credit card meltdown

P

patrick and linda

New member
top four banks preparing to write off 24% of credit card balance. heard that tid bit in the news last week. thought, ok, how's that going to affect me? no big deal! i'm good!
received in todays mail a letter from ADVANTA, the holder of my company business credit card. they have informed me that the advanta accounts are funded by an independent trust and that trust has decided to stop doing business and therefore, effective may 30, 2009 they have cancelled all advanta business credit card accounts. let me see, that's 8 days notice from the date on the letter! i never maintain a balance, pay in full and on time. so, now must search for another quality company, any recommendations will be welcomed. can't see carry cash for fuel at the dock!
pat
 
Sorry to hear about that problem. I think we shall see many changes real soon after the credit card bill passed. Got a notice from my Shell gas card, they will be a service charge, well time to cut up that card. Neighbor got notice his B of A Visa will add a service charge. I received an offer for a "Black Card Visa" Annual fee of $495 a year!!!! If you add a spouce add on another $195 a year. Why in the world would someone pay that kind of price when I carry only cards without a fee.
 
My GE Bank MasterCard went from a $10k limit to a $1k limit last year. Like you, I never carry a blance. I got no warning!
A friend that works in credit told me that the CC companies started slashing limits to try to minimize possible default losses. This followed closely behind the mortgage companies when they all but eliminated equity loans.
 
Yeah that's pretty wild. The stories about CC companies increasing rates based on where you shop is interesting too. Now and then I'll pick up some tupperware from a discount Job Lot type store - ha ha - hopefully that will not kill my rates!

My favorite is the Starwood Amex. Amex is not accepted everywhere, there is an annual fee of $45 (1st year waived), and the rates are not good, but the point system is really nice. If you're someone who uses the card and pays it off every month it's a great card. We've been able to utilize the points for a lot of benefits including airfare and hotel stays.

http://www201.americanexpress.com/apply ... 459837/0/n
 
Our B of A Visa credit line went from 23K to 11.5K two months ago. We pay off any charges before the end of the billing period so we never carry over a balance.
Our AMEX through Costco has so far stayed the same at 14K, which we likewise pay off before the end of the billing period and never carry over a balance.

I expect that soon we'll get "nailed" big time for annual fees and will have to decide whether the money spent to keep the cards are worth it. They sure are convenient to have and are a necessity to make purchases "on line".

The irony of B of A is that we have investments with them that even though the market has dumped and lowered the value of these investments, I would have thought that with the current value of these investments they wouldn't consider lowering our line of credit. I guess it goes to show that in large financial institutions the "left hand doesn't know what the right hand" is doing. They obviously don't look at the total "value" package of the customer. However, having a charge card credit line at 23K is certainly more than I feel we need and am actually fine with the lowered amount.....it's just the principle of the change that was made.
 
Probably the biggest single consequence of the apparently imminent credit card meltdown is how we are going to handle online buying...I hope Amazon.com and other major online retailers are figuring out how they are going to cope with a world where a lot of us will be cutting up our major bank Visa and MasterCard credit cards. I see Amazon.com has its own Visa credit card. I also see my local credit union is offering a Visa credit card, I think we'll switch, it may not be better but it can't be worse than Bank of America. I think the major banks are just shooting themselves in the foot (in their collective feet) IF we can get credit union or merchant credit cards (Amazon) that don't have fees and don't charge interest if you pay off the balance in full monthly.
 
It will be interesting to see which companies and cards eliminate the grace period. Charging interest from the moment a purchase is made is ridiculous for people who pay off their balance in full each month and will really limit the use of credit cards. I wonder what will happen with the AMEX charge cards (the classic green, gold, and platinum). Since they have no interest rate and you aren't really allowed carry a balance perhaps they will still be available to people who pay off their balance monthly. I do think the annual fees will go up and the benefits will go down, however.
 
SO, HERE'S WHERE I'M AT, SINCE MY ORIGINAL POST REGARDING THIS SUBJECT. I HAD ASKED FOR AND HAD RECEIVED SEVERAL VERY GOOD RECOMMENDATIONS. AFTER REVIEWING EACH RECOMMENDATION I DID DECIDE TO APPLY AND HAVE BEEN APPROVED FOR THE "AMERICAN EXPRESS SIMPLY CASH BUSINESS CARD", (should receive it within 7 to 9 business days) THIS ONE SEEMS TO WORK BEST FOR MY APPLICATION AND GIVES ME THE OPPORTUNITY FOR CASH BACK ON JUST ABOUT EVERY PURCHASE.
there's zero annual fee associated to this account, at least for now.
so, thanks for the impute and always good to hear what each and everyone of you have to say.

best regards
pat
 
One system we won't be using to transfer funds unless we absolutely have to is the Great PaPal Scam.

They take almost 3% of any funds they transfer, INSTANTLY!

ebay bought them out/up a couple of years ago, and has routed as much of the transfers of $$$ on ebay though PayPal.

It's easy to have a uniform and guaranteed system of funds transfer between parties, but 3% for an instant tranfer is pure usery!!!

I constantly lose 3% of everything I take in to them. (Together with ebay listing and final value fees, 18% of the income goes up in smoke!)

On Monday a fellow transfered $1250 from his account to mine, and PayPal took $36.67 in a few seconds!

Talk about being held hostage by your banker/creditor/money exchanger!

"Money changers in the Temple!" (AGAIN)!!!

END OF RANT...

Thanks!

Joe. :amgry
 
I've found that credit unions can be a good source for low interest - no annual fee cards. They don't call you "deadbeats" if you pay off your balance each month, either.

As far as online buying, I personally use PayPal which doesn't charge me a fee for buying, can generate a one time credit card for any transaction that does not accept Paypal, and has worked flawlessly. The only caveat is that it's somewhat like a very safe debit card and charges are instantly debited from the linked bank account. Not a problem for folks used to paying off their credit cards each month though.

We also have an Amazon Rewards Visa card that has no annual fee.

I really think "rewards" are going to disappear in the near future.

Don
 
I use PayPal to pay one of my subcontractors, he loves it even though PayPal nicks him for 2.4 or 2.9 or whatever as he has his money instantly. I really love it because I link my Fidelity sponsored AMEX Card to PayPal with no fees and a rebate of 2% on each purchase. I have to do a couple of extra clicks to move to AMEX from my checking account debit as that is the default with PayPal.

Walldog Grinning
 
I hear ya Joe!

You can send money through PayPal with no fee, but the person collecting will be hit with the 3% charge if the payment was originally funded by a credit card.

As an online vendor I had to research options for receiving credit card payments. Unfortunately there is no way around that 3% magic number. I opted for PayPal as the Payment Gateway for credit card purchases because there were no better alternatives (in terms of cost) and with Ebay more people are familiar and comfortable with it. All the other Payment Gateway companies I researched charge the same rate amount (or more).
 
What's the mystery here?? you charge on your card. The card company loans you the money for 30 days and you pay it off at the end of the month and you don't expect to get charged? How are the card companies supposed to make money for thier investors if you don't carry a balance or have a monthly fee? You don't get something for nothing.

From a real estate lender point of view you should all ways carry a small balance on your credit cards. The question is how much. Your credit will suffer in the long run, or not achieve as high of a score as it could, if you pay in full every month. It will also suffer if you carry to much every month. I leave a $100 of so every month on my cards to maximize my score.

As for the pay pal, what a great service that is. I can sell or buy a item from a total stranger that I will never meet with out having to wait 10 days for his out of state check to clear or bounce. The funds are guaranted and the item can be returned or at least disputed if not what was promised. I don't have to show up at a strangers house with cash in hand. I don't have to pay tax's ( still true for now). I don't even have to carry cash and take the chance of being mugged anymore because of cards and pay pal. And if I loose money I am out the money , If i loose a card I have another one shipped to me over night.

I think we forget how hard it was to travel or purchase out of state before cards and services like pay pal. I have drove from coast to coast with out any cash or checks with no problem several times. I do remember, and I'm not as old as some of you, having to go get traveler checks before a trip and then trying to get Gomer the gas pump moron to take one with out calling his boss at home to approve it. ( battle mountain) . Or waiting around for two days while my boss in Ca. wired funds to a bank in NV so I could get paid and eat.

I almost never carry cash or see a pay check. All my bills and checks are online. I like it very much and I expect to pay for the service that I am receiving. Thank fully we still have ( while it last) a free market that helps keep the price down with competition. Not sure how safe it would be to travel around many countries with enough cash for a week of vacation.
 
matt_unique":1cz9njro said:
I hear ya Joe!
Click to expand...

I hate to burst your bubbles, Joe and Matt, but TANSTAAFL ! Any merchant who ACCEPTS credit card payment is gonna get hit with around 3% per transaction. Your local mechanic, MD, DC, store, anything that doesn't have a significant volume. Spouse has had a merchant account with 4 different banks in the past 20 years and they all have charged her roughly 3% per transaction AND a $30/month "service fee". Add in the cost of the merchant telephone data input terminal and you will rapidly conclude that PayPal is NOT as bad as most folks think. Oh there are tempting ads merchants get for competing mastercard/visa account servicing, but a "free terminal" just means they collect it somewhere else.

In addition, I don't know if the scene has changed in the last few years, but traditional banks used to be very reluctant to allow merchant accounts for online only companies. Brick and Mortar only. PayPal used to be the only player in town.

Don
 
How do the credit card companies make money if we pay off our balance every month, which we do? From the % that they charge each merchant for the item purchased. Our VISA is through Cabela's and they have been an excellent bank/company to deal with. Because of the amount that we charge each year, they put us onto a higher level and reward us with a generous amount of points each year. A very large portion of this is from Marcia's veterinary practice and has included endoscopy machines, chemo drugs and lots of other items. Believe me, they are doing all right on that card!

We had an LL Bean VISA for a number of years and when B of A got involved, they dropped our limit from $35,000 to $5,000! I called to get the limit raised to its previous amount and was told that they couldn't do that because we had missed a few monthly payments and that our credit report showed some dings. We always pay off our cards each month and credit reports are squeaky clean. I requested a copy of our report and there was NOTHING on it as reported by B of A. We cancelled that card the next day.

Think this is bad? Wait and see what happens if the new national sales tax comes to fruition. Trial balloons are being floated now in Washington and there is talk of a 25% tax on all goods and services in order to cover national health care!

Nick
"Valkyrie"
 
Since the credit card companies charge the merchant a fee ranging from 2 to 6%, that fee is included in the price of the goods sold by the merchant.

Even if you purchase for cash, you are paying that fee!!

In California, the banks got a law passed that prohibits a merchant from advertising or posting a lower price if the buyers uses cash.

Tom, why aren't the credit card companies happy with the average 3% fee the merchant pays to them? Three percent for a one month loan is equal to 36% per year!!

How many of us can get 36% annual return on any investment?

If a merchant pays 3% for taking your credit card, they ought to cut the price by at least 2% if you pay cash.

Tom, You said your credit score goes down if you pay off your balance each month. It sounds to me like the financial industry wants us to be in debt and paying interest (to them) all the time. How is someone who can and does pay off their balance each month a poorer risk than someone who carries a balance?
 
I would also bet that there are a lot more people who carry debt from month to month on a credit card rather than pay it off. The credit card companies are making good money off those with carried balances.
 
Larry H":3d36mhor said:
Tom, You said your credit score goes down if you pay off your balance each month. It sounds to me like the financial industry wants us to be in debt and paying interest (to them) all the time. How is someone who can and does pay off their balance each month a poorer risk than someone who carries a balance?
Click to expand...

Much as I hate to agree with a Marine, Tom's technically right, Larry. As I said in an earlier post, you and I are referred to as a "Deadbeats" by the credit card companies and credit rating services grant higher ratings to known good risks. Us older deadbeats don't lose much, but it's true. If some bank set a credit score at 755 or higher for the lowest interest rate and you came in at 754, ain't nothing you can do but walk out of BofA and go to Wells Fargo where the cutoff is 750.

Real life? FICO scores vary but the folks affected the most are new grads and new cardholders with their first cards and NO history at all. They've never had a card so their credit score is way lower than the average Brat. Actually, you come into anyplace with a 700+ score and you'll get first class treatment. Come in with an 800+ score and they'll loan you their receptionist as well. :roll:

Don
 
Sneaks":36wvydjp said:
matt_unique":36wvydjp said:
I hear ya Joe!
Click to expand...

I hate to burst your bubbles, Joe and Matt, but TANSTAAFL ! Any merchant who ACCEPTS credit card payment is gonna get hit with around 3% per transaction. Your local mechanic, MD, DC, store, anything that doesn't have a significant volume. Spouse has had a merchant account with 4 different banks in the past 20 years and they all have charged her roughly 3% per transaction AND a $30/month "service fee". Add in the cost of the merchant telephone data input terminal and you will rapidly conclude that PayPal is NOT as bad as most folks think. Oh there are tempting ads merchants get for competing mastercard/visa account servicing, but a "free terminal" just means they collect it somewhere else.

In addition, I don't know if the scene has changed in the last few years, but traditional banks used to be very reluctant to allow merchant accounts for online only companies. Brick and Mortar only. PayPal used to be the only player in town.

Don
Click to expand...

Hi Don,
I don't know what you mean by TANSTAAFL :D but otherwise I think we're saying the same thing. Merchants cannot get around the 3% fee and many payment gateway providers charge even more. Some have other "service" fees as you point out. There are several gateway providers available to online only merchants these days but PayPal is competitive in that they do not charge service fees.
 
Larry, what he said :wink:

if you do not carry a balance and don't pay some interest then the card company LOSES money. The whole purpose is to make a acceptable profit. So do you work for free? I don't. profit is GOOD. its what built this country. With out profit no one has a job.

Want to come for dinner this saturday?? I will wave the interest on the chicken if you bring cheese cake :lol:
Only thing that will profit that way is my waist line.
 
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