Disney VISA Warning!

[timmac]

We'll see what they have to say about how the credit card companies have found a way to skirt his carefully crafted legislation.

While I am not saying that credit card companies are wonderful entities by any means, I also don't think it's fair to say that they are "skirting carefully crafted legislation". Quite the contrary, it seems... they're following the law precisely (as they should). It seems their doing so has proven that the legislation perhaps wasn't crafted quite so carefully after all.

 

[timmac]

I disagree with your definition of a "good" customer. The credit card companies make money every time you swipe your card. They charge the merchant a fee that runs between 2%-3.5% of the cost of the purchase. Even if you pay off your balance in full each month, they are still making money off of your activity.

They make a fee on that... but is that enough to cover their operational costs? Though admittedly I don't have hard facts on this, I suspect those fees are just a break-even proposition for them.

 

[Shelly F - Ohio]

guess you should have let the vacation expire and then made the payment because the interest rate on the vacation amount would now be the higher interest rate of the two.

 

[Marionnette]

Which is exactly why the Accountability Act was enacted.

Today I plan to make a calls to a couple of my friends who work for the Chair of the Senate Banking Committee. It would be easy enough for the law to say that the payment goes toward the highest interest charges during "that billing cycle" instead of the "on that day".

We'll see what they have to say about how the credit card companies have found a way to skirt his carefully crafted legislation.



When I contacted them, they did agree to remove some interest charges. But, they wouldn't give me back the lower interest rate. She said that I'd have to write a letter asking for it... all the while racking up more high interest charges.

So, I'll be paying it off today. Fortunately, I have the ability to do that. But, I wanted to make the warning to others who may not.

I'm sorry that you fell between the cracks on this one but the law was not so carefully crafted so as to avoid this problem. Unless your payment reached them the day after the 0% promotional rate expired, Chase did exactly what the law dictates. They applied your payment first to the balance with the higher interest rate, which was the balance transfer at 3.99%, instead of the Disney trip at 0%.

I'm glad that you are able to pay off the balance so that you can avoid any further interest. Your post serves as a lesson to all of us to make sure that we understand how our credit cards work.

 

[DisneyEater]

I disagree with your definition of a "good" customer. The credit card companies make money every time you swipe your card. They charge the merchant a fee that runs between 2%-3.5% of the cost of the purchase. Even if you pay off your balance in full each month, they are still making money off of your activity.

I am pretty sure the interchange fees you are talking about go to VISA or Mastercard, not the bank.

 

[ValpoCory]

Unfortunately when consumers do balance transfers and no-interest type deals they eventually run into problems..

I disagree. Many customers who do balance transfers and no-interest type deals do it responsibly and perfectly. They run into problems if they don't understand the rules.

 

[ssawka]

Moral of the story: Have everything paid off by the expiration date of the lowest promotional rate or use two different credit cards.

I am not usually one to favor corporations, however in this case Chase did what they were legally obligated to do. There was no "trickery" and I'm sure if you read the agreement it was all spelled out. It just sucks, that's all, but Chase is not at fault.

 

[bumbershoot]

Which is exactly why the Accountability Act was enacted.

Today I plan to make a calls to a couple of my friends who work for the Chair of the Senate Banking Committee

Before calling the extremely convenient-to-have high-up friends, why not call back and address this: "Before doing so I checked to make sure that the vacation charges wouldn't mess up my balance transfer rates and was assured they wouldn't..."

Someone on the phone there told you you were doing it right. Follow up with that. I imagine that, and even sending in a quick letter like the Chase rep told you to do, would result in faster change than contacting friends who, no doubt, work their rear ends off and might not have a moment for you any time soon. Even if you're paying it in full today, would be good for the Chase rep that told you it would work to know that it didn't.

 

[Shanna-like-Banana]

You can make a payment directly to the package amount under the 0% interest, but you have to wait until you are within 30 days of it expiring.

All you have to do in PHONE in the payment, not online. Simply call, state you are within 30 days of your 0% expiring and you want to make a payment directly to that amount.

I have done it 4 times over the last 3 years. Most recently in January.

 

[jensen]

Before calling the extremely convenient-to-have high-up friends, why not call back and address this: "Before doing so I checked to make sure that the vacation charges wouldn't mess up my balance transfer rates and was assured they wouldn't..."

Someone on the phone there told you you were doing it right. Follow up with that. I imagine that, and even sending in a quick letter like the Chase rep told you to do, would result in faster change than contacting friends who, no doubt, work their rear ends off and might not have a moment for you any time soon. Even if you're paying it in full today, would be good for the Chase rep that told you it would work to know that it didn't.

I actually am friends with all of the people who work in the Senator's local office and several who work in his other offices. Those "high-up" people do have friends... I actually had drinks with one of them last night, but completely forgot to bring this issue up. Of course, I don't expect them to help me resolve my personal situation. But, they should be aware of how the legislation affected me.

And for those who don't think you should contact elected officials when something like this happens, please think again. I am an elected official myself and I greatly appreciate when my constituents contact me to let me know how legislation I oversee has helped or hindered their circumstances. It's rare that I can do anything to affect their specific situation, but knowing about it allows me to craft changes to help others in the future.

 

[Tinkerbellie16]

Welcome to the world of credit cards. They are there to trip you up. They will try anything and everything to make money off of you, sorry but it is true. I worked for a major one for years.

The only "good" customer to them is one that revolves and pays interest. To them a person that pays off an account or has balances with a low promo rate of balance transfer rate is a bad customer, meaning they aren't making money off of you.

Customers that got the most line increases are ones that didn't pay off the balances and always had about 50% of their credit line tied up. Customers with no balances that paid off their entire balances every month got very little increase, should they request it. Makes you wonder, doesn't it?

Bottom line, they are a business and they are in it to make money and they are hoping that they can get all the interest our of you possible and will do anything to make sure it happens.

I disagree with your definition of a "good" customer. The credit card companies make money every time you swipe your card. They charge the merchant a fee that runs between 2%-3.5% of the cost of the purchase. Even if you pay off your balance in full each month, they are still making money off of your activity.

And when it comes to lines of credit, well my Disney Visa LOC is obscenely high and we NEVER carry a balance. I didn't even ask for it. That's what they extended to me when I applied. I have never even approached 50% of the max, even when we were remodeling our kitchen.

And again, Chase didn't do anything to the OP that they were not required to do as per the law. They didn't set out to screw over the OP. It was the OP who did not fully understand the terms of her credit agreement.

They make a fee on that... but is that enough to cover their operational costs? Though admittedly I don't have hard facts on this, I suspect those fees are just a break-even proposition for them.

I am pretty sure the interchange fees you are talking about go to VISA or Mastercard, not the bank.

I apologize for going but I hope I can clear up some of the comments (and some assumptions) regarding credit cards. This is part of my expertise where I work (global finance and information technology) and I do support our credit card payment process.

First of all, no company is going to be around for more than a year or two if they couldn't make money off of their product - which includes credit cards!

As for the 'good customer', the credit card company does make money off of consumers who do not pay their balance every month with interest and fees. But they can NOT maintain those customers alone! They need CASH - or folks that pay off their full balance. This goes to their Income statement and Balance sheet and makes them look really good especially if they are publicly traded. This CASH also pays for their operating expenses.

I want to explain the fees but before I do, you have to realize that Visa and Mastercard are brands. Banks are the ones issuing the credit cards with that brand. Depending on a multitude of factors (that are so intricate that I could not write them all down without writing a book), the merchant fee varies usually from 2-3%. Most businesses do not even know the fee until the credit card transaction is settled (i.e. the business is paid). The business pays a fee for accepting a credit card payment. This fee is going to the issuing bank. For example, if I accept a Visa payment of $100 after I have received Chase's authorization, I will send over information to Chase to ask them for that $100 usually overnight (for small businesses, it may take them a couple of days but they have to hurry to meet the authorization deadline of 7 days). Chase may send me $97.25 because the fee for that particular transaction is 2.75%. Chase is IMMEDIATELY gaining that amount. So even if you pay in full after 25 days or so, they have made 2.75% up front! This present vs. future value of money is incredibly significant. For $100 it is minor but when you are talking about the amount of transactions that go through credit cards each day, it is astounding. And if Chase has to wait to get paid by a consumer that does not pay each month, it eats into that 2.75% so they are going to hit you with fees and interest.

Now don't get me started on authorizations, expirations, and what it does to your available credit limit