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Pay $1 For Your Credit Card Statement

Private-label credit cards for stores such as Ann Taylor and Victoria's Secret are now implementing a $1 fee if you want your credit card statement mailed to your home as of February 22nd. In order to avoid the fee, lenders want card holders to opt in for online credit card statements.

Lenders claim the new Credit CARD Act of 2009 require a number of new disclosures be included in each card statement and the extra paper is going to cost them. Watch dog groups warn that lenders will keep trying to come up with new and exciting ways to add additional fees to your bill in order to recoup some of the money the new act is causing them to lose. 

The purpose of the Credit CARD Act of 2009 is to make lending practices more transparent. Retroactive interest rate hikes and other hidden fees are a thing of the past. Lenders are expected to lose as much as $50 Billion in revenue due to the loss of their old bill padding strategies.

Offline Credit Card Statement Fees Will Hurt The Elderly The Most

Since the fees apply only if you want a physical statement in the mail its expected that the elderly who have not fully embraced all our current technology will be hit the hardest. 

Lender Fees Exposed

So remember the CARD Act that was supposed to help protect consumers from unscrupulous lenders and all their hidden credit card fees? It seems some lenders have already found new ways to whack us over the head with additional fees. Take a look at some of their new methods for collecting more than what you had bargained for...

Interest Rate Games

1. The CARD Act stipulates that fixed rate credit cards can't become variable cards as long as they are paid on time, but if you have a variable rate card you're in for a ride. In the past, variable rate cards were tied to the prime rate. Lenders are now adding a clause that they can use the highest prime rate in the past 90 days. That's an estimated $720M in new revenue for them, right out of consumer pockets.
   
2. A second new strategy targeting those with variable interest rate cards are the new "floor" interest rates. If your card has a "floor" rate of 6% and the prime dips below 4% for 4 months, you won't benefit from the 4% prime rate as your floor rate is 6%.

Fee Games

1. Lenders are now implementing a higher minimum finance charge. That means if you only incurred an interest charge of $4 in any given month, but their minimum finance charge is $20, then you'll have to fork over another $16.
2. You know how you used to get hit with a $25-$45 late fee when you paid late?  Those late fees are now increasing in size in proportion to your credit balance.
   
3. Think you'll avoid these charges by not using your card? Think again. Lenders are now implementing an inactivity charge. Fees vary by lender.
4. If you travel to foreign countries you are familiar with foreign transaction charges you would incur anytime you exchanged currencies. Now you may incur these charges even if no currency is exchanged provided a foreign bank is involved.
   
5. And lastly, they've removed the caps on balance transfer fees and increased the minimum charge. That means they can charge you for an entire year of interest upfront on that 0% balance transfer.

The lesson here is that lenders are rewarding those with good credit and payment history, but miss just one payment and you're in for a world of hurt. You'll be hit with a veritable tidal waive of fees that will make you wish you never applied for a credit card in the first place.

My advice? Keep just 1-2 cards with minimal balances and pay them in full each month with an automated payment plan.

How the New Credit Card Bill Effects You

This past Tuesday  the Senate voted overwhelmingly in favor of a bill that restricts unfair credit card practices. The Credit Card Accountability, Responsibility and Disclosure Act passed by a 90-5 margin. The bill comes on the heels of similar legislation, known as the Credit Cardholders Bill of Rights, that was approved by the House on April 30th.

Here's a quick summary of how these bills effect you:

Teaser Rates - You know that old bait and switch tactic lenders use to get you to apply for their credit card? the one where you get an introductory rate of 0% and then 2 months later they increase the rate, now that you have a balance. Well, both bills require the lender to lock in your teaser rate for at least 6 months.

Advance notification: In the past your issuer could increase your credit card’s interest rate with only 15 days notice. Now both bills require that lenders give you 45 days notice before making significant interest rate, fee and finance charge hikes.

Retroactive rate hikes: Both bills ban hikes to interest rates on existing balances. If the rate on your credit card changes, the new rate will apply only to new purchases. However, the bill only applies if you make timely payments. If you fail to comply with a debt repayment workout plan or if you are more than 30 days (House bill) or 60 days (Senate bill) late on payments, they can hike the rate on all your balances. Furthermore, both bills prevent issuers from raising your interest rate during the first year of the card account.

Payment allocation: Before this legislation, banks could apply your payment to the balance with the lowest interest rate first, leaving your more costly balances accruing higher interest for the lender. Now, payments in excess of the minimum amount owed must first be applied to the balance with the highest interest rate first, and then to remaining balances in descending order.

Universal default: Both bills eliminate this practice that allows a lender to raise your rates if it learns that you were late on another card or loan.

Account closings: The House bill requires an lender to give you 30 days notice before they close your account.

Due dates: Credit card statements must be mailed 21 days before the bill is due, up from 14 days notice. Payments received by 5 p.m. on the due date are on time. Payments with due dates that fall on holidays or weekends must be accepted by the next business day.

Over-the-limit fees: Before, if you charged above your credit limit, the lender would approve the transaction and charge you with an “over-the-limit” fee. Consumers must opt in for over-the-limit approval—and the associated fees.

Penalty periods: If you are late your rate will go up. However, the Senate bill states that if you pay your bill on time for 6 months in a row, you can reclaim your lower rate.

Gift cards: The Senate bill states that gift cards can’t expire for at least five years.

Many of these provisions are scheduled to take effect July 2010.

Why You Should Pay With Your Credit Card

I got this angry email the other day from a client who canceled her credit repair order.

SEND ME MY REFUND. I HAVE SENT THE MATTER TO THE BANK FRAUD DEPT. YOU CHARGED ME $199. I REQUESTED A REFUND IN 5 DAYS AND YOU HAVE NOT RESPONDED AT ALL. (Highlighting, capitalization, and italics are hers)

This client had canceled over a month ago. She was reviewing her bank statement and couldn't find the refund, so she assumed we had scammed her.

Look...

I understand that people are skeptical about credit repair services. The FTC is in the process of suing another 7 credit repair companies for fraud, so it's reasonable to assume that more credit repair services are also scams.  I can't blame you for being cautious. In fact, I encourage it. Let me help you by showing you how you can easily protect yourself from con artists and scammers, no matter what you purchase.

American Express, VISA, Mastercard, etc, all come with their own protection plans. If you ever see a charge on your statement that you disagree with or you didn't authorize, just call your merchant and dispute the charge. 

If the person/company who charged your card can't prove they were authorized and/or can't prove they delivered the goods or services you purchased, then you'll get your money back 100% of the time.

On a side note, it's easier to dispute a regular credit card charge than to dispute a charge on your debit card, but using a debit card is still better than paying by cash or check which provides NO protection whatsoever.

I recommend all my clients pay with their credit cards.

It protects us both.  I'm NOT saying to buy things on credit you don't already have the cash to pay in full.  I am saying to pay with credit cards for your protection, then pay off the balance when you get your statement.

Now back to my client. Let me clarify the situation. After reconsidering her budget, she realized she couldn't afford credit repair at this point in time and decided to cancel. We had refunded her set up fee the same day we received her request and we even emailed her the receipt. It was in her spam folder, so she didn't see it.

I firmly believe there's more than enough money in the world that anyone can be successful without stealing. I don't share the world's current scarcity mentality. Money doesn't vanish. It simply changes hands. People just don't know where to look for it anymore.  Ask anyone who trades gold or oil. They'll tell you business is booming.

Case in point...

Years ago people got crushed in the stock market and the world had similar fears. It turns out money went from the stock market to the real estate market. I should know. I was a big shot stock broker prior to 9/11. I had front row seats on the stock market roller coaster.

I left that world because it left a big empty space inside me. I wanted my career to be meaningful and rewarding both spiritually and financially. Selling stocks to rich guys, for a sort of telephone Las Vegas gambling rush, didn't fit that job description. I'm not that guy.

This is who I am...

I'd like to share this quote with you. I found it shortly after 9/11 and it changed my life. It gave me the courage to aim high, to live my life and run my business by my rules and by my higher standards. 

Once you've read it you'll know how sincere I am when I tell you I will not take a dime from you unless I am confident I can help you and I will do everything I can to deliver 1000% greater value in return. I will never knowingly mislead you or break the law. I will remain open to your suggestions on how to improve my service.

It's my goal, in business and in life, that your life be better for having met me.