USURY

[ultrarunner]

Just spoke with my credit union... they offer a business checking that pays almost 1% on account balances...

I have a small business with business license since 1982... Went in today with Business Card, 5 years of business licenses and my tax return only to learn they no longer open business accounts unless your business has a fictitious business name... no where in the documentation does it say this???

Just another example of cat and mouse...

This thread touches a nerve...

 

[chopped]

For many years I had a Visa card always paid complete balance every month processing center was in IL.never had a problem.
Then they changed their processing center to Atlanta GA.that's when the problems started,I would send out payment 10 days before due date.
Several mos. later I got a late payment charge and interest charge I called them up and told them that the payment was made 10 days before it was due they removed the charge and told me to send it out sooner OK so I mail it out 12 days before due date.
Again 2mos go by and the same thing again they removed the charges and told me to mail it out earlier so I mail the payment 14 days before due date.
And yet again 2 mos another late charge called them up they said it was my problem and they would not take the charges off I talked to a supervisor and got no where and they were just plain nasty,I told them I would pay the balance and the charges and they could stick the card where the sun never shined.
Fast forward about 1 1/2 years later I get a letter from a legal firm for a class action suit against Visa for not processing payments in a timely matter it stated that Visa was holding back posting to accounts up to 10 days,I never did send the paperwork back to the attorneys figuring that the postage stamp would cost me more than I would get back from the lawsuit

Interesting its clear that they did this just to get the fees and chances are they will still come out ahead even after the suit makes its payout.(sort of like at supermarket her if its priced wrong they give the product and 2 dollars for bringing it to their attention:laughing(yet they dont seem to run and change the price)One week i got three gallons of milk and 6 dollars..lol They did ok as many poeople paid the high price , (they dont look at the slip).
I guess there is good with paying it online if possible...

 

[JDgreen227]

First you have to understand what a "credit score" is. It is not what you think.

It is not a figure to determine how credit-worthy you are or how you are financially able to pay off loans.

It is a figure that reflects how much money the credit card companies can make off of you in high interest and other fees. The more money they make off of you gives you a higher credit score because you are a more valuable customer for credit card companies.

Us "deadbeats" who can afford to pay off our cards each month with no interest charges do not generate large incomes for the companies each month, hence the lower credit score rating.

A good credit score rating is the same to a bank as a platinum casino card is to a casino. It simply shows that you make THEM a lot of money.

I am sorry, I respectfully disagree with that reasoning, many people do think the same thing, that the more money credit card companies make off a customer the higher their credit score. Nothing can be further from the truth. How much you owe and how much you pay in interest have NO BEARING on your credit score, the reverse is usually true.

According to Wikipedia, credit scores are a numerical expression based on a statistical analysis of a persons credit files, to represent the creditworthiness of that person. A CREDIT SCORE IS PRIMARILY BASED ON CREDIT REPORT INFORMATION TYPICALLY SOURCED FROM CREDIT BUREAUS. (emphasis added)

Lender, such as banks and CREDIT CARD COMPANIES (emphasis added) use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt.

Part of the Wikipedia information does state "Lenders also use credit scores to determine which customers are most likely to bring in the most revenue" but nowhere does it state the lenders give high credit scores to those customers who DO pay a lot of interest. NOWHERE. PERIOD.

I don't like to disagree, but thought the issue should stand corrected.

 

[chopped]

My credit score is through the sky. I have NEVER paid any interest in 30 plus years.So I have a perfect score . do I care?? not at all.I dont need any credit from any company. I do disagreed that my house insurance is based on my credit score. To me it dont matter. I pay the insurance with cash. simple transaction to me
I would like to buy insurance from x company. here is the premium in us currency. Perhaps I should ask a credit check on the insurance company?

 

[RobertBrown]

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.

Do it! From now on read the credit card ageement statements sent to you. You agreed to the terms. Now when they they execute the terms of the contract your complaining. I hate to tell you but that's the truth.
Use cash and don't live beyond your means. If you do then honor the contract.
Money As Debt

 

[tallyho8]

Part of the Wikipedia information does state "Lenders also use credit scores to determine which customers are most likely to bring in the most revenue" but nowhere does it state the lenders give high credit scores to those customers who DO pay a lot of interest. NOWHERE. PERIOD.

And how do these customers bring in the most revenue?
Paying interest charges is the number one way. The second is their volume of credit card purchases which causes the merchants to pay the banks revenue.

If a customer makes a $100 charge on a card the merchant may pay the bank up to $3 in fees. But if the customer makes the minimum payments he may pay the bank $30 in interest charges before that charge is paid off.

Naturally there are other reasons also for your credit score such as credit worthiness because a low score will surely be given to someone who defaults on their bill payments.

But I stand by my original statement that if 2 people have identical income and have identical charges on their credit cards and everything else about their credit history is the same, the one who pays his credit card bill on time with interest payments will have a higher credit score than the person who pays his credit card bill in full each month without paying any interest.


PS A friendly disagreement in a forum is not a bad thing, it merely gives the opposing parties the chance to state what they have learned in different ways.

 

[smstonypoint]

But I stand by my original statement that if 2 people have identical income and have identical charges on their credit cards and everything else about their credit history is the same, the one who pays his credit card bill on time with interest payments will have a higher credit score than the person who pays his credit card bill in full each month without paying any interest.


PS A friendly disagreement in a forum is not a bad thing, it merely gives the opposing parties the chance to state what they have learned in different ways.

In the spirit of friendly disagreement, are you an employee of Fair Isaac, the folks who provide the FICO scores? If so, you are probably in violation of the company's policies regarding the disclosure of their proprietary scoring algorithm. If not, your claim is subject to debate.

"While putting more money towards savings is usually a good idea, it's not necessarily going to improve your FICO score. Your FICO score does not consider the amount of disposable cash you have at any given time. Therefore, the amount of money you keep in savings doesn't impact your FICO score.

As far as spending less, that could have an affect on your FICO score. If you typically use your credit cards for purchases and you don't always pay off the balance on those credit cards, then you may notice an improvement in your score by curbing your spending habits. Your FICO score factors in the balance on your revolving credit accounts (for example, credit cards). It's a good idea to keep the balances on your credit cards low and pay them off each month. By limiting your spending, you may accomplish both!

Will spending less and saving more improve my FICO score?

Steve

 

[tallyho8]

Also from the FICO web site "Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your credit score."

They may say "It's a good idea to keep the balances on your credit cards low and pay them off each month. By limiting your spending, you may accomplish both!" They say this is a good idea but they don't say it will raise your credit score.

You need to keep your balances low to improve your "credit utilization ratio" but nowhere does it say a zero c.u.r. will improve your credit score, only that a high c.u.r. will negatively affect your score.

Those with no credit history of paying off installment loans are generally higher risks which lowers their scores. Just charging on the card and paying it off at the end of the month is more or less considered a cash sale and not an installment loan thereby not giving you a credit history of paying off loans.

And for those who think that canceling a credit card will improve their score, it is just the opposite. This will almost always negatively impact your credit score.

 

[dmccarty]

Ya'll may be arguing over the number of angels that can be on the end of a pin.

I have read the canceling a credit card will lower your score. I have also read the opposite all from the same source so I have not idea as to the reality of the matter.

But does it matter that much?

Going back to the two people with same income, debts, etc, with one paying off the CC every month and once paying a balance on time, if one cancels or gets a new CC will that change their score that much?

My guess is not much.

I am a dead beat. :thumbsup: We put almost everything on the CC since it allows me to track our spending and we get 1% cash back on the purchases.

We have a high credit score in spite of us being dead beats, :laughing:, and we still get CC applications in the mail. Not as many as we used too but we are still getting them in the mail. I know we got at least two last week.

It still scares me that the banks hand out credit they way they do. Maybe they are "nice" to us since we have a high score. But we have TWO cards from one bank. I needed a backup card since I wanted to cancel an older card I did not use. Long story short but we ended up with TWO cards from the same bank. WHY the bank wold send me two cards is beyond me. :confused3:

Later,
Dan

 

[jinman]

My wife and I just checked our scores not long ago and I went ahead and paid for the full Experian report just out of curiosity. Our score was two points off the maximum and I was elated while my wife wondered why they docked us two points.:confused2: Just goes to show you that there are different views of everything.

 

[JDgreen227]

Also from the FICO web site "Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your credit score."

They may say "It's a good idea to keep the balances on your credit cards low and pay them off each month. By limiting your spending, you may accomplish both!" They say this is a good idea but they don't say it will raise your credit score.

You need to keep your balances low to improve your "credit utilization ratio" but nowhere does it say a zero c.u.r. will improve your credit score, only that a high c.u.r. will negatively affect your score.

Those with no credit history of paying off installment loans are generally higher risks which lowers their scores. Just charging on the card and paying it off at the end of the month is more or less considered a cash sale and not an installment loan thereby not giving you a credit history of paying off loans.

And for those who think that canceling a credit card will improve their score, it is just the opposite. This will almost always negatively impact your credit score.

Well stated on your part, hey, I am giving you a FRIENDLY AGREEMENT HERE. Interesting point you make about paying off the card each month being considered a cash sale and not an installment loan, I never thought of it being viewed that way.

What baffles me is, when someone has multiple cards and carries a balance on them with high credit limits, versus me with a high credit limit on one card that never gets close to the balance, it seems to me the lenders would be concerned that the person with several cards could possibly charge all of them up to the limit and the holder would have a tough time paying on them. And if I always pay off my card, doesn't that show more responsibility and make me less likely to go on a huge spending spree like the mega card user has the ability to do? I can charge $20 grand at most, he could charge several times that much. To me, having fewer open accounts should mean less risk for the lenders.

 

[tallyho8]

I actually have 3 credit cards from the same bank and 1 from another bank that I use.

I have one from bank C that pays a 5% rebate on purchases from grocery stores and drugstores. Another one from bank C that pays a 3% rebate at Home Depot, Lowe's and office supply stores and a third one that I have to use once a month to get my free business checking account. They all pay 1% rebate on everything else.

The one I use from bank B pays a 5% rebate at gas stations. This lowers my gas bill about 15 cents a gallon.

I have never paid one cent of interest or fees on a credit card in my life and the last time I checked my FICO score a few years ago it was 801.

Most of what I have learned about credit scores, I learned while helping others discover ways to improve their scores. Most people with low scores can learn how to improve their score but will go through their lives with low scores due to their desired lifestyle.

 

[tallyho8]

What baffles me is, when someone has multiple cards and carries a balance on them with high credit limits, versus me with a high credit limit on one card that never gets close to the balance, it seems to me the lenders would be concerned that the person with several cards could possibly charge all of them up to the limit and the holder would have a tough time paying on them. And if I always pay off my card, doesn't that show more responsibility and make me less likely to go on a huge spending spree like the mega card user has the ability to do? I can charge $20 grand at most, he could charge several times that much. To me, having fewer open accounts should mean less risk for the lenders.

This is why "credit history" is such an important part of figuring out your credit score. A person with a history of making many installment loans and paying them all off on time is much less likely to charge all his cards to the limit and then default on payments and therefore gets a high credit score.

The bank has no way of knowing how creditworthy a person is who has never had an installment loan and no record of timely paybacks.

The person with multiple cards with a total limit of $50,000 on them who has a history of carrying a $1000 balance has a c.u.r. (credit utilization record) of 2% while a person with one card with a limit of $5000 and a history of carrying a balance of $500 has a c.u.r. of 10% and this higher c.u.r will lower his credit score.

 

[tallyho8]

My wife and I just checked our scores not long ago and I went ahead and paid for the full Experian report just out of curiosity. Our score was two points off the maximum and I was elated while my wife wondered why they docked us two points.:confused2: Just goes to show you that there are different views of everything.

A quote, "One of the most popular credit-scoring models, the FICO score, can range from 300 (very bad) to 850 (solid gold). But don't expect to see many 850s walking around.
"It's very rare to be there," says Maxine Sweet, vice president of public affairs with Experian, one of the three major credit bureaus. "I've never seen it."

And Experian has scores from 501 to 990 so your score varies widely from one reporting agency to another.

Experian has been highly criticized for it's widely publicized "free credit report.com" which usually winds up not being free.

 

[ultrarunner]

I have not checked mine in the last year... I imagine BofA terminating my HELOC had a negative impact.

BofA said it was a business decision and affected tens of thousands of California customers. Had drawn the max at one time, had a zero balance when cancelled.

Anyone in Banking know how this affects one's FICO?

As a person that routinely verified credit to determine eligibility to rent... the company would often let people with solid income history and no credit rent... the key was no credit... because, at least in the markets I worked... there were so many people with a history of bad credit it didn't leave many with good or no credit.

Everyday, 20 somethings would apply to rent and their credit report would come back with pages of charge offs... everything from charge cards, cell phone bills, jewelry stores, rent to own, car notes... anyone can have no credit... it takes effort to have page after page of bad credit.

 

[JDgreen227]

I actually have 3 credit cards from the same bank and 1 from another bank that I use.

I have one from bank C that pays a 5% rebate on purchases from grocery stores and drugstores. Another one from bank C that pays a 3% rebate at Home Depot, Lowe's and office supply stores and a third one that I have to use once a month to get my free business checking account. They all pay 1% rebate on everything else.

The one I use from bank B pays a 5% rebate at gas stations. This lowers my gas bill about 15 cents a gallon.

I have never paid one cent of interest or fees on a credit card in my life and the last time I checked my FICO score a few years ago it was 801.

Most of what I have learned about credit scores, I learned while helping others discover ways to improve their scores. Most people with low scores can learn how to improve their score but will go through their lives with low scores due to their desired lifestyle.

That is a respectable score, ours is about 780 right now. Many people argue that it is wrong for insurance companies to base premiums on credit scoring but to me, those who have good credit tend to be more responisible in other areas of their lives. A Michigan court recently ruled that insurance companies can legally use credit scores to set premiums...I support that decision.

 

[ultrarunner]

That is a respectable score, ours is about 780 right now. Many people argue that it is wrong for insurance companies to base premiums on credit scoring but to me, those who have good credit tend to be more responisible in other areas of their lives. A Michigan court recently ruled that insurance companies can legally use credit scores to set premiums...I support that decision.

When a new company was in the process of buying the company where I have worked for 19 years... we all had to reapply for our jobs... part of the package included authorization for credit and driving records... the company has no vehicles.

Anyway, the sale did not go through... I felt the process was over the top because it required listing every job with reported income since high school and clearly stated negative credit or driver license information may be cause for not hiring.

Several long time employees refused and one is currently enjoying unemployment insurance till he is eligible for retirement this year at age 62.

Oh... they also wanted High School and College transcripts???

 

[inveresk]

Do it! From now on read the credit card ageement statements sent to you. You agreed to the terms. Now when they they execute the terms of the contract your complaining. I hate to tell you but that's the truth.
Use cash and don't live beyond your means. If you do then honor the contract.
Money As Debt

As it happens, I carry no debt - no car loans, no mortgage nor any other form of debt. That wouldn't be the case if I did other than live within my means. Although at times in my youth and young adulthood I struggled financially, I've not had that problem for some years now.

On paying for everything in cash, in this day and age it's simply not realistic. It's sad but true that plastic is a necessary part of contemporary financial life.

The options today are cash, cheques, debit cards, credit cards, wire transfer, internet banking or paypal. You can't book a hotel room or reserve car hire without plastic. Cheques are being phased out. Debit cards are no good for telephone or internet purchases. Internet banking is great for companies and utilities that have regular billing but not for one-off purchases. A condition of paypal, if you don't use plastic, is that they have the facility to direct debit from your bank account. I'm even more averse to allowing third parties to dip into my bank account to remove what they think they are owed or have earned than I am of plastic.

Sure, I signed the agreement and, yes, the terms were explicit. However, that doesn't make those conditions right nor reasonable, nor does it negate my right in a free society to complain about injustice. $53 interest on a $3 shortfall is not justified whatever way you cut it. That isn't changed by what the fine print says. I believe MC knows that, which is why they were so quick to offer a refund. Refund or not, legal or not, that level of gouging warrants complaint directly to the company, to my member of parliament, to the banking ombudsman and to the community at large through forums like this.

 

[LBrown59]

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...

Credit reporting is just one big racket.

 

[chopped]

Its a shame that now aday we have to worry so much about a 'good' score.A good score is part of a lending system that no clue whatsover if people are able o pay or no.I enjoy it when they ask me my score. I I get into a daze. and ask what it is.
To each their own I guess.The car dealer gets nervious and doesnt want to sell me a car. well thats fine..probably figures that i dont have the money anyways.LOL
i just feel they should put so much bearing on the scores...But that my opinion and I know im the odd duck out here.