are going to be up to whatever your credit limit is. But in those three checks, remember, there are three fees. So its just common knowledge."

NOTE: Step one of their defense it to insult the customer. Don't you just LOVE these people. Way to treat your valued customers who don't have common knowledge.

Scott: "Common knowledge? Well, even on the fine print on the back it says balance transfer check amounts… This is right after the fees, it says, ‘You will be charged a balance transfer transaction fee,’ and it gives the amount, and afterwards it says, ‘Balance transfer check amounts may not exceed your available credit line.’ It does not say balance transfer check amounts and fees."

Rep: "It doesn’t have to. It’s explained and it’s outlined for you. If you know your credit line is $12,500 dollars, and they tell you that you are going to be charged a fee. And you write a check for $12,500 dollars, plus the $50 fee, you are now over the $12,500, because that is all that your credit limit is."

Scott: "But it just doesn’t clearly say that. How could this be common knowledge? That’s my confusion. It says, the directions…"

Rep: "Because if we tell you that you are going to be charged a $50 dollar fee. If you write a check for $12,500 and we have told you that we are going to charge you a $50 fee, $12,500 plus $50, is $12,500 and $50. Which means you are now over your credit limit. That’s what I mean by common knowledge. It’s simple math."

Scott: "Well how come that common knowledge isn’t included in the statement? See, the statement clearly says these checks maybe used for any amount up to your available credit line. Common knowledge tells me that…"

Rep: "Well okay…"

Scott: "That I can use it up to my credit line. It doesn’t say, not up to my credit line, it says up to my credit line."

Rep: "And when you use that check you’re charged a fee."

Scott: "Yes, but it doesn’t say…"

Rep: "Well, that’s included with the amount of the check."

NOTE: The fee is not "included with the check" it's a separate charge.

Scott: "Well, shouldn’t it say not up to your available credit line, or close to your available credit line? Wouldn’t that be a little more clear?"

Rep: "I guess it’s the way you interpret it."

….

Rep: "It is your interpretation Mr. Bilker. Unfortunately, you did not read the entire thing, or did not understand it."

NOTE: Still blaming me for their deceptive wording. I wish I had that Citibank letter handy when I called so I could have asked Mrs. Lett to explain why Citibank clearly explains to keep the total of the fees and transfers under the available limit.

Scott: "Where in this thing does it tell me I cannot write these checks up to my available credit line?"

Rep: "It doesn’t tell you that you can’t. We can’t tell you what you cannot do."

Scott: "Listen, it says...‘These checks may be used for any amount, up to your available credit line.’ It doesn’t say these checks and fees. These checks may be used for any amount. And listen, again, at the bottom, balance transfer check amounts, it doesn’t say balance transfer and fees, just balance transfer check amounts, may not exceed your available credit line."

Rep: "It doesn’t have to say ‘and fees’ because the fee is already included with the amount that you write."

Scott: "Hmm, really it sounds like some kind of trickery to me."

Rep: "And again that depends on your interpretation."

Scott: "Hmm, I wonder what a legal interpretation might be? Like disclosure interpretation."

Rep: "We have a lot… Everything we submit goes through a legal ramification before it is ever sent to you. So, obviously it must be legal. This is a major bank. And they have a lot of lawyers…"

….

Rep: "When it says to me that if I write a check up to my limit and I am going to be including a fee, and I know that my limit is a certain amount. If I’m going to be charged a fee, I know already that I’m going to go over my limit. If my limit is $10,000 I’m going to be charged $50, I know my limit is $10,000 and my balance is going to be $10,050. I already know that."

Scott: "So, all those extra words you just told me should basically be included in this letter?"

Rep: "There is nothing extra that I told you. I added it."

….

Rep: "If you can add, then you don’t have a problem with that."

NOTE: The blame-the-customer-defense continues, now I can’t add.

….

Scott: "But it does not tell me, if you write the check up to your limit, then you will go over you limit. You cannot write your…"

Rep: "It doesn’t have to."

Scott: "It doesn’t have to! How do you…"

Rep: "We give you your credit limit, if we tell you that your credit limit is $12,500. We tell you that you have $12,500 that you have $12,500 to use, you can do whatever you want with it. You can write this check if you want, but when you write this check there will be a 4 percent transaction fee with a maximum charge of $50. Now if you sit down and write a check for $12,500 and know you are going to be charged $50 you have now gone over your limit. If you add the amount that you wrote your check for, plus the $50 fee that you are going to be charged, you are now above $12,500."

….

Scott: "Well, I think that they ought to change the wording here because it’s really confusing people."

Rep: "Well Mr. Bilker you can write in and tell the bank that you want them to change the wording."

Scott: "They should definitely change the wording. I think this is quite confusing, since when you say, ‘You can write your checks up to your credit limit,’ and you do that, it doesn’t anywhere, anywhere in this letter, say that if you write your checks up to your credit limit you will go over. Is that true that statement?... it doesn’t say anywhere that if you do that, you will go over your limit because of the fees. I think that should be in there that would make it quite clear. Don’t you agree Ms. Let?"

Rep: "I don’t agree with you."

Scott: "Okay. I just don’t understand how you can’t see it."

Rep: "Well, you see it your way and I see it my way. We can look at the same thing and see two different things and I guess that’s just the point where we are."

Scott: "You’re seeing a lot of extra words that don’t exist in the letter."

Rep: "No, I’m just seeing that if I add how much I wrote a check for and add the fee that the bank is charging me I have now gone over my credit limit. That’s all I did."

….

Scott: "Well you see, communication is the responsibility of the communicator. And this wasn’t communicated very well."

Rep: "Well, I am very sorry that you feel that way. But that is the way that the bank sends their information. They do advise you of any fees up front."

….

Scott: "When I have my credit card, my physical card, and my limit is $12,500, and I go into a store how much can I spend? How much?"

Rep: "If you pay your balances in full, $12,500."

….

Scott: "So you’re telling me that Chase tells me that I can use my credit card up to the limit, right?"

Rep: "The credit card, yes."

….

Scott: "So, in that case up to the limit means up to the limit. But in this case (the credit offer in the letter) up to the limit means not up to the limit. Even though the words are the same, you’re telling me that when they say up to the limit then…"

Rep: "The words are the same, however, it says up to the limit. These says up to the limit including with a fee."

Scott: "No."

Rep: "Yes it does."

Scott: "No, you said it."

Rep: "You’re going wrong."

Scott: "No, that’s where you are going wrong. You said to me, just a second ago, up to the limit including the fee..."

Rep: "Okay, and again it’s your interpretation. I cannot continue this."

….

Rep: "Thank you for calling customer service."

Scott: "Bye, bye."

Rep: "Bye, bye."

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Biweekly Mortgages: A Reader's Personal Story
Kevin is a DebtSmart subscriber.

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

The following is a series of e-mails written back-and-forth between Scott Bilker and Kevin, a DebtSmart Reader, about Kevin's experience with a nightmare of a mortgage!

Scott,

Thanks for your informative article on Biweekly mortgages. It really helped to open my eyes when I was considering one.

Isn't this practice illegal? Seems like the marketing materials that I received are misleading and deceptive. Do you have any recommendations on what I can do to help stop this practice?

Kevin

+++++++++++++++++++++++++++++++++++++

Kevin,

Thanks for writing!

The practice of selling a biweekly mortgage isn't illegal, just not in the interest of consumers if it costs more than their current mortgage.

Also, thanks so much for your positive comments about DebtSmart and would like to include them on my web site and in-print.

Do I have your permission to do that?

Regards, Scott

+++++++++++++++++++++++++++++++++++++

Scott,

You have my permission to include my comments.

Just to let you know a little more on my biweekly mortgage saga... After researching info on biweekly mortgages, I contacted Wells Fargo Home Mortgage (I have my mortgage with them and received the offer for biweekly mortgage from them) to express my concern and displeasure at the program.

My first encounter was with a tele-sales guy named Ron. After inquiring on some details of the program, Ron proceeded to make some bold statements like, "You pay no more a month" and "Your monthly payment will not increase." I asked Ron, "How can you not increase your monthly payments when you make the equivalent of 13 monthly payments a year?" Ron stumbled for a reasonable answer and then conceded that you did in fact make two extra biweekly payments a year which was the equivalent of a 13th monthly payment.

After further discussion, I discovered that Ron worked for Paymap Inc. and not Wells Fargo. I made a simple request to speak with a Wells Fargo employee to discuss my concerns. Ron connected me with Carrie of Wells Fargo customer service. Carrie was very nice but didn't know anything about biweekly mortgages and really wanted to put me in contact with Paymap Inc. to help answer my questions and listen to my concerns. I repeatedly had to tell Carrie that I was a customer of Wells Fargo and wanted to speak with someone at Wells Fargo about my concerns.

Carrie asked me to hold and after a lengthy delay she introduced me to Denise. I was shocked to find out that Denise was in fact a Paymap Inc. employee. Denise went straight into the "sales pitch" which was irritating. She told me how "Easy and inexpensive their Equity Enhancement Program is (cool name for biweekly mortgage) and how they have 500,000 happy Wells Fargo customers." I asked, "Wouldn't it be easier and less expensive to divide my monthly payment by twelve and then apply that amount each month to my mortgage principle?" Denise agreed but said that most people don't have the discipline to do that.

I again asked for a Wells Fargo employee that understood their program to speak with. Seems that no one at Wells Fargo knows anything about their Equity Enhancement Program. According to Ron, Carrie, and Denise, only employees of Paymap Inc. know the details of the program. I expressed my displeasure. "Your telling me that no person at Wells Fargo understands or can speak with me about the Equity Enhancement Program?" They all agreed. It's kind of scary that as a consumer the company you trust with your mortgage doesn't know or understand the programs that it offers. I finished my lengthy phone conservation by asking for an employee of Wells Fargo to contact me to discuss the program. I'm not going to hold my breath waiting for the phone to ring.

Kevin

+++++++++++++++++++++++++++++++++++++

Kevin,

I'm not surprised! I don't wouldn't expect their phone-drones to be able to understand the details of that mortgage "product." And they certainly don't know how it truly compares to your current mortgage so they could, and would, never tell you if it's better (cheaper) than your monthly mortgage.

Your story is very well written! In fact, I would like to use your article in print, online at my web site, or in the email newsletter, which is sent to 7,900+ people every two weeks. Articles posted online would have your photo (if you wish).

Do I have your permission?

If yes, then you agree that DebtSmart, Press One Publishing, its assigns and licensees, have been granted the non-exclusive right to use and/or reproduce your article in any manner, in any media, and for any purpose.

Please let me know as soon as possible--thanks!

Regards, Scott PS: If you have a digital photo, and want me to use it, just send me it as an attachment or snail mail to Press One Publishing, PO Box 563, Barnegat, NJ 08005-0563

+++++++++++++++++++++++++++++++++++++

Scott,

Thanks for the compliment on my story. You do have my permission to use it.

Kevin Harve

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Buy a Car with a Cash Advance?
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Hi Scott,
Read your article Consider Financing Your Next Car with a Credit Card and as you asked I'm commenting on same. The logic of the 4.9% at 6 Months makes sense, BUT is it a reality? You said use your credit, WRITE A CHECK, isn't writing a check tantamount to a CASH ADVANCE? I believe it is with most credit card companies. If it is, then aren't you looking at a much higher interest rate? Example, one of my credit cards has PURCHASES @ 18.90, while CASH ADVANCES are at 23.00! And, any monies paid against the balance ALWAYS goes to the lower interest rate! Any comment? BTW, I enjoyed the article and you have a great website! Very interesting, informative & helpful "stuff!"
--Mel

Answer
Mel,

Thank you for writing!

You're correct that you would probably have to write a check. And yes, it's a cash advance, however, I have many, many, many, no-fee, low rate, check offers. I have one I just used for 2.99%, no-fees, which is far better than any used car loan I could get otherwise.

I said in my article to "consider" using your credit card. If it doesn't make sense in your case, then don't do it, but many people may be able to get a better deal this way.

Talk to you later.
--Scott

Reply
I just wanted to see if my train of thought process with regard to interest rates (cash vs purchase) was correct. BTW, know where I can get a credit card with a $75,000 credit line, I want to buy a used Ferrari! Keep up the great work, love your website!
--Mel

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Car Debt or Credit Debt First?
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
First off great site, very informative.

I've already organized my debt with the highest interest debt to be paid off first. Only thing is, my car loan is up toward the top and it's getting close to the time when I would need to roll over the payments of paid off debt to the next highest interest rate debt, my car loan.

Does it make sense to start increasing my payments on this loan? Isn't it fixed what I will pay on the loan? If this is the case shouldn't I start paying on the next highest interest debt (another credit card) instead? Thanks for any help!
Mike

Answer
Mike,

Thanks your positive comments about DebtSmart!

It's great that you've already set up a payment program that pays the highest-interest-rate debts back first. Many financial "experts" advise to pay off the lowest-balance debt first but that's simply wrong, meaning, more expensive!

Since your car loan is about to become the most expensive debt, highest interest rate, you should "roll" your payments from the last debt into the car loan. This is the most efficient method of repaying your debt.

There are however, a few details you need to check:

1) Are you allowed to pay off your car loan early with larger payments? There are some loans that have pre-payment penalty conditions so call the bank to make sure you can send in more money toward the loan principal.

2) When you send in your payments be sure the bank knows to apply the entire payment toward your balance. There are a few instances when the bank will apply the scheduled payment and hold the extra for the next payment. You don't want that situation.

3) Will you need that extra cash in the near future? If you pay more toward a credit card you can always get that cash back if you need it by using a cash advance or making purchases with the card. When you increase the payment on the car, that money becomes part of the car and cannot be converted back into cash again until the car is sold.

In summary, you are correct. It makes perfect sense to send the extra payment to the car loan because it's the most expensive debt on your list. Just be sure there are no penalties for paying off the loan early. If there are penalties, you'll need to consider if the savings from the interest charges are greater than penalties. Chances are you can pay off the loan early; if there are penalties let me know.

Keep up the good work!

Scott

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Tricky Insurance Pays Off
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
I found out after renewing a credit card that I had been paying for insurance that I wasn't aware of. This insurance would pay benefits in case I died or became disabled. I had the card since 1997 and became disabled in 1998 (Parkinson's). I called a credit card rep and she advised me to put in a claim. She also stated if there were any other balances to transfer I could transfer them and clear them up also. Could this be true?
--Alan

Alan,

Thanks for writing! I'm sorry to hear about your disability.

It's very common that people pay for something on their credit card that they don't even know about. It's usually some type of insurance, as in your case, or a buyer's advantage program, or other membership package. This happens because people are enticed to sign up for the "free trial" but then forget to cancel after the trial period. This is probably what happened in your case.

Despite having previously paid for insurance that you were unaware of, it's going to work out because you can actually put in a claim. It sounds like they're willing to cancel all your debt with the claim. I don't know the details of the insurance but that's what I'm getting from your question.

The only thing I'm wondering about is that the credit card rep advised you to transfer your balance to the card and then put in a claim. This doesn't make sense because the bank would be giving you money then expunging the debt.

I guess it's possible that the rep was giving you an "insider tip" but I would still be cautious. Either way, if their transfer rate is better than your other cards then it's certainly smart to transfer your balances to this card.

To be sure of the details you must get a copy of the original policy. You many not have it so ask them to send you a copy. Read it carefully before you do anything. You don't want to be tricked into voiding the possibility of using the insurance to your maximum advantage.

I would do the transfer and put in a claim, as instructed by the rep. If they forgive the debt--fantastic! If not, then keep the debt as long as the transfer with them is the best option you have.

Good luck and please let me know what happens!

Regards,
Scott

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Consolidating Credit Cards to One Account
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Hi Scott,
I am a recent college graduate and I have accumulated about $4,000.00 worth of debt spread out in 4 different credit card accounts. I would like to transfer all of the balances to an account with a lower APR to save money and to make monthly payments more convenient. The problem is that I have not been able to be approved for a credit card with a limit of over $1500.00. Besides having multiple cards near their credit limit, I have good credit and always make payments on time. Is there anything that you can recommend? Please Help!
--Mary

Mary,

Thanks for writing!

I know just how you feel. I had the same situation when I was finished with college because I had to use my credit cards to help finance my senior year.

Here's the deal. The most important aspect of that debt is how much it's costing. At least that's my opinion. The best loan is the cheapest loan and I consider it worth the work to write four separate checks if the rates are worthwhile.

Many people make the mistake of consolidating simply because they don't like the work involved with handling many accounts. The mistake is that they consolidate at a greater rate for the convenience of having one payment. It's a personal choice to decide if it's worth a little extra in interest charges to avoid dealing with four accounts. It's not worth the extra cost for me.

If you do consolidate your accounts into one then please do not close your zero balance accounts! If you close your accounts you close your credit options. You may need those other cards sometime in the future to make the current banks compete for your business. You always want to have credit options and the best options, in my experience, emanate from banks that you have had a long relationship with.

Now let's talk about consolidating and saving money!

You mentioned having trouble getting new lines of credit to consolidate that $4,000 but there's another strategy you should attempt. Call each of your existing accounts and ask for their balance transfer department. Tell the rep, "I have about $3,000 of debt on other cards. If you (1) raise my credit limit, and (2) give me a great rate, I'll do the transfer right now otherwise I have three other banks to call!"

They may increase your credit limit on the spot by a few hundred dollars, they may do as you ask, they may need to get back to you, they may say no. No matter what happens, call each bank and see what they can do. If they do give you a good offer, then transfer your balance.

If they deny your credit line increase, then be sure to get a free copy of your credit report from the credit-reporting agency that the bank used to reject your line-increase request.

Good luck and please let me know what happens!

Regards,
Scott

PS: And you can take that to the bank! :)

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• Significantly reduce interest rates Christian Financial Consultants is currently achieving interest rates between 6% and 8% for our clients, much lower than high credit card interest rates.
• Eliminate late fees and over-the-limit charges

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Giving Up Your Rights--Without Knowing It!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

If you have a Capital One credit card, then I highly recommend you read this entire article!

I just received a letter from Capital One informing me that "enclosed is an important legal notice regarding arbitration" and I need to "read the entire notice to fully understand its implications" to my account.

This isn't the easiest reading by the way. It's a legal notice, written in legal language at the college graduate level. Quite different than the 6th-grade level credit offers they send me trying to get me to use my credit lines.

Here's an example from the arbitration letter: "The arbitration of any Claim must proceed on an individual basis, even if the Claim has been asserted in a court as a class action, private attorney general action or other representative of collective action."

Oh yeah, makes perfect sense to me.

Here's an example of the writing that's meant for me to easily understand (from a credit offer): "One of the attached Purchase Checks is already made payable to you. Consider using the other check to purchase something you've always wanted. It's that easy!"

Gee, I can understand that no problem. Why the difference in writing style? Could it be that in one case it's meant for me to be confused and in the other they want me to spend money on my credit lines? Could it be that both cases are written to work in Capital One's advantage? We both know the answers to those questions.

Here's the bottom line on this arbitration letter: if you do not reject the Arbitration Provision then it becomes part of your account. It's a "negative offer" similar to the music clubs that automatically send you the "CD of the Month" unless you tell them not to send it.

So what's the Arbitration Provision? It means that if you have a dispute that's listed in what they consider to be a dispute, the matter is taken to an impartial person, or group, to be resolved. Of course, you can choose your arbitrator--from their list.

It means that if you allow this provision to become part of your agreement you will not have the right to take your claim to court or participate in a class action lawsuit. And it may cost MORE to go to arbitration, probably because your attorney's fee could be covered for many claims, like say a class action lawsuit.

You may ask why it's important retain these rights?

First of all, I don't want to give up any rights unnecessarily, but more importantly is that although we are only going to recover pennies in a class action lawsuit, it's still in our best interest to be a part of these cases. Sure, the lawyers get all the money, but these lawsuits are one of the best defenses to keep the banks in check. It reminds them that they need to obey the law or they'll pay!

Here is a list of some of what they'll consider a "claim" (dispute you have with them or they have with you): Transactions or attempted transactions on your account.
Any billing or collection matters.
Any fees, interest, or their calculation.
Any products, services, or benefits programs in connection with your account (any insurance, rebates, rewards, etc.).
Any posting of transactions (including payments and credit) to your account.

I called their contact number in the letter to ask questions but only connected to their recording system that delivers answers based on a phone menu. In others, words, I couldn't reach a human--no surprise there.

I would urge you to STOP the Arbitration Provision from becoming part of your credit card agreement! I don't see it as being in our favor at all! If you have a Capital One account and accidentally threw out that letter, listen to the recording at 1-888-578-5462 to learn how to reject the provision.

Here's the general rule: When businesses spend money to send you an offer it's usually in their best interest and probably not yours. There are exceptions; however; I always approach all offers with a level of skepticism.

I have received term changes from other credit card banks which, if rejected, mean that the account is closed. The only consequence of rejecting the Arbitration Provision, which I saw in the letter, is that it doesn't become part of your account terms.

Let's look at this from Capital One's point of view. They're lending money to many people who are going to stiff them in bankruptcy court. I can understand why they need to protect themselves, however, they must treat us "DebtSmart" customers with respect. We are their best clients, and we need to stick together to show all the banks who's really in control--who's paying their salaries!

Don't give up any of your rights!

To reject the Arbitration Provision you must follow the detailed directions for completing the "Arbitration Rejection Coupon" that accompanies the notification letter.

Although I feel like they are trying to pull a fast one here I still like Capital One and recommend their credit card because the interest rates are generally lower than other credit cards. In their defense, on this Arbitration Policy change issue at least they indicated all the salient information in bold print on the envelope and in the letter.

By the way, the deadline for reject the Arbitration Provision is 1/31/02

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Advanced Cash-Advance Techniques
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Dear Scott,
I recently read your article about buying a card with a card. I have a 0% interest card and plenty of balance so it seems like a good idea. Problem is the seller is a private party. Obviously I can't use a convenience check or a cash advance or I'll blow the interest strategy. Is there a way to pay a private party so that it appears as a purchase on the card and not an advance? I have checked out PayPal but I'm not sure the seller is Internet active. Thanks.
--Tracy

Tracy,

Thanks for writing!

Note: Everything I suggest in this response is what I would do. You must be careful to analyze your specific situation to be sure that it will work in your benefit.

Glad to hear the you read my article, Consider Financing Your Next Car with a Credit Card!

It's great that you have a 0% deal on your credit card. I've used these deals in the past to purchase a few vehicles. Actually, it may not be such a problem that you seller is a private party. It's the same problem that you may face at a dealership.

Dealership say they accept credit card payments however, many will not let you purchase the entire car with your credit card. They'll allow you to put your down payment on the credit card but not the entire amount. This is because they don't want to pay the merchant fees for accepting the card. These fees are probably at least 2%. Therefore, a dealer would also ask you to use a personal check or bank check.

You need to find out if your 0% deal is good for cash advances. I'm guess that this may not be the case or else you wouldn't be asking, nevertheless, you should give your credit card bank a call and tell them that you'll write yourself a check, and deposit it in your account, as long as it's at the 0% rate.

If that doesn't work then ask them if they would give you that 0% rate if they, the bank, did a direct deposit into your checking, or savings, account. The key is to get that money in your account at the 0% rate, preferably without any cash advance fees, then use that money to write a bank-check to car seller.

Say it's the case that they still will not do this. They would probably entertain the idea of your transferring the balance from another card at the 0% rate, this way it's not a cash advance. Then, check with you other credit cards to find out if you can get a cash advance, with no fees. If so, you can write a check with the second card, deposit it into your account, buy the car, then immediately call the 0% bank and do a balance transfer. When the smoke clears you'll have that car at 0%.

You just need to do one more thing which, is to mark your calendar as to when the 0% deal expires. You must be sure to pay that off before they hike your interest rate. Also, don't be late paying on that 0% deal! It's probably true that the offering bank will slap you with a crazy-high interest rate as a penalty. I've seen some as high as 26% for late payers.

Good luck and please let me know what happens!

Regards,
Scott

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Providian Raised My APR to 29.99%
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
I was shocked to learn my Providian credit card raised my APR from 23.99 to 29.99. I've never missed a payment or been late. I called to find out why and the rep told me they mailed out a notice of change in terms. I said I never received the notice. They basically said too bad, but we can mail you out another one. I was so angry I closed my account. I waited for the promised re-mail of the notice. It never came. I called again, this time asking to speak with a supervisor. I calmly explained the situation, reminding them I've never missed a payment or been late, not even once. They said there was nothing they could do, except mail me the new terms. Still, another billing period and no terms. I called again, this time demanding my rate be lowered to the original 23.99, because I never received the terms. They said they would mail the terms again.

Now, I just received an insulting letter from them informing me that my request to lower the interest was denied because I closed the account too late. The letter went on to say this was all outlined in the notice they mailed to me in February. I have yet to receive the notice!! I don't even think the notice exists. Another family member has this card, with a closed account, and Providian never changed his rate. I feel singled out. Is it legal for them to change the terms without any notice?? What are my options to fight this?? If they are in violation of a law, who can I report this to (I live in Las Vegas)?? Please help!!
--Claudette

Claudette,

Thanks for writing!

What has happened to you is has become very common. I have also been receiving more and more notices with changes in terms.

The deal is that you can decline to accept some of these term changes and it won't affect your account. For example, I have received many term changes regarding arbitration. If you don't decline the terms then you give up your right to bring them to court under certain conditions. For more on that read my article, Giving Up Your Rights--Without Knowing It!

However, if you decline other changes, for example rate changes, then the bank will close your account and you'll have to repay under your original terms. Of course, you would have had to reply by their arbitrary deadline. To see the legal details you'll need to look at the original terms from your account agreement with Providian.

I also have a Providian credit card and in my 10/5/1998 Account Agreement it states: "CHANGES. After we provide you any notice required by law, we may change any part of this Agreement and add or remove requirements. If a change is made to the Finance Charges section of this Agreement, the new finance charge calculation will apply to your entire Account balance from the effective date of the change. Changes will apply to balances that include items posted to your Account before the date of the change and will apply whether or not you continue to use the Account."

The way I'm reading that is that they can basically do what they want. I guess the only argument you can make is that they have not yet "provided you" with a notice. If you want to bust chops you could try calling and asking them for proof that they mailed it because you have yet to receive the notice. Then make them send it to you by signature delivery like FedEx or Express Mail. Tell them that they have not yet "provided the notice required by law" and they cannot make any changes until they do provide that notice.

If the rep or supervisor cannot help then ask for "an officer of the bank."

You need to punish them! Teach them a lesson! You already closed the account but that's not enough! You must get a better rate, and let's face it, 23.99% is a crazy-high rate!

Apply for a new credit card and transfer the balance from that Providian card. Do it right away!

Check out my article, Getting better, cheaper credit--right now! and apply for a new credit card. Be sure to do a balance transfer from that high rate when you do the application. This will get rid of that high rate as well as increasing your chances of getting approved.

Lastly, you can make a complaint to:

1) The Office of the Controller of the Currency (OCC), 1-800-613-6743
2) The Federal Trade Commission
3) The Better Business Bureau

Good luck and please let me know what happens!

Regard, Scott

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Credit Card Debt Consolidation can lower your credit card payments.
Christian Financial Consultants will light the path to freedom and will minister the support that all of His followers' need in challenging times. Our credit card debt consolidation program can help.

Christian Financial Consultants' unique credit card debt consolidation program may help you to:

• Lower your monthly payments In some cases, monthly payments can be reduced as much as 70%.
• Drastically reduce interest rates Christian Financial Consultants is currently achieving average interest rates between 6% and 8% for our clients, much lower than high credit card interest rates.
• Eliminate credit card payment late fees and over-the-limit charges

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What is credit card debt consolidation?
Credit card debt consolidation is a means of consolidating all of your credit card debt into a single debt obligation, usually with a much lower interest rate. Our credit card debt consolidation program can help you pay off your credit card debt much faster.

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Identity Theft--A Personal Story
by Robert B. Gamble

Robert B. Gamble is an Electrical Engineer currently working for the U.S. Navy at The Naval Air Warfare Center in Lakehurst. Robert also is one of the editors of Scott Bilker's best-selling book, "Credit Card and Debt Management." This article is brought to you by the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Several weeks ago I received a bill from Target Credit. I knew I did not apply for such a card, so I called the number related to the $160 worth of items charged and listed on the bill. They told me the items were shipped to someone in New York. Well, I was not about to pay for something I did not order, or receive, and I was not about to pay for a credit card that I did not even apply for.

I called Target, and came to find out that someone had signed up for the card, they had my name, my social security number, and my address, however the address had the wrong street number.

Needless to write, I told them to cancel the card and I filed a fraud report. Three months later, I am still receiving evidence that the thieves are still trying to use the card. Target assures me that they have canceled the card, and are not accepting any more charges. They assure me that their fraud department is handling it.

Thank you (Scott) for my Capital One card. Last week, I received a call from Capital One to verify if I truly wanted another Capital One Card. They noticed that the new application was to some address in West Virginia, and they wanted to confirm that I wanted the new card.

They provided Capital One my name, and my SSN and the new address. I told them no, and they told me I should contact the three different credit report companies and put a statement in that would require the credit report companies to contact me when any new credit cards are applied for. Kathy (the Capital One person) gave me the phone numbers for the three credit report companies and suggested I call them ASAP.

As soon as I hung up, I called them. The three companies are:
Experian (888) 397-3742
Trans Union (800) 680-7289
EquiFax, Phone # from the Credit Report - (866) 233-3780

Address:
Equifax Information Services, P.O. Box 740256, Atlanta, GA 30374-0256

or, Could not speak to anyone
(800) 685-1111 or (800) 270-3435

or, for online help
(888) 532-0179

Fax machine number
(888) 729-0083

I was able to contact Experian & Trans Union and speak to a live person. They helped me file the necessary information, and said I would receive a letter within 10 days. EquiFax, only has an automated number which wants to charge $39.95 a month for their protection service.

I have not contacted the number from the credit report that I received last month (Just by chance I ordered a Free report which came from EquiFax). While the credit report does not show the Target card, or any other card I don't know about, I still want to call and file the fraud report to require contacting me before issuing any new cards.

I hope this helps you and your readers, and again thanks for the Capital One card.

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Getting Your Overpayment Refund
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Dear Scott,

I receive your newsletter and love it. Very helpful!

Recently I have taken out a debt consolidation loan. From application for the loan and closing on the loan was 3 months. The consolidation loan included preprinted checks made out to each of the creditors (5) with the total balance owed at the application time.

The problem was that during the 3 months before closing I had been paying the minimum payment, so when the loan closed and the checks were issued the check amount was higher then the actual balance.

I have received credit checks from all of the creditors for the difference but one. The one I have sent 2 letters to the customer service address request the account be closed and issue the check.

It has been 2 months with no response from the creditor. I have received 2 statements showing the credit. What is the next step to getting the money back?

They owe me $179.00 to much money to walk away from. What is very upsetting to me is that, if I owed them money, I would have to pay late fees, interest and get marks on my credit report.

Sincerely,
Aimee

Aimee,

Thanks for writing! I love your attitude!

They should be required to pay you a late fee! But doubt that will ever happen but maybe someday a law can be added to the books that would require late fees due the consumer in this situation.

I have certainly been in similar situations. By making an overpayment to any creditor, you create a credit balance. That credit balance must be returned to you. You asked for a check twice and they haven't sent it.

Here's what I would do...

1) I'd call and speak to a customer service rep to see what's going on with the check. Maybe they sent it and the "check is in the mail."

2) If I still didn't receive the check, I'd use the credit card for my normal shopping, groceries, etc. Once I spent $179 I'd stop. If I went over $179 I'd pay them the difference and never use the card again.

3) Here's a technique you can try if you don't mind more hassle. I would do it because I'm also interested in finding out the results of creative financial techniques and telling everyone what happened. If I had credit checks issued on that credit line I'd write myself a check for $179 and deposit it into my personal checking account.

There a few possible complications with this: (1) if they have already sent you a check for $179 then it would be a cash advance and subject to cash advance fees (2) even if they haven't issued the check they may still try to charge you a cash advance fee, even though it's your money! In fact, I would bet they would charge you the fee. If I received a statement, after writing the check, that the $179 brings my balance to zero (plus a fee), because it's my money, and they charged me a cash advance fee, I'd call the bank and ask to have that fee waived because they never sent me the credit check. They'd probably argue and say it's still a cash advance to which I would reply, "it's not an 'advance' against my credit line because it's not a loan, it's my own money!" If they still didn't waive the fee I'd formally dispute the charge. I don't know if you want to make a mountain out of a molehill however, it is an option.

4) Same as (3) but use the card at an ATM or do a cash-advance at a bank.

Please let me know the outcome of your situation--thanks!

Regards,
Scott

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Debt can build up and become more and more difficult to manage. High credit card interest rates make the situation even worse. Our credit repair counselers can help you reduce your debt and repair your credit.

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The borrower is servant to the lender.
Proverbs 22:7

The financial cost
We all know there is a financial cost to indebtedness. High interest rates, fees and extended repayment terms mean the debtor ends up repaying several times the original amount that was borrowed.

Resolve your obligations
There is a vast difference between meeting your obligations every month and actually resolving them. This is where Christian Financial Consultants can help. Through our extensive network of not-for-profit resources, we have found common ground for our clients and more than 12,000 creditors nationwide. By reducing or eliminating interest rates and fees and by restructuring monthly payments, we can help you to make significant progress on your debt every single month. This provides a ray of hope and a promise of freedom. The net result will be freedom from debt in a fraction of the time that would be required otherwise. To find out how Christian Financial Consultants can help, request a confidential free quote or call our toll-free counseling helpline.

A step on the right path
There is a solution. Allow yourself and your loved ones to live a simple life as God intended. Rather than just meeting your obligations every month, why not begin to resolve your obligations? To find out how Christian Financial Consultants can help, request a confidential free quote or call our toll-free counseling helpline.

Please fill out the form on the right for a free counseling session.

Are your debts piling up and becoming difficult to manage? Debt consolidation can be an effective way to reduce the burden and help you along the path to completely eliminating your debt.

Our debt consolidation program can help you:

• Consolidate your payments into one monthly payment
• Lower your monthly payments
• Drastically reduce interest rates
• Eliminate late fees and over-the-limit charges

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Need debt consolidation help?

Debt Consolidation can lower your credit card payments.
Christian Financial Consultants can light the path to freedom and will minister the support that all of His followers' need in challenging times. Our debt consolidation program can help.

Christian Financial Consultants' unique debt consolidation help program may help you to:

• Reduce your monthly payments In some cases, your payments can be reduced as much as 70%.
• Drastically reduce interest rates We are currently achieving average interest rates between 6% and 8% for our clients, much lower than high credit card interest rates.
• Eliminate late fees and over-the-limit charges

Please fill out the form on the right for a free debt consolidation help counseling session.

What is debt consolidation, and how can it help?
Debt consolidation is a means of consolidating all of your debt into a single debt payment, usually with a much lower interest rate. Our debt consolidation program can help you pay off your debts much faster.

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Debt Negotiation
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Question

I need to know if this will really work. It makes me very nervous in not paying my bills so they can be negotiated. I talked to DEBTCO and I got very excited that I could be out of debt in 3 years but when I got the papers (contract) I felt a little uneasy. Should I be uneasy? Should I think more about consolidation? Please help me make the right choice. I really need help with my debt. Thank you. --Jackie

Answer

Jackie,

Thanks for writing!

I do not know all the details for DEBTCO however, I'm certainly familiar with negotiating for payoff terms with credit card banks.

It's been my experience that credit card banks will negotiate settlements with customers who are having trouble. And "having trouble" does include not being able to make their payments.

My impression is that you're a good money manager and can find a way to pay your bills by using your credit options. You don't want to be late because you know that would really hurt your credit history. Worst of all, paying late may increase the cost of your outstanding balances if banks penalize you by raising your rates--not to mention all the late fees and other penalties.

My guess is that they (DEBTCO) want you to stop paying so you'll fall into the category of being in trouble and, therefore, it will be much easier for them to settle your accounts. Even if they can settle your accounts for less, which is probably the case, the settlement will be reported in your credit history and will certainly not look pretty to future lenders.

Okay, so I've written a lot of words so far but really haven't reached a conclusion. This is because there's always a trade off. You can do what DEBTCO says and probably (not definitely) have them settle your accounts for less thus saving you money.

BUT you risk the consequences of not paying your bills on time which can be further-reaching than the penalties on the accounts you want to settle. Lately, many banks have changed their policies to include clauses that give them the right to raise your rates if you're late paying other creditors!

Here's an example of that from my Citibank card: "If you default under any Citibank Card Agreement because you fail to make a payment to us or any other creditor when due, you exceed your credit line, or you make a payment to us that is not honored by your bank, we may increase the ANNUAL PERCENTAGE RATE (including any promotional rate) on all balances to a default rate of up to 24.99%."

What to do?

I never want to tell people what they should do. Ultimately you should base your decision on what you have learned. Speak with people that you trust to help you make our decision.

However, I can tell you what I would do if I were in your position.

I would call each bank that you want to settle with and ask to speak with their "settlement department." Tell them that you're going to be having trouble paying your bill and that you may even be considering bankruptcy (which you may have to sometime), but you want to find out your options for paying off the account in full if they reduce how much you need to pay to "settle" the account. For example, if you owe $5,000, tell them that you can pay it off in full for $2,500.

They may say that you must pay it off in ful,l or they may offer other payment plans or even reduce the interest rate to zero. They will need to be convinced that you really need help otherwise they won't consider settling the account for less than the outstanding balance.

Just make it clear to them that you'll be talking to a bankruptcy attorney to explore that option. Tell the bank that if they can offer you something reasonable you'll work with the bank, or else you'll be forced to consider the bankruptcy option.

What I'm suggesting is that you try to settle the accounts yourself first. You may not be able to get better payoff numbers than DEBTCO but it's possible that you can. Also, you may be able to avoid the problem of not paying your accounts on time.

I'd be happy to look at your contract with DEBTCO and give you my opinion on what they're promising. You can send it to me by email or fax to (609) 660-1412.

Good luck and please let me know what happens!

Regards, Scott

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Credit and Marriage
by Scott Bilker

Scott,
I was 36 when I married. I have excellent credit. However, the man I married went through a messy divorce and his credit is moderate at best. If I apply for credit, such as a new car, am I obligated to list my husband's debts or can I still obtain credit in my own name?
--Vicky

Vicky,

Thanks for writing!

When you got married you also married his credit. For better or worse. But that doesn't mean that it has to entirely affect your credit.

If you apply for that new car you won't have to list any of his information unless the cars is going to be in his name as well. If it's your car, and your doing the financing, then they should only be researching your credit background.

The only catch having joint accounts with your husband. These accounts will show up in your credit report. But if these accounts are being paid on time then you should have no problems.

As long as his credit problems don't have your name attached to them they you should be okay.

Have you taken a look at your credit report lately? If not then take a look at both you and your husbands reports. I like to use MyFico.com. You can look at all three credit reports and the overall scores. By checking your credit report, in advance, you'll know exactly what to expect when applying for financing.

Good luck and please let me know what happens!

Regards,
Scott

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Extending a Low Rate
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
In the past year I left a considerably higher paying job for which I was in six years, to take a less stressful and lower paying one. Consideration of debt was a difficult one in this transition. I knew I would now be making less money to pay off the debts incurred but never realized how difficult it would be. I am now paying the minimum required and know that I will never get out of it this way. Any suggestions? Have moved most debt to lower rate cards, but the time on those is running out. Can I request that my rate remain the same since I make my payments on time?
--Nancy

Answer
Nancy,

You can request that your rates be lowered but they're not going to do it unless you give them a good reason. That reason is that you'll transfer your balance to another bank unless they lower your rate.

Now that you have a lower-stress job you may want to consider earning extra money in your spare time. I know many people that have successfully cleaned up they're house plus made some extra cash selling their old stuff on eBay.com.

Also, be sure to make a complete list of all your financial obligations, mortgage/rent, phone, credit cards, cable tv, etc. and figure out how that works with your current income. This list of monthly payments is part of the roadmap you'll need to make the right financial decisions.

Scott

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Fighting an Increasing Rate
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
I had a card that had a fixed rate of 5% on my balance. I closed the account years ago when I started taking control of my debt. Since this was the lowest rate of the cards I had I was only paying the minimum and concentrating instead on paying off other high interest credit. I received a notice with one of my invoices that they would be increasing the rate to 20% and that I basically didn't have a choice in the matter (fine print). I transfered the balance over to other cards that would have a lower APR than the 20% they would be imposing however this severely limited my available credit for emergency purposes.

Just wanted to know if it is legal for them to increase the rate on a closed account and if there was any other option for me to consider. Obviously this would be information for any future similar situations. Thanks!
--Mike

Answer
Mike,

Do you have the original paperwork that gave you the fixed rate of 5%? I truly hope so because it's that documentation that could ultimately help you keep that rate. The only problem is that you did transfer the balance but you did so because you thought they wouldn't keep the rate at what they promised.

I see this happen frequently that's why I ALWAYS keep copies of the letter, terms, conditions, etc. in my files for just such a situation. I even photocopy applications!

If this happened to me, and I found evidence that they couldn't raise the rate, then I might even contact a lawyer and see what could be done. I would also contact the Federal Trade Commission and other consumer groups to see if they could help me make the bank honor their agreement.

For the future...get everything in writing and keep it in a file!

Good luck and please let me know what happens.

Scott

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