Horror of Another Kind: Credit Card Fiascoes: How other people's mistakes can save YOU money!Apr 03 '00 (Updated May 02 '00) Write an essay on this topic.Having been employed by 2 of the largest credit card issuers in the world for the past 9 years, I have seen and heard more than my fair share of credit card horror stories. Luckily, I am not the victim of these tales, but we can all learn something from them. • Horror #1 - The Joint Account Imagine, if you will... the wife is on a girls only vacation in the midst of a Caribbean cruise and calls in questioning a charge that has been declined in the Bahamas. Unfortunately, the account is maxed out. "Over the limit!?" she asks incredulously "but how can that be, it is impossible!" She then asks for a recitation of all the charges, for surely there must be a mistake of some kind, or even fraud going on here. The charges consist of flowers, jewelry stores, motels, hotels, restaurants, and Victoria's Secret. She was neither the recipient nor the purchaser. Guess who was? Hubby doesn't live here anymore, that's who. Moral: Both parties have equal access and responsibilities on a Joint Account. Before you partner your financial future with someone, make sure that they are trustworthy. And, if you plan to have an affair, don't use your joint cards! • Horror #2 - 1-900-Your-Kid-and-All-His-Friends-Got-Your-Account-Number Imagine your shock when you open your credit card statement and see $3,952 worth of charges from services with names like "Dial-A-Whore", "Cheerleaders for You", "Wet 'N' Wild" etc. Now try explaining it to your wife. Moral: It's 10:00pm, do you know where your cards are? • Horror #3 - It Expired WHEN? You're sitting pretty with your 1.9% promo rate. The stock market is booming and you want in on the action. Wow, here's $10,000 at 1.9% just waiting to be parlayed into a veritable fortune! No guts, no glory, so you take the plunge. And so does the market. And then your promo rate expires (they don't last forever you know). And now you're calling into customer service, practically crying, because at your normal APR you'll be on social security by the time you can pay this balance off. Moral: There are no free rides in life. Keep track of any and all promo rates you are utilizing. Make arrangements prior to their expiration. Plan your debt and use your credit wisely. • Horror #4 - I have an account with you guys? Do you have so many credit cards that you kind of lose track of them? Maybe you put the card in a drawer and never thought about it again. How about you used the card one time, and then kind of forgot about it. Maybe you moved and did not notify the creditor. Now it's 11 months later. Your balance is up to $342 on the original charge of $59 because of all the late fees and finance charges. Your account is in the final stages of collection. Your credit report is marred for the next 7 years. You're spending hours on the phone trying to work this mess out until you finally get to the bottom of it. Moral: If you don't get a statement, pursue it! Keep track of your credit card use. • Horror #5- But he said he needed my number to verify my winning status! Oh happy day! You have won a fabulous vacation for 2 to Hawaii. I'm so jealous! You're so lucky! In order to have the travel package sent to you, by courier of course, you just need to provide your credit card number and expiration date for security authentication. The travel company needs to be sure you are an upstanding citizen. Of course you have a credit card, don't you.... because if not, well, you may not be eligible for this package. Wow! No problemo! You make arrangements to take some vaca time from work and you're all ready to fly out to that tropical sunshine. Suddenly, your credit card statement comes in the mail and lo and behold, there is a charge on it for $1,500! HUH?!?! But, but... Moral: NEVER give our your credit card number unless you plan to make a charge! (The expiration date is used on phone purchases to prove that the person making the charge has the card in their possession. It is the only place the expiration date will ever appear) Additional Moral: If it sounds too good to be true, it usually is. • Horror #6 - Cash! Hey, this is way cool. The credit card company gave you a PIN number so you can use your credit card to get cash! Just like a MAC card! This is great and so convenient, and the ATM machine is not charging a fee! Wow! Uh huh. And then you get your statement. The cash transaction fees are a minimum of $10 or 3% of the total, whichever is greater. The finance charges on cash are 21.99% from the date of the withdrawal. You know all those $10 stops at the ATM? They just cost you $21 each. Pretty great deal, huh? Moral: Read your cardholder terms of agreement! Know your rates and fees! • Horror #7 - A Day Late and a Dollar Short Some people have no luck. Pity the poor gentlemen who was attempting to make his minimum payment. He sent in his payment, for what he thought was the minimum amount due... but he made an error and was $1.00 short. Well, in the eyes of a credit card company, if the minimum payment is not met on or before the due date, the payment is late. So, accrued finance charges were assessed to the account, along with a late fee, and a past due amount owed. Along comes next month's bill. Well, this cardholder figures we must have received the payment after we generated his statement, so he pays the new minimum due and ignores the past due amount. Guess what? Since we did not receive the actual minimum due (which included the past due amount) on or before the due date, more finance charges were assessed, along with another late fee, and now the account is reporting to the credit bureau. Well, you get the picture. By the time I spoke to this gentlemen and worked out a solution, he had amassed three late fees, finance charges on the fees, and late payment marks on his credit reports. You'll be pleased to note that I fixed up his account and removed all the late fees. :) Moral: Pay attention to the amount of the payment. Even if you pay on time, but are $.01 short, your payment will officially be "late". Additional Moral: If something on your credit card bill does not look right, call or write to the company! Preserve your rights under law by communicating. • Horror #8 - But I could have had a HOUSE! This has one has probably happened to all of us who have credit cards to varying degrees. We get plastic happy. It's not like real money. We pay minimum payments swearing to pay more next month and clear up the debt. We get more cards and use them too. We may even pay off one card using access checks from another card. We're juggling accounts and paying minimums just to stave the creditors from our door. How did it happen? How did we get into this mess? It finally gets to the point where we can't even make the minimums anymore. We end up missing payments, or paying late. Our APR goes up and we have late fees assessed to our account. The finance charges and late fees are putting us overlimit and we have more fees for that. Now we're really in trouble... big trouble. Pity the poor man I spoke with several years ago who was in this very predicament. He was in debt for $125,000 give or take a few thousand on credit cards alone. What did he have to show for it? Nothing he could remember. Nothing worth the trouble he was in now. But I'll always remember when he told me that he could have had a house. Moral: Don't bite off more than you can chew. Face the facts, if you're losing control and getting into trouble STOP and TAKE ACTION Credit cards are real money, and they will affect your credit in very real ways. Think before you charge. Evaluate your financial position each month when you get your statements. Don't get in over your head, but if you do, it's better to lose your shirt now than give up your house later. Resources Here are two nonprofit agencies that can help you if you're having your own horror story: • Consumer Credit Counseling Service (CCCS) 1.800.388.2227 • Debt Counselors of America (DCA). www.dca.org. Here are some other reviews on this topic that may interest you: • Ways to Control Credit Card Debt http://creditexpert.epinions.com/finc-review-51A6-16FE24F0-388A25C5-prod3 • What You Should Know About Your Credit Reports http://creditexpert.epinions.com/finc-review-48BA-E0702A-3887950A-bd1 • How to Avoid Credit Card Fees http://creditexpert.epinions.com/finc-review-7D30-14D8F7F-3894936A-prod2  |
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