Credit Cards

I had a credit card that I used quite a bit that got cancelled recently. The method of cancellation consisted of the company increasing my interest rate to nearly 40% APR, cutting my credit limit by a factor of four, and then charging me an excessive amount when a cheque got delayed in the Christmas post so that my payment was a day late. OK, it was actually me that cancelled it, but the end result was the same. And then, after I cancelled it, they sent me a bill for 11p. This conforms exactly to a definition I posted a few weeks ago in Community of the phrase "taking the piss", and (I assume) was primarily intended as a means of making sure I never apply for a card with them again.

Dave
 
Dave Rogers said:
I had a credit card that I used quite a bit that got cancelled recently. The method of cancellation consisted of the company increasing my interest rate to nearly 40% APR, cutting my credit limit by a factor of four, and then charging me an excessive amount when a cheque got delayed in the Christmas post so that my payment was a day late. OK, it was actually me that cancelled it, but the end result was the same. And then, after I cancelled it, they sent me a bill for 11p. This conforms exactly to a definition I posted a few weeks ago in Community of the phrase "taking the piss", and (I assume) was primarily intended as a means of making sure I never apply for a card with them again.

Dave
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The marketing jargon is "facilitated departure"

The business definition of a 'bad' customer is that he is not profitable enough.
 
WildCat said:
Not including my Visa debit card of course, which Home Depot took instead (last time I rented a tool there they wouldn't accept a debit card for deposit, which is why I gave them the credit card in the first place).
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I would recommend against using a debit card for a deposit. They may put a hold on your account for the amount of your balance (it's the only way they can be sure the money will be there if needed), and though they won't run the charge through if you return the equipment, you'll still have a lowered available balance while the hold is there. Sometimes it can take a few days to clear, and you won't have access to your money until it does. (And if you're not careful you could overdraft as a result
 
The Central Scrutinizer said:
I have credit cards and I haven't failed. Explain.
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I think Supernovae's somewhat correct that the system encourages bad habits (by rewarding bad habits).

For example, when my wife and I married, we chose to consolidate our accounts meant closing some redundant credit cards and lines of credit. Yet: this obviously responsible change *reduced* our individual credit scores.

ie: the rating services do not exactly value consumers who undertake proactive reduction of debt or fraud exposure - they value consumers that are profitable.

We're really lucky - we have well paying jobs and have never had to hold a balance on our credit cards and I don't recall ever paying interest on a card. This means the bank keeps trying to talk us into accounts with recurring service charges. They think we're cheap (we are) which makes us somewhat undesireable no matter how much money we have/make.
 
blutoski said:
ie: the rating services do not exactly value consumers who undertake proactive reduction of debt or fraud exposure - they value consumers that are profitable.
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Which is why I think it is silly for mortgage companies and others interested in creditworthiness to use the same ratings.
 
Supernovae said:
Love my debit card, but credit cards can go.
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I'm the opposite; love my credit cards, but debit cards can go. I use my credit cards (two of them) for absolutely everything, including paying utility bills, groceries, gas, etc. Anything possible will go on one of the two credit cards. Then I pay them in full each month, so I never pay a penny in interest. And they both earn cash rewards, so every few months, I get a check for $20-$50. My checkbook is much neater now, since there are only deposits, a few checks (one or two a month) or online payments for things I can't pay with credit cards, and the two monthly credit card payments. Easy peasy.

If used properly rather than as a way to buy things you can't afford, credit cards are a huge convenience. And unlike debit cards, I don't have to worry about how much money is in my account at any given time. And my understanding is that debit cards carry much less consumer protection than credit cards, though that may have changed.
 
I also use credit cards for everything, except those purchases that have cash discounts. As I always pay them off at the end of the month and get up to 1.5% back, they pay off each year also. I have not paid any credit card interest since 2000, wife never has.

Ranb
 
blutoski said:
This means the bank keeps trying to talk us into accounts with recurring service charges. They think we're cheap (we are) which makes us somewhat undesireable no matter how much money we have/make.
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Not necessarily, remember the credit card company gets a cut on everything you buy with it, so if you have a decent level of usage you may still be a good customer, even if you pay no interest/charges.
 
Credit cards are such a bad idea!!! Debit cards can do anything credit cards can do, with none of the worry regarding interest. Why someone would take a loan out to buy a sandwich or a pen (which is what one is doing when using a credit card) is beyond me.

My wife and I paid off her credit cards (she hadn't used them in years) a few years ago and are better off for it.
 
alfaniner said:
I needed a quick $40 from an ATM. I was willing to pay the ATM fee of $3 for its convenience. What I wasn't informed of (at the time) was that there is a minimum $15 "cash advance fee". Had I known (or remembered) at the time I would have just borrowed it.

I have had this card for over 25 years, with a very high credit limit, and always paid in full. But with this, and considering I have rarely used it recently, I am cancelling it tomorrow.
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Credit card companies always gouge you for cash advances. There is usually a fee that is a percentage of the advance (often with a minimum, which is probably the $15 you paid). Also, there is usually a higher interest rate for cash advances, and there is usually no grace period; you will accrue interest charges from the day you get the advance until you pay it off. It pays to read the terms and conditions for a card, so you will know this stuff.

Some of this is understandable, because on a purchase, the credit card company gets paid by the merchant, so they have to make money other ways on a cash advance, but to me it seems that they go way too far. You are much better off using a debit or ATM card for cash.
 
Nursedan said:
Credit cards are such a bad idea!!! Debit cards can do anything credit cards can do, with none of the worry regarding interest. Why someone would take a loan out to buy a sandwich or a pen (which is what one is doing when using a credit card) is beyond me.

My wife and I paid off her credit cards (she hadn't used them in years) a few years ago and are better off for it.
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Credit cards are fine as long as you pay the balance every month, for the majority of cards that don't charge interest as long as you pay the full balance every month. Using them this way defers the payment up to a month, at no cost to you. However, if there is an annual or monthly fee, it negates this advantage though. Personally, any fee just to have the card is a deal breaker for me. If I get an offer with such a fee, it goes straight to the trash.
 
Jaggy Bunnet said:
Not necessarily, remember the credit card company gets a cut on everything you buy with it, so if you have a decent level of usage you may still be a good customer, even if you pay no interest/charges.
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It's possible that it works differently in Canada: the merchant POS solution provider can charge a transaction fee or monthly subscription, but the card issuer does not usually get anything out of the transaction.

The only bank in Canada that I'm aware of that does both is TD/CT.

The POS solution business is very competitive and not very profitable, which is the main reason the Canadian banks have abandoned it. The market appears to be split among Global Payments, Moneris and TD/CT. Other brands are resellers of these three networks.

The banks (as opposed to mere card issuers) may get indirect benefit from higher overall volumes, as they almost certainly charge the merchant for deposits. But I don't think they are considering this on a cardholder-by-cardholder evaluation.
 
wolfgirl said:
I'm the opposite; love my credit cards, but debit cards can go. I use my credit cards (two of them) for absolutely everything, including paying utility bills, groceries, gas, etc. Anything possible will go on one of the two credit cards. Then I pay them in full each month, so I never pay a penny in interest. And they both earn cash rewards, so every few months, I get a check for $20-$50. My checkbook is much neater now, since there are only deposits, a few checks (one or two a month) or online payments for things I can't pay with credit cards, and the two monthly credit card payments. Easy peasy.
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I get rewards on my debit card. Moot point.

If used properly rather than as a way to buy things you can't afford, credit cards are a huge convenience. And unlike debit cards, I don't have to worry about how much money is in my account at any given time. And my understanding is that debit cards carry much less consumer protection than credit cards, though that may have changed.
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PIN based "Debt" transactions have no protection however anything purchased by saying "credit" contains the same "protections" afforded by visa/master card.

I'm glad everything is hunky dory for you. I used to believe the same thing until it hit me.

I had a 740 score with credit up the wazoo and was loving my Amex points/perks however all it took was Bank of America to have one bad year and the little changes they did to freeze my accounts and HELOC caused a downward spiral that was impossible to get out of.

Good luck.. you will need it :) And no, i don't mean to be condescending at all. I have just experienced the industry as an insider (Working for MBNA before) as well as a customer. Nothing as risky as "credit cards" is worth the 1.5% savings that never happens or those points programs that never pan out.

If i can't pay cash, i can't pay.
 
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Supernovae said:
I had a 740 score with credit up the wazoo and was loving my Amex points/perks however all it took was Bank of America to have one bad year and the little changes they did to freeze my accounts and HELOC caused a downward spiral that was impossible to get out of.
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Do you always blame others for your problems?
 
Supernovae said:
I get rewards on my debit card. Moot point.


Good luck.. you will need it :) And no, i don't mean to be condescending at all. I have just experienced the industry as an insider (Working for MBNA before) as well as a customer. Nothing as risky as "credit cards" is worth the 1.5% savings that never happens or those points programs that never pan out.

If i can't pay cash, i can't pay.
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Supernovae - what do you mean by points programs that never pan out? I've flown many times on points earned from Visa - also used them for hotels.

Like one of the posters upthread, we use our credit card for everything and pay it off every month.
 
Fat Bottom Gurl said:
Supernovae - what do you mean by points programs that never pan out? I've flown many times on points earned from Visa - also used them for hotels.

Like one of the posters upthread, we use our credit card for everything and pay it off every month.
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That is great. Just don't expect that to last forever. I thought paying my bills on time would work as well but i was naive to think the credit card company was really out to help me.

Nothing is ever free.. if its too good to be true, it probably is.
 
Supernovae said:
That is great. Just don't expect that to last forever. I thought paying my bills on time would work as well but i was naive to think the credit card company was really out to help me.

Nothing is ever free.. if its too good to be true, it probably is.
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I've had my Discover card for 14 years, have never paid them so much as a single penny in interest, and have earned literally thousands of dollars in cash-back bonuses. I'm not above believing that things could change, and if they do, I'll stop using it that way. But until then...if it ain't broke, don't fix it.
 
blutoski said:
Jaggy Bunnet said:
Not necessarily, remember the credit card company gets a cut on everything you buy with it, so if you have a decent level of usage you may still be a good customer, even if you pay no interest/charges.
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It's possible that it works differently in Canada: the merchant POS solution provider can charge a transaction fee or monthly subscription, but the card issuer does not usually get anything out of the transaction.
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Back in 2004 I was buying a new hard drive and the store I was in wouldn't accept any credit cards because they charged these fees. Unless they've changed their business strategy since then or credit card companies just hate Nova Scotia, I think it's safe to assume they still doing it.
 
wolfgirl said:
I've had my Discover card for 14 years, have never paid them so much as a single penny in interest, and have earned literally thousands of dollars in cash-back bonuses. I'm not above believing that things could change, and if they do, I'll stop using it that way. But until then...if it ain't broke, don't fix it.
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I'm the same. They make money from the vendor on what I spend, and are kind enough to kick some of that back to me either in cashback or free flights. I don't pay them a fee or interest and also benefit from the fact that if the vendor goes bust, I can get my money back from the credit card company.

Why this is supposed to be a bad deal I'm not sure.
 
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