New CC card "fun" tactics.. Re: rewards..

[C.Ann]

For those who use CC's and carry a balance, make sure your payments aren't late!!

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http://news.yahoo.com/s/ap_travel/20091118/ap_tr_ge/us_travel_flight_plan_credit_card_fees

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Another credit card fee is about to fly

Wed Nov 18, 11:33 am ET

ATLANTA – Another fee is coming in the new year for airline and hotel customers — this time from your credit card company.

The message: Pay your bill on time or forfeit the miles or points you thought you earned for making purchases on your card during that month.

To get the rewards back, it's going to cost you.

American Express Co. is sending notices to customers who hold its cobranded cards with Delta Air Lines, JetBlue, Hilton Hotels and Starwood Hotels, that beginning in January rewards won't be transferred to loyalty accounts with those partners if you are late paying your bill.

You'll be hit with a $29 reinstatement fee if you want the rewards back. That fee is on top of the late-payment fee — $19 or $38 depending on your balance. A penalty interest rate, currently 27 percent, would be assessed on future balances.

American Express is changing the policy for its cobranded cards to align those cards with its other Amex cards that have carried the same policy for months or years.

The policy doesn't just affect the habitual late payer, it affects everyone, said John Ulzheimer, president of educational services for Credit.com. "I think over the course of time, people miss a payment at least once because of unforeseen circumstances like something getting lost in the mail or a long vacation taking your focus off making your payments," he said.

Other card issuers, like Citigroup Inc. and JP Morgan Chase & Co., also have cobranded credit cards with airlines and hotels. Citi is paired with American Airlines. Chase is paired with United Airlines and Marriott International Inc.

Citi spokesman Mark Rodgers said points earned on the company's Citi cards that offer rewards through the company's own rewards program may not be available for redemption if a card holder pays late one month, and in some cases a fee for reinstatement may apply. Rodgers said Citi is not considering reinstatement fees for its cobranded cards with American Airlines and Hilton.

JP Morgan Chase spokeswoman Tanya Madison said that if an account is past due for the cobranded United card, a customer will not earn miles until the account is paid. "While we do not go back and confiscate miles, we will stop awarding miles on spend going forward until the account's paid in full," Madison said.

Consumer advocates aren't surprised by American Express' move considering tough new rules for credit card companies scheduled to go into effect in February. Under the new law, lenders won't be able to increase rates on existing balances unless a person is more than 60 days behind on a payment.

"Essentially if you can't charge one fee, you create a new fee," Ulzheimer said.

Banks deny that they are increasing rates ahead of the February deadline and blame fee increases on the economic downturn. American Express isn't saying how much revenue it expects to generate from the new reward reinstatement fee for cobranded cards.

American Express spokeswoman Desiree Fish said her company currently transfers Delta SkyMiles to its cardholders' loyalty accounts for eligible purchases even if they are late paying their bill.

She said that in addition to changing the policy for cobranded cards to be in line with its other cards, American Express also wants to "incentivize good behavior, to say you should pay on time, and if you don't there are penalties."

Delta said in a statement that the changes to American Express' terms and conditions are consistent with changes across the credit card industry and also include new benefits for Delta customers, including the ability to earn unlimited SkyMiles for purchases on the credit card each year.

Here are some steps you can take to avoid the headache of losing your airline or hotel rewards earned on your credit card:

--Always know when your bill is due and make sure you pay it on time. Set up e-mail billing alerts for your card.

--Manage your account online. Schedule electronic payments using your checking account at your bank. Many banks allow free online billpay, and with major credit card companies the payments often post the same day as the payment is scheduled.

--Read the fine print. Don't throw away those legal notices you get from credit card companies. Terms and conditions are being changed all the time. Know the terms, so you can protect your credit and your rewards.

 

[wvjules]

I see nothing unfair about that. Don't pay the bill on time; don't get rewards. I guess since they took away the late/overlimit fee it was the only recourse they have.

 

[peggster]

I see nothing unfair about that. Don't pay the bill on time; don't get rewards. I guess since they took away the late/overlimit fee it was the only recourse they have.

I'm confused: the article says this would be on top of the late payment fee of $19 or $38. Does the new legislation eliminate late payment fees?

 

[GoldieSaysMeep]

I see nothing unfair about that. Don't pay the bill on time; don't get rewards. I guess since they took away the late/overlimit fee it was the only recourse they have.

I agree with this.

I’m no fan of cc companys. They’ve balance chased me and hurt my utilization ratios which infuriates me. I had a fixed rate loan suddenly change to a variable rate loan (thanks, BoA  ) and I must have made them mad when I paid 50% of my balance in one shot. Because a week later they lowered my credit limit to within 2K of the new balance.

But I’ve never been hit with any unfair “fees”, probably because I always pay my bill on time. Honestly, it seems like common sense to me. I understand times are tough and sometimes you just can’t pay the bills, but it seems like for many people, not paying their bills or going way over their limit is just a way of life…?

People need to learn to live within their means.

Sometimes, while reading online, I feel like I’m the only one who pays my bill on time and never deals with these problems.

For instance, I was told to read creditboards.com by someone once, to get some info and after persusing that board for a few days, I decided not to post because it seems like I already have a far better credit score than most of the people I saw there, and I have never had a charge off or delinquent account. Honestly, I did feel better after reading that board because I realized that what I thought were bad problems I had were absolutely not that bad compared to, apparently, most.

The question I had for the credit boards, by the way, was what happens if an old, old account that still shows on my report…one that I have no access to because I have not received paperwork on it for 5-7 years for instance, what if this account suddenly imposes an annual fee? How will I find out? I worry because of the 13 open accounts on my CR, I only have 2 cards and one personal loan I pay off of a web site. The others I have had no contact with in over 5 years, none of them have any balance and they are basically just sitting there helping my debt to credit ratio. Does anyone on the DIS have any experience with this?

 

[wvjules]

I'm confused: the article says this would be on top of the late payment fee of $19 or $38. Does the new legislation eliminate late payment fees?

It was my understanding that the new legislation did infact eliminate over the limit and late payment fees. If I am wrong, someone will correct me. lol

 

[eliza61]

I agree with this.

a way of life…?

People need to learn to live within their means.

Sometimes, while reading online, I feel like I’m the only one who pays my bill on time and never deals with these problems.



?

You know Goldie, some times things happen in life. 1 late payment does not mean you are "Living beyond your means" . Jeez people My mother in law had her car broken into and they stole her bag with all her bills in it. It took her a while to contact the police, credit card companies etc etc. She was 1 day late and according to you she's a dead beat.


I'm glad you never have problems and don't have to deal with these things but could you cut the rest of us a break from the broad stroke assumptions.

 

[eliza61]

It was my understanding that the new legislation did infact eliminate over the limit and late payment fees. If I am wrong, someone will correct me. lol

The new legislation says that a payment has to be at least 60 days late before outrageous charges can be assesed. This is to protect the people who doing honestly pay their bills but because of some thing as simple as a pocket book left in a cab, can cause a payment to be 1 hour late.

 

[crisi]

I make token payments every two weeks on the cards I carry. I pay the bill in full when it arrives, but just have an automatic payment set up for a "minimum payment amount." I started this when I stopped trusting the card companies to get my bills to me in time for me to pay them, or credit my account in a timely manner.

ETA: Also helps in the cases of "stuff happens" - the kids bring in the mail and the bill gets set on top of the washer - only to fall behind the washer and get found a year later. I go on vacation and miss payment dates. Everyone in the house gets the flu and I'm too sick and busy to get bills paid.

 

[wdwfan16]

I make my electronic payments the day the bill arrives and then check my account a day or two later to see that it not only posted but cleared.

 

[crisi]

I make my electronic payments the day the bill arrives and then check my account a day or two later to see that it not only posted but cleared.

Yeah, I got caught that way, not once, but twice....with bills that arrived very late in the cycle and credits not posting in a timely manner. The time on the phone with customer service to get charges reversed...not worth it.

(I think both those things were addressed in the reform bill...both sleazy card practices. And my phone company just did it - send a bill that arrived 11/3 and was due 10/30).

 

[wdwfan16]

Yeah, I got caught that way, not once, but twice....with bills that arrived very late in the cycle and credits not posting in a timely manner. The time on the phone with customer service to get charges reversed...not worth it.

(I think both those things were addressed in the reform bill...both sleazy card practices. And my phone company just did it - send a bill that arrived 11/3 and was due 10/30).

Each time I pay a bill I check back a month to see what else I paid at that time. I wait a few days and then call or login to see what I owe and then send the electronic payment.

I think it helps when you only have a limited number of different things to pay. We route many to our CC and only pay the ones that don't let us to that or that charge a fee to do that.

 

[C.Ann]

I see nothing unfair about that. Don't pay the bill on time; don't get rewards. I guess since they took away the late/overlimit fee it was the only recourse they have.

Did I miss the part where anyone said it was "unfair"..

Just a PSA for those who use CC's - count on the rewards - and then "life gets in the way"..

I don't use CC's at all - just thought it might be helpful info for those on the BB who do..

 

[Free4Life11]

I'm not surprised. They are starting to charge fees for everything. I've never had a late fee, but I did get hit with an over the limit fee when the interest put me $3 over my limit.

What bugs me is when you call or log in, they tell you you have $50 available credit or whatever knowing full well you are going to be charged interest. Unfortunately, I had a balance transfer offer that I forgot was expiring that month and the interest was higher than I expected.

Next month I called to ask what my beginning balance was so that I could personally calculate the average daily balance and interest rate. They were unable to provide me with any information; the only amount they could tell me was my total balance on the specfic day I called, but they couldn't tell me how much of that balance was at my purchase interest rate or how much was at my balance transfer rate.

I can't wait until my cards are paid off then I am done with credit cards for good.

 

[GoldieSaysMeep]

I make my electronic payments the day the bill arrives and then check my account a day or two later to see that it not only posted but cleared.

I have paid my bills online since I could do this. Years now. Probably at least 6 or 7 years.

I don’t even get paper statements on two of my 3 with balances. I look at them online.

This is why, quite frankly, it baffles me when people say the mail got lost or something like that. I don’t personally know anyone who pays their bills by snail mail anymore. Maybe it’s a regional or generational thing? I’m in my mid 30’s and have paid my bills like this for literally as long as I can remember. And so has my mom who is in her 60’s…

I would not trust my bills being paid on time to the postal service and the mail room at these cc companies. I pay online and get an instant email confirming that I paid. I don’t even use my bank’s billpay service to pay, I pay right off the cc company web site. It’s free. It takes 20 seconds. It assures that my bills are paid at least a week before they are due.

I never said a person who misses one payment is a deadbeat. However, it makes NO SENSE to me that a person who pays on a bill every month would not be aware of when that bill is due to prepare to make a payment on that date. It’s generally the same date every month.

Are they a deadbeat? No.

Are they living beyond their means? Not necessarily (although if they can’t afford to make the payment until the day it’s due, they probably are).

But…Are they incredibly unorganized? Absolutely.

For as long as I can recall, I have kept not only a computer spreadsheet of all my due dates and balances and amounts owed, but I also write this basic info down on a plain old fashioned wall calendar I hang at my desk. (ie. 17th car payment due -$227, 30th Best Buy card due -20 ).

 

[bumbershoot]

I had a fixed rate loan suddenly change to a variable rate loan (thanks, BoA  ) and I must have made them mad when I paid 50% of my balance in one shot. Because a week later they lowered my credit limit to within 2K of the new balance.

LOL. My hubby and I have fun conversations about what Chase's computers are "saying" when they receive our payments. We decided that we hated owing on the car, and hubby tried to refinance with them (we agreed to sick and wrong interest b/c they were the only ones who would give him a loan since he had no credit history for the last 10+ years), but they turned us down. That just made us angry like the Hulk, and we've started throwing everything we can at them.

I just paid the December payment in November, and now we don't own until February. No explanation, just "next payment due in February". Of course we're not taking them up on the "kind" offer, b/c we know very well what sort of interest would be racked up during that time...

But we imagine the Chase computers saying "wait, what? what's happening? their balance is going down by thousands! help! if only we'd refinanced them! we miscalculated! quick, give them a 2+ month "grace" period!"

We have fun in strange ways 'round here...



But I think that the fee to get the rewards "back" is semi-reasonable, as long as everyone knows about it...

 

[GoldieSaysMeep]

LOL. My hubby and I have fun conversations about what Chase's computers are "saying" when they receive our payments. We decided that we hated owing on the car, and hubby tried to refinance with them (we agreed to sick and wrong interest b/c they were the only ones who would give him a loan since he had no credit history for the last 10+ years), but they turned us down. That just made us angry like the Hulk, and we've started throwing everything we can at them.

I just paid the December payment in November, and now we don't own until February. No explanation, just "next payment due in February". Of course we're not taking them up on the "kind" offer, b/c we know very well what sort of interest would be racked up during that time...

But we imagine the Chase computers saying "wait, what? what's happening? their balance is going down by thousands! help! if only we'd refinanced them! we miscalculated! quick, give them a 2+ month "grace" period!"

We have fun in strange ways 'round here...



But I think that the fee to get the rewards "back" is semi-reasonable, as long as everyone knows about it...

Yup, I imagine someone at BoA saw my last large payment and said "Oh no... must do something to get back at her!"

Aside from effecting my credit score by messing with my debt/credit ratio, I couldn't care less if they just close the account. It was a Gold Option Loan originally through MBNA and from what I have seen online, everyone (like me) who had the fixed rate is suddenly going to have a variable rate come 2010.

My main goal in life right now is to become debt free. If I were to only pay the minimums (which simply is not going to be the case because I always pay over the min) this goal would be reached within 2 years. Likely it will be less than that unless something catastrophic happens. My company is actually hiring and my job is secure (I'm lucky).

All I can say to those who worry that they might become too busy or whatever to remember to pay your bills...seriously, sign up to pay online or at the very least get a calendar that has plenty of space for writing. Know when the bills are due. Try to avoid snail mail. Keep records of payment. Most cc companies where you pay online keep a detailed record of payment history.

 

[S. C.]

Bump!

 

[crisi]

Another thing I discovered is that my bank will "clear" electronic payments even if the check isn't cashed. Had that issue with my dentist, who sent me an overdue bill. Called them with "I showed this paid and cleared two months ago." Called the bank and - well, they took the money out of my account, but the dentist had never cashed the check - the money was in "holding."

Did it again with the orthodontist. This time I had overpaid by one month too many and they sent the uncashed check back to me - but even though the check had never been cashed, it had "cleared" my bank.

 

[Chicago526]

Of all the stupid ideas the CC companies have come up with over the years...this actually isn't one of them. It make sense that you only get the rewards if you pay on time. Even the reinstatement fee makes sense, because it's optional. If you don't want to pay it, then don't...you just don't get your points/miles/rewards either.

I pay all my bills online, but I still get paper statements as I'm affraid if I do it electronicly I'll lose track of what's due when (I actually don't check my email that often!). I get the bill in the mail and I schedule the payment that very second, then stamp the bill "PAID" with my little stamper and I file it. Now I may schedule it not to be paid until a few days from now, say once my next paycheck is deposited, but it's in the system and I know it will be taken care of. My CC's I pay on the actual CC website and not through my bank's bill pay system for extra assurance that the payment is taken care of.

And of course I always check to make sure it all goes through. In fact I download all my online banking activity into Quicken each morning and also have a spread sheet with this months budget so I know if our spending is on track or not. I can spot if we are going to run short and start bouncing payments, and can schedule things accordingly so that nothing is late and yet we don't go into a negative balance.

I got burned on snail mail payments with First USA (bought several times and is now Chase), I sent it later than usual because my father forgot to mail it for me one month (I forget why I asked him to). It still should have gotten there on time but I'm 99% sure they actually held processing it until after it was due in order to be able to charge me a late fee. I say this because I know how long it takes for my payments to get to where they are going, and there WAS enough time for it to make it, but it just so happens the payment posted a day late. Plus I found out a year later that First USA had been sued and fined over doing just that, they had actually gotten caught doing this to other customers!

Anyway, once online bill pay became common place (and free) I started to pay everything that way and I have looked back. I haven't paid a bill late in about 10 years.

I understand layoffs, I understand sudden trama taking place in a life that distracts you from your bills. Life happens! But I don't understand just forgetting to pay something for no real reason. Everyone works diferently, my system may not work for you, or your system may not work for me. But just get some sort of process in place, and these types of things won't happen. And when life's tramas DO occur, it can even help you out then too. If you have everything automated and have a system in place then you're less likely forget something, even if you're totally distracted by a crisis.

 

[arminnie]

I make my electronic payments the day the bill arrives and then check my account a day or two later to see that it not only posted but cleared.

Most banks (and believe me I've dealt with most of them) will now allow your bill payment to be scheduled automatically either for the minimum balance, the statement balance or a specified amount.

That's the best way. It is now in their hands to make the payment on time. It also gives you an extra day or so of float. You don't have to worry whether a snail mail payment or an electronic payment was received. You received a confirmation from the bank that they will request payment on the statement date (or other as specified by you).

The question I had for the credit boards, by the way, was what happens if an old, old account that still shows on my report…one that I have no access to because I have not received paperwork on it for 5-7 years for instance, what if this account suddenly imposes an annual fee? How will I find out? .... Does anyone on the DIS have any experience with this?

Yes - I do. You will be sent a bill. If it gets sent back (because you've moved) they should just close it. Why would a cc want to leave open an account when they find out they don't have a billing address?

If you get a bill you just call up customer service (get the number from the bill) and request for the card to be closed. I've done this several times. Because of working for Visa I've had at any one time maybe 20-30 cards (yes - really). I've never used more than 2-3 of them.

I've never been hit with any fees. Yes I have made mistakes (scheduled an online payment for the wrong month), but when I called they took the fee off without my even asking.

I got the Chase statement of terms this week and decided to read it to see if I did get the rate increase everyone is talking about. I don't care what the rate is because I never pay a penny of interest. It was not changed.

I think people obsess over their credit scores. Paying your bills on time really overrides most other stuff. On principle I will not pay a bill that is unfair - some medical and a cc once (we argued over $400 for months). I don't care if my score slips 10 points because I cancelled 10 cards (which I really did earlier this year). It's still high enough.