[Fredslist] An alert to credit card users

Wed Mar 25 14:54:39 EDT 2009

David thanks for sharing this info.  It makes me more aware.  Along those lines I will share a recent experience of a client so we can all be more aware.  He got dupped by one of those "free" samples, just give your credit card for shipping charges.  He started getting regular shipments of the item.  He called and got what seemed to be reasonable responses but when the next credit card bill came there was the bill again.  He ended allowing this to happen for several months before he finally called the credit card company who issued a new card and he started trying to repair the damage.

The result of this seemingly minor error is that his credit score dropped over 75 points, he is no longer eligible for the loan for his company that he was eligible for (I am trying to rectify the situation) American Express dropped his card limit from $20,000 to $500 etc.

Please be aware that the credit card companies are in overdrive in acting defensively or offensively.  There are many rumors and many things that are true.  Ex American Express will drop you and or lower the line if they check your credit and see you start shopping at WalMart if that is not the calibur of store you used before.  Fact for sure is that the credit companies are checking your credit much more FREQUENTLy looking for "tell tale" signs of trouble.  Any late payment or higher balance on any credit card brings their watchfull eye and often some action.

My client was too lax about the 2 situations that happened to him.  In the one I described, he should have called his credit card company immediately and complained of a fraudulent charge.  He didn't pay it as the company billing him said they would credit him and instead kept charging.  His credit card company just marked him late each month he did not pay as they do not know of the circumstances.  At any sign of a question, call your credit card company to explain the problem.  This can help you avoid the sequence of bad events possible that will effect your credit standing.  

His second mistake was that when he cancelled his Verizon wireless acct they charged him some ungodly amount.  He thought his one year contract was over and he was right and Verizon should prove they were right that the contract about the contact not being expired.  That was ok in the OLD days.  Now you need to handle it immediately no matter how right you are and how wrong they are.  He now has a collection account against him within a couple months and this too has affected his score.

The credit card companies can destroy you these days.  Be Proactive.  Don't let anything slip by.  Make sure to get your free credit report you are entitled to once a year at www.annualcreditreport.com.  You can get a copy of your credit report without losing any points for an inquiry at this site.  

Sherry Rivera 

Guardian National Funding

100 North Village Avenue

Rockville Centre, NY 11570

516 594-1400

From: davidlaw at optonline.net
To: fredslist at gothamnetworking.com
Date: Wed, 25 Mar 2009 11:51:30 -0400
Subject: [Fredslist] An alert to credit card users

Gotham Colleagues: 

I want to alert you to a very strange (indeed counterintuitive) business policy of at least one credit card company.  

As I was paying my credit card bill yesterday, I noticed a little “finance charge” on my credit card statement for the period ending 3/9.  I saw that they’d posted my previous month’s payment as of 2/20, well before the due date, so I was puzzled, and rather than ignore it (which was my first impulse), I called customer service to ask why I’d incurred the finance charge. 

The phone rep confirmed that I’ve had my CitiCard for over 25 years, and have an excellent payment history, paying the full balance on time every month, up till this January, when my payment was “late.”  I asked by how much it was late and she said by one day, which caused the balance to “revolve,” and me to incur a late fee (which I hadn’t noticed on my Feb. statement) and the finance charge on my March statement (the one I paid yesterday).  She cheerily volunteered the following info: Citi Cards had shortened my statement cycle (the period from when they print my bill through the due date for payment), because I was such a good customer.  Baffled, I asked her to explain this, as it was counterintuitive to me.        

She “explained” that this benefits me because it allows me to use my card more effectively.  I disagreed, and asked her what she meant by that and she couldn’t explain it any more specifically.  I told her that the only way it could benefit someone was if they were to use their entire credit line each month (and I don’t put $20K per month on this card – far from it), as faster payment would free up the line sooner.  However, for the vast majority of us who don’t use our entire line each month, this policy actually was punitive, because shortening my statement cycle to substantially less than the 25 days I’d had previously requires me to pay the bill pretty much as soon as it arrives (artificially making it a priority) and renders me more susceptible to inadvertently missing the payment deadline by a day or so if the mail is slow.  

So, I clarified with her that the reason for this whole scenario of late fee and finance charge was imposed on me because I’m a good customer who always pays his bill on time and in full, so they shortened my statement cycle, rendering me susceptible to extra charges if my check – mailed a week in advance of the due date (I don’t bank online yet, for a # of reasons) – arrives a day late due to US Postal Service delays.  She agreed with my summary.  I told her that I needed to have my 25-day statement cycle restored or I’d be an ex-Citi Card customer immediately.  

To her credit, she apologized, went to check on it, and said that she could remove the charges and restore my 25-day statement cycle.  I also asked her to submit a customer complaint about the policy, in hopes that others wouldn’t be subjected to this wrongheaded practice (wish me luck!!).  

The moral of the story is: If you’re a good credit card customer, check your statement cycle, and if it’s not close to 25 days or thereabouts, call to ask that the longest possible cycle be restored to your account, to decrease the possibility of incurring a late fee or financing charge.  In these times, every cost saving helps.  

Best regards, 

David 

David J. Abeshouse  
Law Office of David Abeshouse  
50 Charles Lindbergh Blvd., Suite 400  
Uniondale, New York  11553  
Ph: 516-229-2360   Fax: 516-229-2361  
Alternative Dispute Resolution  
Arbitrator/Mediator  
David at BizLawNY.com  
http://www.BizLawNY.com  

See my LinkedIn profile:   
http://tinyurl.com/455eqj  
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http://tinyurl.com/4u34gg  

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