Most of the things I write about are ways to actively save money (what can I say, I’m an active gal). But last night I had to do something active in order not to lose money.
I got a letter full of legal mumbo-jumbo the other day from my credit card company. It had the info on a new amendment to my credit card agreement. I almost threw it in the trash, but decided to just puruse it to see what they were changing.
Well, the basics of it were that they are making a change where if you are late at all on a payment, or if your charges exceed your credit limit then they can automatically change your account to default pricing, which means they can bump your APR up without any further notice to the default rate. The default rate is up to 24.99% !!
The kicker is this-it says right on the letter that YOU CAN REFUSE THIS CHANGE! All you have to do is write a letter in to the address they give clearly stating your name, account number, and that you reject the change. And they have to receive it by 30 May. It even says right in the information “Write to us immediately or your rejection will not be effective.”
Now who in their right mind wouldn’t take the time to do this? Personally, I usually pay my credit card bill early, and although I charge everything I can for the bonuses associated with my card I have never gone over my credit limit. But still, just in case something happens one month, I don’t want to be charged 24.99% interest.
But I am sure there will be tons of folks who will follow my first impulse and just throw the letter away without really reading it, or who will mean to do it but not get around to it. And I’m sure that plenty of these folks will be the types who carry a balance on their card. . .
On a side note, I decided to be extra careful and make sure the letter was legit-after all I was going to be sending someone my full credit card number, name and address. And the letter specified that you didn’t send the info in with your payment but to a separate address. So I called my credit card company and confirmed the info (it was legit) while I had them on the phone I asked if I could have my interest rate dropped, so they dropped it to 12%, confirmed that I had those silly “convenience checks” turned off, and upped my credit limit on that card while they were at it to $23,000.
$23,000. How ridiculous is that? I could like buy a car with my credit card (not that I ever would). I guess since I alway pay off my balance they aren’t making enough interest off me and are trying to tempt me into spending more.
Great post. I’ve commented on this post on my blog – this is something which all too often, we ignore.
I did this once before and was informed that my card would then be canceled at the end of the month and that the balance, in full, would be due.
Of course, all situations are different.
RE: buying a car with your credit card
I’ve actually done this! Car dealers really give you a hard time if you try to do it because they don’t want to lose out on the financing and it is a lot of unsecured debt. And I think credit card companies balk at that idea too.
However, we did it because we had the cash to pay for the car in another account but not on hand. We found the perfect used car (I’m still loving it 7 years later) and didn’t want to miss out. We charged it and then paid the balance in full that month and also got all the cash back bonus points for the purchase.
Oh yeah, the car was less than $10K and I still think it was a perfect choice as it has only once in the past 7 years (last month in fact) cost me any repair money beyond standard maintenance (tires and breaks).
Wow, Donna Jean, think of all the frequent flyer miles you can get by buying a car on your credit card.
The only thing I would warn people about with high CC limits is that some lending agencies look at that as “potential debt” and it may affect you adversely. Not sure of the specifics, but something to think about (I never did before).
Those “convienience check” are anything but… their interest rate is always higher than your regular cc!! I hate getting them… anyone can get a hold of and use them – it is what prompted me to buy a small shredder (which I love) Probably to much OpSec ads hammered into my head 🙂
Wow, thanks for the heads up! I’m definitely going to look very carefully at any correspondence from my CCs now! Mostly I just shred it–especially those scary checks. I wish there was a law that said, “No Mumbo Jumbo! Get the point!!!”
M2F-I missed ya! Glad you’re back. You can call your credit card company and tell them to stop sending you those checks. That’s what I finally did-I was always worried that someone would grab them out of the mail or trash.
I had no idea I could block the stupid blank checks the cc’s send. I’ll do that this week. Thanks for the tip.