annual credit card fee? WTH?

ryanjoachim

Apparently most of you aren't taking into account a HUGE reason why people are stuck with a balance on their account.

They're called "emergencies". My wife and I both lost our jobs last year (during the 15% unemployment funfest in Oregon). She was pregnant at the time, and we ended up having to pay a big portion of the hospital bill on our credit card because I was only able to find temp work, and wasn't able to get insurance.

So before you (those of you who are acting like only dumbasses have balances) get all "high and mighty", try to understand that there are viable reasons to have to use more of your credit card than you can afford.

Demiurge

steveinaz wrote: »

How long do you think it will be before the days of paying off your full balance to avoid a finance charge will still be around? What sentence in the 9 page teeny-tiny print of your "new agreement" on the back of your latest statement do you think you'll find that warning/opt-out (if even an option)?

To me, credit cards aren't worth the effort.

You seem to be aloof as to the amount of laws that govern what credit card companies can and can't do. They can't hide stuff from you like the days of old. If you're missing something these days it's your fault.

To me, credit cards are a great tool to make my money go further. I respect those who don't use them. What I don't respect is the harping over companies that are operating well within the law. If credit cards get to be a hassle, I'll stop using them too.

shack

ryanjoachim wrote:

They're called "emergencies". My wife and I both lost our jobs last year (during the 15% unemployment funfest in Oregon). She was pregnant at the time, and we ended up having to pay a big portion of the hospital bill on our credit card because I was only able to find temp work, and wasn't able to get insurance.

..and most hospitals will work with patients to set up a payment plan.

tcrossma

It's all about knowing your own personal spending habits, having your own system for managing money, and making it all work. There's no one set of rules that govern what does/does not work with regards to managing debt for any given person.

I personally use my CC for all larger purchases and well as all online and over-the-phone purchases. Debit card for all of my daily local purchases. We usually have a rotating balance on the CC and pay a little bit of interest each month. But I'm not going to micromanage or lose any sleep over $10-$15 in interest a month -- it's worth it to us for the convenience it offers.

We could technically make sure there's a $0 balance each month, but we like to keep a certain amount in the saving account, another small amount in the checking, and the rest usually goes to retirement. It's all about cash management, and everyone has their own systems that work for them.

Back to the original point of this thread, it is a bit annoying when CC companies arbitrarily raise interest rates or cut limits. From what I've been reading they have been doing that recently on customers they deem risky. Credit score, payment habits, debt to limit and other factors are all considered, I'm sure.

I have a BofA card, and if they raise my rate I'll pay it off and kick them to the curb in a heartbeat. If you can't somehow pay it off then they are probably correct in raising the rate because you are, in fact, a risky customer to them.

ryanjoachim

shack wrote: »

..and most hospitals will work with patients to set up a payment plan.

That assumes I could afford what they were willing to take, with a temporary job and a wife and 2 kids to support. There are always alternatives to using credit cards, i'm well aware of that. I guess I didn't mention that I put about 1/2 of the bill on the credit card, and worked with the hospital on the rest.

I wouldn't have been able to afford what the hospital wanted for the full balance.

ryanjoachim

tcrossma wrote: »

it is a bit annoying when CC companies arbitrarily raise interest rates or cut limits. From what I've been reading they have been doing that recently on customers they deem risky. Credit score, payment habits, debt to limit and other factors are all considered, I'm sure.

What I don't like is how they raise your limit without asking you. It sounds like a stupid thing to not like, but if I WANTED my limit raised, i would have called them and asked.

Demiurge

ryanjoachim wrote: »

Apparently most of you aren't taking into account a HUGE reason why people are stuck with a balance on their account.

They're called "emergencies". My wife and I both lost our jobs last year (during the 15% unemployment funfest in Oregon). She was pregnant at the time, and we ended up having to pay a big portion of the hospital bill on our credit card because I was only able to find temp work, and wasn't able to get insurance.

So before you (those of you who are acting like only dumbasses have balances) get all "high and mighty", try to understand that there are viable reasons to have to use more of your credit card than you can afford.

To echo what PhantomOG said earlier, empathy for people going through a rough time is one thing. People who carry a balance during good times are asking for trouble when a real emergency happens.

You can't prepare for every bump in the road, but you can lesson the blow for when you hit them by having a plan. Besides, credit cards aren't the only option.

tcrossma

ryanjoachim wrote: »

Apparently most of you aren't taking into account a HUGE reason why people are stuck with a balance on their account.

They're called "emergencies". My wife and I both lost our jobs last year (during the 15% unemployment funfest in Oregon). She was pregnant at the time, and we ended up having to pay a big portion of the hospital bill on our credit card because I was only able to find temp work, and wasn't able to get insurance.

So before you (those of you who are acting like only dumbasses have balances) get all "high and mighty", try to understand that there are viable reasons to have to use more of your credit card than you can afford.

If you don't have home equity to borrow from, take an emergency loan from your retirement account, or get the money in some other fashion, then while I sympathize with yours and others' problems, you are in fact a risk to the bank.

Now, whether raising rates and cutting limits on cards is the best way for a bank to manage that risk is another argument completely. I suppose they feel they will make more money off you with the interest charges in exchange for that risk, but then again a lot more people will simply forfeit the debt.

steveinaz

ryanjoachim wrote: »

Apparently most of you aren't taking into account a HUGE reason why people are stuck with a balance on their account.

They're called "emergencies". My wife and I both lost our jobs last year (during the 15% unemployment funfest in Oregon). She was pregnant at the time, and we ended up having to pay a big portion of the hospital bill on our credit card because I was only able to find temp work, and wasn't able to get insurance.

So before you (those of you who are acting like only dumbasses have balances) get all "high and mighty", try to understand that there are viable reasons to have to use more of your credit card than you can afford.

Good luck getting any love around here. Apparently some have perfect lives, funding always available, and plan for everything; they can't conceive of, what they don't understand.

WilliamM2

Back to the original point of this thread, it is a bit annoying when CC companies arbitrarily raise interest rates or cut limits. From what I've been reading they have been doing that recently on customers they deem risky. Credit score, payment habits, debt to limit and other factors are all considered, I'm sure.

Actually, the rate increases have nothing to do with credit score. Chase has increased mine to 16.24% a couple of months ago, and are increasing it again in November to 24.24%. I've never made a late payment on anything in my life, and my credit score is 824. They are raising everyone's rates to cover bad debt.

I don't care how high they raise the rates, as I pay no interest. I keep the card because it has the best rewards. If they start charging an annual fee, I'll cancel it and stick with my Credit Union Visa. They only charge 7.99%, not that it matters.

WilliamM2

steveinaz wrote: »

Good luck getting any love around here. Apparently some have perfect lives, funding always available, and plan for everything; they can't conceive of, what they don't understand.

Well it does take a little planning. For instance, Ryan could have chosen to purchase Cobra insurance, when he lost the insurance at his job. Would have saved him a ton of money, especially with a pregnant wife.

ryanjoachim

And...what is Cobra insurance?

See, so many people have no idea that this type of option is available.

Demiurge

ryanjoachim wrote: »

And...what is Cobra insurance?

See, so many people have no idea that this type of option is available.

It's where you keep your employers healtcare plan for a period of time, but you pay the premiums. Group rates.

Demiurge

BTW -- don't rely on random folks on the internet to tell you what's what. Here's the source so you can educate yourself:

http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML

huggies

ryanjoachim wrote: »

And...what is Cobra insurance?

See, so many people have no idea that this type of option is available.

I believe its required by law for them to have sent you info regarding Cobra once you lost your benefits. Cobra is very expensive though. Kind of hard to make the payments if you dont have a job.

Demiurge

huggies wrote: »

I believe its required by law for them to have sent you info regarding Cobra once you lost your benefits. Cobra is very expensive though. Kind of hard to make the payments if you dont have a job.

COBRA is almost always cheaper than trying to get your own private health insurance at non-group rates. Yes, it's still expensive.

Here's another uncompassionate statement.... ( :rolleyes: )....it's a good idea to be prepared for a job loss so you can sustain yourself for a while when you don't have a job.

The underlying theme in this thread is personal responsibility. Knowing bad things can and do happen, what are you doing to prepare yourself for them when times are good? It often requires much sacrifice up front.

WilliamM2

huggies wrote: »

I believe its required by law for them to have sent you info regarding Cobra once you lost your benefits. Cobra is very expensive though. Kind of hard to make the payments if you dont have a job.

True, but I would rather put the insurance payments on my CC, than the hospital bill itself.

tcrossma

WilliamM2 wrote: »

Actually, the rate increases have nothing to do with credit score. Chase has increased mine to 16.24% a couple of months ago, and are increasing it again in November to 24.24%. I've never made a late payment on anything in my life, and my credit score is 824. They are raising everyone's rates to cover bad debt.

I don't care how high they raise the rates, as I pay no interest. I keep the card because it has the best rewards. If they start charging an annual fee, I'll cancel it and stick with my Credit Union Visa. They only charge 7.99%, not that it matters.

True, not all of the increases are due to credit scores. But they are apparently due to the CC companies supposed assessment of your risk. Who knows if that's really what's happening or not, they aren't giving many straight answers. But they aren't raising everyone's rate and slashing everyone's limits. They are even increasing some peoples limits and leaving rates low for some.

shack

I'm not being unsympathetic. I am speaking from years of experience on BOTH SIDES of this issue. In addition to being a banker, in the past I have spent several years as a board member of the local Consumer Credit Council. I have volunteered my time to help those who have debt problems. I know all the arguments as to why people carry balances on credit cards. In almost every situation, there are alternatives…and when there is truly not an option, the result is generally a default or bankruptcy. Granted, those alternatives are often "just say no" to using them when you can't afford to buy something.

I know lack of knowledge about CCs and credit in general is often a reason...BUT...there is lots and lots of accessible information available to anyone willing to take the time to ask and/or find out.

vc69

WilliamM2 wrote: »

True, but I would rather put the insurance payments on my CC, than the hospital bill itself.

Definitely. COBRA is hard to stomach when you lose your job, no doubt. But I second the notion that in ryan's case, would have made the most sense. Plus, hospitals will take what you give them. What else would they have done? Kept the child as collateral?

everpress

WilliamM2 wrote: »

True, but I would rather put the insurance payments on my CC, than the hospital bill itself.

I've been in the hospital 3 times while I was an unemployed student. Emergencies every time. A couple days and a couple nights stay. Surgery for what they call "spontaneous collapsed lung". Simple chest tube, physical therapy, a couple nights stay and your out.

I was given a bill each time. 3 different states. NC, AR, and OH. Each time, I was guided to an administrator and given names and numbers of people I could talk to for financial counseling. Each time I old the person giving me the info (and later on the phone with the counsellor) what my situation was.

They worked with me. The hospital will take whatever you are willing to give them. I seriously had a bill completely expunged because it was costing more for the stamp than I could afford to pay (and still pay rent and eat). The doctors are willing to work with you most of the time...

My hospital bills should have equaled out to the 30 year payment I'll have for my student loans... But I had them all paid off in maybe 3 years... Because I was truthful, honest, poor, but willing to work with those that were willing to work with me.

Now, I know I was very blessed (and yeah- I have insurance now, so I don't lean on an already over-burdened system), but as long as you make any kind of payment, a health care entity cannot turn you in to a collection agency or ruin your credit.

WilliamM2

tcrossma wrote: »

True, not all of the increases are due to credit scores. But they are apparently due to the CC companies supposed assessment of your risk. Who knows if that's really what's happening or not, they aren't giving many straight answers. But they aren't raising everyone's rate and slashing everyone's limits. They are even increasing some peoples limits and leaving rates low for some.

True, like I said, my CU card remains at 7.99%. Odd thing with Chase, is they have increased my limit twice already, while raising rates. Doesn't seem like they are basing that on risk, or they would not raise the limit.

The only other debt I have is a mortgage, and that's almost paid off as well. Sure glad we never pulled any equity out of the house when we refinanced for lower rates, we just kept the payment the same and shortened the loan.

shack

One more thing...my wife and I never carried credit card debt when we were a young married couple with a couple of kids and very little money. That was back in the day when going to McDonalds or picking up a pizza was a big night out for us (and it didn't happen often). We were very frugal. My first child was born pre-mature which ended up being very costly at a time when we had very minimal coverage and it ended up being a large and expensive bill for us. We worked with the hospital and doctors and managed to "pay for her" before the next child was born three years later. I know hard times...so again...not being unsympathetic to those with issues...just speaking from experience.

tonyb

shack wrote: »

I'm not being unsympathetic. I am speaking from years of experience on BOTH SIDES of this issue. In addition to being a banker, in the past I have spent several years as a board member of the local Consumer Credit Council. I have volunteered my time to help those who have debt problems. I know all the arguments as to why people carry balances on credit cards. In almost every situation, there are alternatives…and when there is truly not an option, the result is generally a default or bankruptcy. Granted, those alternatives are often "just say no" to using them when you can't afford to buy something.

I know lack of knowledge about CCs and credit in general is often a reason...BUT...there is lots and lots of accessible information available to anyone willing to take the time to ask and/or find out.

Agree.....but the rub is in the last part. Nobody is willing to take the time and when a CC company exercises it's legal right,suddenly it's someone elses fault. Personal responsibility.....two words the last couple generations have not comprehended. There always has to be a villian somewhere to lay your troubles at their door.

ryanjoachim

vc69 wrote: »

What else would they have done? Kept the child as collateral?

Oh, so you've been to that hospital before!

I see what you're saying though...I honestly can't say that I remember ever getting anything about Cobra, but if I had, I's like to think I would have gone for it.

They say hindsight is 20/20...apparently i'm blind in 1 eye.

everpress

shack wrote: »

One more thing...my wife and I never carried credit card debt when we were a young married couple with a couple of kids and very little money. That was back in the day when going to McDonalds or picking up a pizza was a big night out for us (and it didn't happen often). We were very frugal. My first child was born pre-mature which ended up being very costly at a time when we had very minimal coverage and it ended up being a large and expensive bill for us. We worked with the hospital and doctors and managed to "pay for her" before the next child was born three years later. I know hard times...so again...not being unsympathetic to those with issues...just speaking from experience.

No ****; I'm not joking... I went without McD's for 6 years. No TV at all for more than 3 years. Pizza? Out of a box marked 'Totino's' and only if it was a Walmart special of about 70 cents.

Things are a little better now, but not much. We still can't justify cable. Our internet is 45% work related. All my equipment is from thrift stores/yard sales, as are most of our clothes. Big purchases are always a mistake, and I feel terrible for them for sometime.

We weren't responsible fiscally. And we are paying for that ourselves, but we learned our lessons, I think.

Luckily, I'm only 30 and have work left in me for a little while.

vc69

ryanjoachim wrote: »

Oh, so you've been to that hospital before!

I see what you're saying though...I honestly can't say that I remember ever getting anything about Cobra, but if I had, I's like to think I would have gone for it.

They say hindsight is 20/20...apparently i'm blind in 1 eye.

Yeah, well no actually but I did manage to raise 3 daughters on a wish and a prayer.

I totally understand your plight. I think I have made every financial mistake in the book short of bankruptcy. We live and learn.