You say you pay off your credit card balance every month? Now the companies want to charge you for NOT running up a balance!
http://www.usatoday.com/money/perfi/columnist/block/2009-10-19-bank-of-america-card-fee_N.htm (http://www.usatoday.com/money/perfi/columnist/block/2009-10-19-bank-of-america-card-fee_N.htm)
"Citigroup, meanwhile, has started charging annual fees to card holders who don't put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don't use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt."
Well that'd be a deciding factor on closing accounts.
QuoteThe bank has characterized the fee as experimental.
They can pucker up and kiss my experiment.
Sure do love my fee-free debit card.
Keep in mind that closing accounts could have a negative impact on your credit rating. One of the factors, a material one it seems, in calculating your credit score is the percentage of available credit used. As you close accounts the amount of available credit declines which may make your percentage of available credit used go up. I am not saying this is the right way to look at it just that it is the way the major credit scoring companies do look at it.
If you are not anticipating the need for credit, to buy a car or house for example, it may not matter but it could be that doing what seems prudent might cost you as well.
And since insurance company actuaries see fit to extrapolate your credit file into your risks for auto accidents that could be another way that it costs you in higher auto premiums, then. I personally think it's total BS.
Quote from: Conan71 on October 20, 2009, 03:50:13 PM
Sure do love my fee-free debit card.
Yes, but this week's Business Week sez those daze are numbered too.
Hate to burst your bubble... :-*
Quote from: FOTD on October 20, 2009, 04:22:10 PM
Yes, but this week's Business Week sez those daze are numbered too.
Hate to burst your bubble... :-*
I'm sure the daze of free checking are numbered too. I don't write hot checks which means my primary bank isn't profiting heavily off me.
In general "non-interest income" is very important to banks. The recent changes announced concerning overdraft fees, which were egregious, means that banks will look for other areas to replace this lost income (for the indusry overall the amount is in the billions per year). With interest rates so low the fact that you will accept no interest on your "free" checking account means they are not as profitable as they were when rates were higher. I would agree that additional fees are coming.
Additionally, the move afoot to more tightly regulate the financial industry will result in consumers paying fees for many services they used to receive for "free".
Quote from: bokworker on October 20, 2009, 04:01:00 PM
Keep in mind that closing accounts could have a negative impact on your credit rating.
How much open credit does a person really need though?
How many open unused lines of credit should a person maintain?
First of all, there is no worse bank then Bank of America. They are very well known for the amount of their excessive fees. I mistakenly had an IRA that, through several bank sales/purchases, ended up at Bank of America. They fee'd me to death. I finally transferred my IRA someplace else, which of course, was another fee. A letter sent to Bank of America went unanswered. All their crazy fees wiped out much of the earnings my IRA made.
Even Clark Howard says Bank of America is the absolute worst.
www.bankofamericasucks.com is always a great site to visit.
Quote from: Townsend on October 20, 2009, 04:58:53 PM
How much open credit does a person really need though?
How many open unused lines of credit should a person maintain?
I don't think there is a black and white answer to these questions. I have had credit specialists within my organization try to explain the scoring process to me. Now I will admit I am not the sharpest knife in the drawer but I knew less after talking to them than before. It is also true that at some point too much available credit starts to become a negative.
Making sure you responsibly handle credit over time is the best way to assure a good credit score. And as Conan mentioned, your credit score can impact many parts of your finances that are not directly tied to the repayment of debt.
Quote from: Wilbur on October 20, 2009, 05:06:39 PM
First of all, there is no worse bank then Bank of America. They are very well known for the amount of their excessive fees. I mistakenly had an IRA that, through several bank sales/purchases, ended up at Bank of America. They fee'd me to death. I finally transferred my IRA someplace else, which of course, was another fee. A letter sent to Bank of America went unanswered. All their crazy fees wiped out much of the earnings my IRA made.
Even Clark Howard says Bank of America is the absolute worst.
www.bankofamericasucks.com is always a great site to visit.
BOA got me when they charged a fee for cashing their own checks.
Quote from: custosnox on October 20, 2009, 05:10:21 PM
BOA got me when they charged a fee for cashing their own checks.
You must have been a "non account holder" and they needed to compensate for the risk the check would not clear.....
/sarcasm off
Quote from: bokworker on October 20, 2009, 04:55:44 PM
In general "non-interest income" is very important to banks. The recent changes announced concerning overdraft fees, which were egregious, means that banks will look for other areas to replace this lost income (for the indusry overall the amount is in the billions per year). With interest rates so low the fact that you will accept no interest on your "free" checking account means they are not as profitable as they were when rates were higher. I would agree that additional fees are coming.
Additionally, the move afoot to more tightly regulate the financial industry will result in consumers paying fees for many services they used to receive for "free".
Maybe if banks had fewer but better staffed locations there costs would go down, less real estate to pay for, over all less employees, all equaling a higher return per customer without having to increase fees. Another benefit most consumers would see with fewer locations is faster better service, because with fewer locations to staff they could be staffed with not only more employees but also with higher quality employees (when you decrees the over all amount of available positions, have less management spread around you can find better prospects.)
Never going to happen but if it did it would all save us money and we could potentially get better service, but who wants that.
Quote from: bokworker on October 20, 2009, 05:08:29 PM
...but I knew less after talking to them than before.
Kinda like talking to a doctor or attorney, eh? ;)
Please explain to me why do most older people have credit cards they have never used.
I have talked with customers who say they havent even activated the card yet ???
The worse card experience I have had was the Sears card.
Sure, pay that low balance due and high interest rate and that 1.200 dollar T.V. will be 2.300 in a year and a half.
American Express. Sir we are a charge card not a credit card, and your balance is due every 30 days.
Try explaining that to a 21 year old who keeps getting the old, hey your pre approved for 5.000 dollar credit line.
It took me some time to get back what my youthful ignorance cost me.
Quote from: DolfanBob on October 21, 2009, 09:23:18 AM
that 1.200 dollar T.V. will be 2.300 in a year and a half.
1.200 = $1,200 ?
Quote from: DolfanBob on October 21, 2009, 09:23:18 AM
Please explain to me why do most older people have credit cards they have never used.
I have talked with customers who say they havent even activated the card yet ???
The worse card experience I have had was the Sears card.
Sure, pay that low balance due and high interest rate and that 1.200 dollar T.V. will be 2.300 in a year and a half.
American Express. Sir we are a charge card not a credit card, and your balance is due every 30 days.
Try explaining that to a 21 year old who keeps getting the old, hey your pre approved for 5.000 dollar credit line.
It took me some time to get back what my youthful ignorance cost me.
Some people just get a credit card to keep in case of an emergency. I have a few credit cards with no balance that I keep in a drawer. If you cancel them it hurts your credit score. If you have over 50% of the balance used up that also hurts your credit score. You have to read all of the terms before you accept any credit offers. A lot of places like Best Buy offer 0% interest for 18 months or more but you can never pay late and you have to pay off the total before 18 months or else you have to pay 20+% interest from the day of purchase.
I decided to stop letting credit cards hurt me and have them help me. I find the best rewards programs and use those cards for all of my bills and purchases. I pay off the balance every month and usually get $600+ cash back in rewards each year. But if everyone did this the credit card companies would not make money and stop offering rewards.
Quote from: Red Arrow on October 21, 2009, 12:02:39 PM
1.200 = $1,200 ?
I was going on what has happened to my stepson with his Sears card that he has had not quite two years.
He bought a 12 hundred dollar TV when he first got it and now his recent balance was a cool 26 hundred.
I have no idea if he purchased other items, but i assume he has.
Me personally. I will stick to my debit card. If it aint there, it dont work.
Thanks for the answers though.
I'm interested to see what happens with CC balances with the loan for laundry deal coming out.
CC's weren't used much with the cash for clunkers but with the government giving money out to buy new washer/dryer/refrigerator, I'd imagine they will be used quite a bit.
This could be huge for the banks behind sears card, home depot, Lowes card, etc.
Quote from: OpenYourEyesTulsa on October 21, 2009, 01:02:31 PM
Some people just get a credit card to keep in case of an emergency. I have a few credit cards with no balance that I keep in a drawer. If you cancel them it hurts your credit score. If you have over 50% of the balance used up that also hurts your credit score. You have to read all of the terms before you accept any credit offers. A lot of places like Best Buy offer 0% interest for 18 months or more but you can never pay late and you have to pay off the total before 18 months or else you have to pay 20+% interest from the day of purchase.
I decided to stop letting credit cards hurt me and have them help me. I find the best rewards programs and use those cards for all of my bills and purchases. I pay off the balance every month and usually get $600+ cash back in rewards each year. But if everyone did this the credit card companies would not make money and stop offering rewards.
Well... note quite correct. Credit card companies make money off of each purchase you make from the retailer, so the cash back awards really shouldn't affect whether or not they make money.
Cash back cards are the best, and currently, AmerEx Blue is the best cash back card. It gets rated the highest each year from Money Magazine.
Quote from: DolfanBob on October 21, 2009, 02:11:33 PM
I was going on what has happened to my stepson with his Sears card that he has had not quite two years.
He bought a 12 hundred dollar TV when he first got it and now his recent balance was a cool 26 hundred.
I have no idea if he purchased other items, but i assume he has.
Me personally. I will stick to my debit card. If it aint there, it dont work.
Thanks for the answers though.
Actually, I was checking if you were using a decimal point where most people in the US use a comma. I know other countries reverse our use of commas and decimal points.
Never was very good with punctuation.
Any chance getting a spell check added on here ?
Quote from: DolfanBob on October 21, 2009, 02:11:33 PM
He bought a 12 hundred dollar TV when he first got it and now his recent balance was a cool 26 hundred.
Then he either bought some other stuff or doesn't pay his minimum payment. (The minimum is 2-5% of the balance plus whatever interest that accrued in the last billing period)
Quote from: Wilbur
Cash back cards are the best, and currently, AmerEx Blue is the best cash back card. It gets rated the highest each year from Money Magazine.
Blue is OK, but there are better cards out there. With Amex you get one MR point per dollar. 10,000 MR points can get you a $100 gift card to many locations. Many issuers (including Amex with Blue Cash) have cards that give you 1% back as a statement credit or check.
Chase and Citi have cards that give you more than 1% for certain classes of purchases. Citi used to have a wide array of them such that you could get 3% on just about any purchase if you had their whole range of rebate cards. They've slowly eliminated all but a few.
Just remember, unless you need new credit, your score isn't really important as long as your file looks OK to an analyst reviewing your credit lines/terms. Therefore, it is usually far better to opt out and close an account from an issuer who is about to ratejack a balance. Although your score will take a significant hit from both the loss of the credit line itself and the fact that you have a balance on a closed card, that's far better than paying 30% interest if the issuer refuses to relent.
I have had very good luck with Discovery Card and with my BOk debit card. No issues with Discover. The only issue I've had with BOk is some frog in Paris stole my # (bought off the web I suppose) and charge ~$900 in two days. Within a day they restored my balance provisionally and took care of the issue totally within a couple weeks (with me doing nothing but filling out a form).
Generally I don't carry a balance on my card but use the hell out of it. If it can go on the Discover card, it does. 1% back pays off when you put all groceries, season tickets, clothes, school supplies, etc. etc. etc. on it!