USURY

[inveresk]

I invariably pay my credit card bill on time and in full. I had a surprise in store when I got my statement today intimating I'd incurred $18. 53 interest. When I called the company, they advised that I hadn't paid in full last month - apparently I had misread my statement and paid $6,323. 23 instead of $6,326.23. When I queried how a $3 shortfall accumulated $18.54 interest, he advised that interest wasn't charged on the shortfall, but on the full amount of $6,326.23 and it would apply last month and this coming month - i.e. I had another interest charge coming in my next statement for over $35. To summarise, because I was $3 short, interest of $53 - plus change - applied.

I've had the card for a number of years so couldn't believe my ears. As well as earning 3% on every purchase I make, this lot wanted to charge me over 1700% interest on a $3 shortfall when I've cleared my balance early and in full every month - except for last month's error - since obtaining the card.

I'm astonished there isn't legislation to prevent this sort of abuse. I doubt if there's a back street loan shark out there that would have the nerve to charge that sort of interest so what kind of government do we have in Canada that allows this sort of gouging? That level of charging should be illegal.

They agreed to waive the interest but I'm going to do some internet research and see what cards are available out there. The only way I have of lodging a complaint is to vote with my feet, cancel my card and tell MC why. I know it won't make a blind bit of difference but if more people did it, perhaps the companies would have to sit up and take notice.

 

[dmccarty]

I think the only thing you can do is what you did. Call them up and tell them to remove the charges. It is bovine scat that they do this but it is what it is. I had a similar problem years ago with a credit card I had been using for almost 20 years. They kept changing the due date on the bill so that one would miss getting the payment in on time. I think the payment was due around the 22nd or so of the month. They started to move the date closer and closer to the 15th i.e., the pay date. My payment was late twice because of them moving the due date. I called and they removed the interest. They also reset the due date back towards the 22nd. But then it would start moving towards the 15th.

Canceled that $%^&*() and went to a different company. They can pound sand until it HURTS and BLEEDs. :thumbsup:

I still get credit card mail asking me to sign up. Including the company that shafted me after being a Customer for 20 years. But I will NEVER do business with them again.

Later,
Dan

 

[sodamo]

Truly suxs. Just amazing what get away with. I monitor and pay mine online and I watch the postings. I check these accounts almost daily.

As few years ago, when we moved, I informed via mail all accounts of my new mailing address. Over a year later got a phone call concerning my seriously overdue account. I didn't have a clue as I hadn't seen a statement from them since moving. As it was a zero balance I had no reason for concern. BUT, there was some obscure automatic renewal tied to that account, for $12. Now, because of mounting nonpayment they were contacting us.
I explained that I was quite unaware and had never received a statement as to any of these charges or interest. So the guy tells me, yes that's true because every month the statements come back returned mail. I asked what address, what he responded was beyond a simple typo, someone had mangled it beyond all reason. So I had to ask, if the statements were coming back every month why did it take so long to contact via phone as they were doing now??? No answer. So I agreed to send a check for the original charge, they agreed to "forgive" the additional charges but also cancelled the card. What I didn't learn until much later is this was filed as a negative entry on our credit report

Good luck

 

[sweettractors]

I always pay my monthly credit card balance off using 2 or 3 separate checks in order to keep my records straight. About 2 yr ago, they only credited 1 of 3 checks. I called and complained and they said, read the fine print on the back of the statement and that they were only obligated to accept 1 check per monthly payment. I think the regs have been changed by now. Anyway I still send in multiple checks and all is well now? Ken Sweet

 

[ronjhall]

I was looking for a lost charge for fuel used in our motorhome. While checking my AMX account I came across a line item called periodic interest charge. When I called AMX they said charge was for late payment. Asked when this happened. Person said he would check. My payments are done electronically one day before payment is due. I was credited all the interest. It appears that their accounting system charges interest on the late day. But has not recorded that a payment has been made 2 days before. I watch my cards better now.
By the way I never found the $120 charge for fuel we used during our 2010 trips.

 

[irvingj]

Same thing happened to my mother, after she ceased using her MC... I was taking care of all her finances, and was shocked to see a "Second Notice" bill for a charge + interest (at only 35% or so...).

When I called, it was for a yearly charge that had been missed. They agreed to not only waive the interest, but the yearly fee as well when I said, "Just cancel the card." Got a real salespitch about not cancelling the card, they were even ready to assign it to me! (Yeah, in ur dreams, fella....)

I ended up just letting it sit there; they eventually did cancel it --1 year? 2 years?-- later.

Just think about folks that are not able to pay their monthly balance; it's easy to see how people can get caught in that trap. Course, it would certainly be better if people didn't run up bills on those things in the first place, I know. Just glad I'm not there.

And look at the list of organizations that handle these cards- sounds like a re-run of names we heard in the news a couple years ago... CitiBank, Bank of America, Chase Manhattan.... very slippery folks!

--Anybody remember, about 25 years ago, when interest rates were syrocketing and banks were crying poverty because they were "stuck" with older mortgages that were running 3-5% when current rates were hitting 18-20%? In my travels during that time, listening to banks crying about it... seemed like every other available corner was having a drive-up/walk-up branch office for some bank being built on it! :confused2: Where'd THAT $$ come from, and why expand in such a supposedly tight market?? Something I never could figure out.

OK, rant over.

 

[smstonypoint]

Some new US credit card legislation went into effect this year: Feb. 22 FRB: Credit Card Rules (WYNTK) and Aug. 22 FRB: Credit Card Rules (WYNTK) August 22.

The new rules would prevent one of the problems mentioned above -- due date creep. The new rules also place limits on late fees -- a cash cow for the issuers.

At the time the legislation was being debated, it was claimed that the new regulations would result in annual credit card fees and reduced reward programs. My bank hasn't initiated an annual fee or changed its reward program yet. I'm keeping my fingers crossed.

Steve

 

[jimmyj]

I hate credit cards. I have two because I just don't think a person can easily get by without them if (as I do) they have to do a lot of travel for work. I am also a merchant, and it annoys the heck out of me that the credit cards charge such a premium to retailers who accept them. In their cc agreements with merchants, the merchant is forbidden from charging a user fee to customers to offset this fee.

I bet if everyone had to pay an extra 2% or 3% on a credit card purchase we'd use a lot less of them. Then again, maybe not considering how many folks are "agreeable" to carrying balances at 18% or 21% interest.

Interesting topic, I bet there are lots of opinions on this.

 

[smstonypoint]

In their cc agreements with merchants, the merchant is forbidden from charging a user fee to customers to offset this fee.

In the States, merchants can ( and some do) offer a discount to those who pay by cash or check. Is this a common practice in Canada?

Steve

 

[jimmyj]

Yes, good point. There are some places you can still get a cash deal. I forgot about that!

 

[blueriver]

. I am also a merchant, and it annoys the heck out of me that the credit cards charge such a premium to retailers who accept them. In their cc agreements with merchants, the merchant is forbidden from charging a user fee to customers to offset this fee.

I too am a merchant ... Here in the good old U.S. not only do you have the standard merchant fees, we also get additional fee's if we accept a Busines Visa or M/C, Extra Fees if the customer uses a debit card as a credit card... So sometimes the entire card transaction can run in excess of 3.4% PLUS the monthly fee's charged by the processing company.

 

[jinman]

Can I add telephone bill pirates to this mix without hijacking the thread too far? This month my wife noticed a $14.95 addition to our landline telephone bill for "voice mail services." We don't use voice mail, so she called our provider, CenturyLink. They said they could block additional charges, but this was a 3rd-party company and my wife would have to cancel the service with them. When she contacted the company, they tried to say my wife should cancel through CenturyLink, but she didn't let them get away with that. They finally agreed to cancel the "service" and credit on our account to reimburse the charges. My wife called CenturyLink back and they said she would have to pay the bill and be credited with the amount on a later bill. Also, even though this bill is just due, they said that the next bill might contain the charges also. So essentially, this practice "robs" us of $15 to $30 for two months because some pirate company decided to levy a fee on our bill, probably hoping we would not notice. What a crock! I'm betting we will not only see additional charges, but we'll probably be back on the phone with these folks and maybe threaten them with notifying the PUC in our state. I hope not, but I'm sure there are lots of folks out there with the same thing happening, so check your phone bills folks.:thumbsup:

 

[blueriver]

So essentially, this practice "robs" us of $15 to $30 for two months because some pirate company decided to levy a fee on our bill, probably hoping we would not notice.:thumbsup:

How many folks never take a look at the bill and just pay it?

 

[sweettractors]

Some new US credit card legislation went into effect this year: Feb. 22 FRB: Credit Card Rules (WYNTK) and Aug. 22 FRB: Credit Card Rules (WYNTK) August 22.

The new rules would prevent one of the problems mentioned above -- due date creep. The new rules also place limits on late fees -- a cash cow for the issuers.

At the time the legislation was being debated, it was claimed that the new regulations would result in annual credit card fees and reduced reward programs. My bank hasn't initiated an annual fee or changed its reward program yet. I'm keeping my fingers crossed.

Steve

What they have done to compensate for the new regs, is to now impose more fees on the Merchant. Every month, they have figured a new charge to add to my Merchant account. I pay, however, I will, eventually, have to pass it on to the consumer. Ken Sweet

 

[LBrown59]

Truly suxs. Just amazing what get away with. I monitor and pay mine online and I watch the postings. I check these accounts almost daily.

As few years ago, when we moved, I informed via mail all accounts of my new mailing address. Over a year later got a phone call concerning my seriously overdue account. I didn't have a clue as I hadn't seen a statement from them since moving. As it was a zero balance I had no reason for concern. BUT, there was some obscure automatic renewal tied to that account, for $12. Now, because of mounting nonpayment they were contacting us.
I explained that I was quite unaware and had never received a statement as to any of these charges or interest. So the guy tells me, yes that's true because every month the statements come back returned mail. I asked what address, what he responded was beyond a simple typo, someone had mangled it beyond all reason. So I had to ask, if the statements were coming back every month why did it take so long to contact via phone as they were doing now??? No answer. So I agreed to send a check for the original charge, they agreed to "forgive" the additional charges but also cancelled the card. What I didn't learn until much later is this was filed as a negative entry on our credit report

Good luck

That's just one of the many lousy faults of credit bureaus and credit reporting .

 

[not2old]

In the States, merchants can ( and some do) offer a discount to those who pay by cash or check. Is this a common practice in Canada?

Steve

Most credit card agreements with merchants don't permit them to offer discounts for cash. If you get a better deal for cash, the merchant is breaking his agreement with the bank.

Yes, their fees are too high, so my business doesn't accept payment by credit card. It's a necessity for some.

 

[smstonypoint]

Most credit card agreements with merchants don't permit them to offer discounts for cash. If you get a better deal for cash, the merchant is breaking his agreement with the bank.

Not to be argumentative, but I frequently see large gasoline/diesel station signs that quote lower prices for cash purchases in my neck of the woods.

It was my understanding that a surcharge for using a credit card is not allowed, but offering a cash discount is OK. Here's some info I found via a Google search.

"Note that a cash discount is legal and permitted under all credit card companies rules. A cash discount offers a lower price for cash than credit; for example, many gasoline stations offer cash discounts. While this may merely be a loophole, it is permitted. In addition, there are a few state governmental agencies, including state tax offices and motor vehicle departments, that are permitted to charge surcharges due to state laws that do not permit them to pay discount fees. However, retail merchants may not impose surcharges."

Financial Guide: MERCHANT CREDIT CARD ABUSES: What They Cannot Ask You To Do

Steve

 

[dave1949]

I too am a merchant ... Here in the good old U.S. not only do you have the standard merchant fees, we also get additional fee's if we accept a Busines Visa or M/C, Extra Fees if the customer uses a debit card as a credit card... So sometimes the entire card transaction can run in excess of 3.4% PLUS the monthly fee's charged by the processing company.

I read somewhere that credit cards offering 'points' towards rewards essentially charge the cost of that back to the merchant. True?
Dave.

 

[jimmyj]

Dave, the greater the benefit to the card user, the higher the cost to the merchant. Commercial cards and "premium" cards are the most costly to the merchant. It's a darned racket. The bank charges card users, and then the middle man who runs the electronic network charges the merchant, and then the card company charges the merchant. If merchants deposit a lot of cash, the bank charges a fee because it is "more work."

Arrgghh...

Oh by the way, don't ask me about "air miles..."

 

[JDgreen227]

I have had a Visa card issued by Chase for at least 8 years now, it is my primary card. During all those years I have only had to pay a late fee one time, and that was because my mailbox was destroyed by a snowplow and the bill blew away in the wind, but the charge was reasonable, and that was the only time I have ever paid a late fee and interest. Think it was about $27 total. I always pay off my account in full every month, but now, because of the changes in the laws, if I am one day late I get socked with a $35 late fee and my APR goes from 14% to nearly 30%.

What galls me even more is that if I am given a credit by a merchant that is applied to my balance during the period before my payment is due, I do not get credit for that as a "payment", Suppose I have a balance of $100 on my card, and a merchant gives me a credit of $99 to my balance before the $100 is due. Unless I pay them at least a dollar, I end up owing the $35 late fee and interest. Why are credits to my account not considered a payment of sorts?

I had a Mastercard I carried as a backup card, rarely used it. The card issuer told me last year they would charge me a fee of $60 a year to keep the card, and if I charged $1500 a year on it they would credit my account for the $60 fee. Bull roar. So I cancelled.

What makes me most angry about the credit card companies is that even if you have a spotless payment record going back ten years, they will c--- on you for the slightest reason. Know what I find really weird? I carry one card, which is always paid in full every month and I carry a very high credit limit that I don't get close to in a years time if I totaled up every charge I made. My wife has multiple credit cards and carries a balance on them all and pays interest on all of them...she sharges more in a month than I do in six months.

And guess who has a better credit score..she does. If that isn't a farce I don't know what is...