Last spring, all the major credit card companies sent out significant numbers of opt out notices.  And the notices looked an awful lot like junk mail.  In fact, a shocking number of people wrote into Smart Balance Transfers to tell us how their interest rates were doubled, tripled, and in some cases, quadrupled.  Reports from visitors trickled off during the past few months, and I had hoped the rate increases tied to junk mail looking opt out notices had ended.  Unfortunately, it hasn’t. Continue Reading »

Despite good intentions, the Credit Card Act fails to help consumers in some areas where help is most needed, particularly in respect to monthly minimum payments.  During the past seven months, many have written into Smart Balance Transfers to share horror stories of monthly payments doubling, sometimes tripling, from manageable amounts to mortgage size payments in the high hundreds and low thousands.  The vast majority of monthly payment increase recipients had done absolutely nothing wrong-except take advantage of good deals.

And therein lies the problem.  During the days of loose credit before the crisis, credit card companies frequently offered fixed for life interest rates on balance transfers in the very low single digits, often between 3.9%-7.9%, with many on the lower side.  Continue Reading »

When a credit card company offers you an interest rate opt out, it is often better to opt out then endure the new rates, especially if you have a large balance.  Consumers with smaller balances that can be paid off may benefit from keeping the card open and paying it full each month as a means to keep their credit score from being damaged.  However, if you have a substantial balance, by all means opt out of rate increases.

During the past year, I’ve heard from hundreds of consumers who weren’t sure what to do.  However, a comment posted today reminded me just how important it is to opt out of rate increases if you carry a balance that you cannot quickly repay.  Here is a horror story posted by Gale:

“I have a Bank of America card. I have payed my payments on time and have never gone over my limit. My apr was 7.9% for years. They just recently they decided to raise my apr to 23.9% it has doubled my payments. Continue Reading »

Starting Thursday August 20th, credit card companies will be required to provide 45 days notice before raising interest rates.  In anticipation of this new law, many credit card companies took the opportunity to push through last minute interest rate increases over the past few weeks.  Thus, for many of us, the new law is too little, too late.  And, unfortunately, the new 45 day notification period before an interest rate increase may not be all that helpful either.

First off, many will be hard pressed to raise the cash necessary to pay their credit card bills in full before the interest rate increases take effect.  And, while having 45 days to find a new credit card with a lower rate to use for balance transfers can be helpful, credit card companies are making it quite difficult for consumers to secure 0% rates lasting longer than 6 months. Continue Reading »

Unfortunately, this is not the first time I’ve written about the growing distaste for balance transfer among credit card companies.  However, each new story on this subject highlights the new and ever changing ways in which credit card companies are doing everything but eliminating the word balance transfer from the English language.

The first stage of the end of balance transfers began with the elimination of no fee balance transfers and the substantial increases in balance transfer fees.  A year ago, the average fee was 3% up to a maximum of $75.  Today, many companies are charging as much as 5% and there are no maximum fees.  This has, for example, increased the cost of doing a $10,000 balance transfer with some credit card companies from $75 to $500!  That’s about a 700% balance transfer fee increase.

Now, even with higher fees, balance transfers still offer consumers substantial saving options, especially when 0% interest rates lasted one full year.  Unfortunately, most credit card companies have eliminated 0% rates lasting more than 6 months.

Despite increased fees and shortened 0% rate periods, balance transfers are still a great deal for many consumers.  Sure, there where hundreds of extra dollars to be saved by getting a card with a 0% APR for a full year.  But for many customers whose rates have been raised to the high teens and mid to high twenties, transferring balances still provides many benefits, particularly lower long term interest rates. Continue Reading »

During the past week, a number of visitors have written in about yet another round of credit limit decreases and complete credit line closures.  The culprit, as always, appears to be Chase.  Here are a few examples posted that illustrate the continuing abuse of solid customers who are getting slapped with credit limit cuts that lead to costly late fees.  The first is from Gary:

“I just returned from a 2 week vacation and during my travels CHASE reduced my credit limit $2,300.00. I charged my entire vacation on the card with the intent of paying the full amount back on my return. When I got home I found that my card was maxed out and there were still pending charges. I went straight to the bank to pay down the card by $1000.00 so that there would be no over-limit fees, only to be told that my deposit would be held for several days and then my card payment would take a minimum of 5 business days to be applied to the card. So, while the gas and motel charges continue to pile up (over my NEW card limit), I am unable to make a payment. I called CHASE to see if there was some way to work around the problem and the customer service person on the phone told me that “I was one of the lucky ones to even have a credit line available.” apparently they just flat our closed a lot of credit card accounts on people. I was also told that it was my responsibility to check my balance before EVERY transaction to see if they have lowered my available credit… Continue Reading »

A few months ago, there were no new credit card laws, no massive interest rate increases and literally hundreds of 0% balance transfer credit card offers with low fees.  Today, credit card companies are struggling with the impending implementation of new credit card regulations and massive unemployment.  Their response:  raise interest rates on credit-worthy consumers and put an end to money saving balance transfer deals.

Back in March, just about every major credit card company offered 0% balance transfers lasting one year and charged a maximum balance transfer fee of 3%.  Today, most balance transfer offers only last 6 months, and some include hefty 5% balance transfer fees. Continue Reading »