The truth about low-interest credit cards
We've all received the offers in the mail: "Zero percent interest until July of 2008!" If it sounds too good to be true, it usually is. Credit card companies do offer low rates if you switch your balances over to them. Once you get the new card, the company sends you an explanation of their policies that is usually written in such small print you need a magnifying glass to read it. If you decipher this tiny script, you discover that your 0% interest rate will convert to 14.99% or higher if you are late on a payment by even one day!
The next trick up the credit card companies sleeve is to send you statement that arrives a couple of days before your due date. If you are fortunate, you may be able to go on line to pay the account before it goes past due, but the companies usually require a day or two to process the payment, so you still might end up being late and incurring the higher interest rate on your next bill. When a company failed to send me a statement one month and then tried to raise my 0% card to 18%, I called and complained until I had a manager on the phone and the 0% rate was reinstated.
When I was a teenager, a father of one of my friends worked at a bank. I put on my best clothes, walked into his bank and asked him if he would approve me for a credit card, even though I had no credit history. He approved it, and I was careful to keep the card current, because I didn't want to let my friends father down.
Fast forward a few years, and it appears that the credit card companies aren't interested in people who pay their bills on time. If they were, they wouldn't lure people in with low interest rates only to pull the rug out from under them when they make the slightest mistake. Companies like Chase and Citibank are making more money than ever, but their greed is insatiable, and they are willing to go to any lengths to satisfy it.
If you have been on the wrong end of one of these credit card company bait and switch tactics, here are some steps you can take:
1- On the website for the card, you can usually setup an automatic payment. Set one up for the minimum due on the card so you at least pay this every month. You can make a second payment every month to reduce your balance if you want.
2- If your rate is raised because of being a day or two late on your payment, call the help desk and insist that you speak with a manager. Tell them you are prepared to close your account if you are not helped.
3- If step 2 doesn't work, file an on-line complaint with the Better Business Bureau. These companies pay attention to BBB complaints, and they have customer service people assigned to complaint resolution. Tell the person who calls that you want your rate restored to 0%.
4- The best advice I can give you (and I am following it myself) is to pay off your credit cards and use cash.
The next trick up the credit card companies sleeve is to send you statement that arrives a couple of days before your due date. If you are fortunate, you may be able to go on line to pay the account before it goes past due, but the companies usually require a day or two to process the payment, so you still might end up being late and incurring the higher interest rate on your next bill. When a company failed to send me a statement one month and then tried to raise my 0% card to 18%, I called and complained until I had a manager on the phone and the 0% rate was reinstated.
When I was a teenager, a father of one of my friends worked at a bank. I put on my best clothes, walked into his bank and asked him if he would approve me for a credit card, even though I had no credit history. He approved it, and I was careful to keep the card current, because I didn't want to let my friends father down.
Fast forward a few years, and it appears that the credit card companies aren't interested in people who pay their bills on time. If they were, they wouldn't lure people in with low interest rates only to pull the rug out from under them when they make the slightest mistake. Companies like Chase and Citibank are making more money than ever, but their greed is insatiable, and they are willing to go to any lengths to satisfy it.
If you have been on the wrong end of one of these credit card company bait and switch tactics, here are some steps you can take:
1- On the website for the card, you can usually setup an automatic payment. Set one up for the minimum due on the card so you at least pay this every month. You can make a second payment every month to reduce your balance if you want.
2- If your rate is raised because of being a day or two late on your payment, call the help desk and insist that you speak with a manager. Tell them you are prepared to close your account if you are not helped.
3- If step 2 doesn't work, file an on-line complaint with the Better Business Bureau. These companies pay attention to BBB complaints, and they have customer service people assigned to complaint resolution. Tell the person who calls that you want your rate restored to 0%.
4- The best advice I can give you (and I am following it myself) is to pay off your credit cards and use cash.
