My temp is soaring after having to deal with the CC companies - 2 of them.
I moved to a new town and changed banks a couple of months ago. I gave plenty of notice to the 3 CC companies I deal with. I am having problems with 2 of them - they cannot seem to get their act together and I am ready to let my anger get the best of them!
CC #1: Tried to make changes online but since the cc acct was closed by my request., I cannot make any changes online. My initial correspondence was online through customer service where they explained that I would need to call. I called AND wrote to the correspondence address informing them of my address , phone number, and bank acct changes. I also sent a check payment and a voided check so they could change my auto-pay information. I requested the change and that all auto-pays from old bank was cancelled immediately. Well, the CC company managed to update my address and phone number but did not change the bank acct, nor did they stop payments on the old acct, racking up late fees and returned check fees on the CC acct. And not just one returned fee for the billing statement, but they tried multiple times to process the payment so I have like 3 or 4 returned fees per statement for the last couple of months- WTF?! I had even sent a second letter with copies of the original request and requested a written response which I have yet to receive and it’s been over a month since then. I am in the process of pulling my documents and this time sending the 3rd letter certified along with a copy sent to the BBB. Maybe that will get their attention. I have set up payments through my bank instead so they will get a hard check instead of autopay since they are being bastards about it.
CC #2: Same here except the customer service rep said he had to mail out a change form for the new acct - I explained that I had changed the payment information online, and he told me I would not need to do anything except allow up to 2 bill statements for the changes to go through. My address and everything else was updated, I made 2 manual payments with the new acct and the cc statement indicated “autopay” on the most recent so I didnt process another manual payment. A couple of days ago I get a notice stating my pymt was returned and I was now past due. I checked my bank, no returned payment. Checked CC acct - new bank acct showing, but showing returned! Well they never processed the new acct information and they never removed the old acct. I wrote a request to have the returned payment and late fee removed, and called them with the same request. Found out the prev customer serv rep was incorrect on the online changes processing the autopay changes. They also denied my request for reversing the fees, stating that through their investigation they deemed the charges valid.
I am furious. These two credit card companies are pissing me off, which is why I stopped using them long ago and have been dilligently working on paying them off. Third cc company, no probs! and when there was an error, and in all fairness was MY error, they were kind enough to reverse a late fee when I had forgotten that my scheduled payment had run out and I needed to redo them (you can set them up several months in advance) because my history shows I make my payments on time.
Are the other two companies making things difficult because I closed their cards out? I had a good payment history until I moved and the changes were to take place.
WTF WTF WTF? I feel like they are purposely trying to screw me over and being difficult. Fuckin CC companies. I’d rather deal with the mafia, thank you!
First of all, autopay clearly isn’t working for you, so you should just cancel it, period. Make your payments online directly each month, too - don’t dink around with having your new bank cut checks to be mailed, etc., because that’s practically asking for more heartache with late fees and such.
I’m also not sure why you aren’t just making your change of address and other info directly online. IME, the changes take effect in no more than a couple of days, and you get email confirmation of the changes made. I think you’re making it hard on yourself by sticking with the old way or writing letters, which frankly isn’t well supported any more, as you’ve found out.
Just out of curiosity, why did you close two accounts that still had balances on them? You can really hurt your credit score by doing that, especially if you only have one open CC now.
I really hope that you’re mistaken. Otherwise, you’re saying, the credit rating agencies will penalize him for not maintaining an account he has no interest in keeping? Perhaps he should chalk up the hit to his credit score as the cost of maintaining his autonomy as a consumer.
Well, the problem is that your score is partly a function of your utilization (the percentage of the total credit available to you that you’ve used). By closing two cards with balances, the OP cut their total credit limit down to whatever the limit on the open card is, which in turns means that his utilization has probably been jacked up considerably… and that causes your score to drop. You look as though you’re getting yourself into financial hot water by having high utilization. It’s even worse for the OP because he has such a thin credit file - if he had other cards open, the total closing of two cards would have had less of an impact.
No one knows for sure because the exact score calculations are kept secret, but is seems that 10%, 35%, 50% and 70% are significant utilization thresholds as far as the impact on your credit scores.
There is no reason to chalk up a credit score hit to “autonomy as a customer”; in fact, it’s pretty short-sighted. The OP is perfectly welcome to open other credit accounts with other banks, or better yet, credit unions, and so ultimately improve his score. That’s especially true if he expects to be making a major purchase (home or car) soon.
Lots of people confuse having CCs with having lots of debt. Not so. If you have spending control issues I can see why you might want to limit temptation, but having alternative accounts that you use once in a while and pay in full are a good thing. Tell me, if the OP suffers adverse action on their sole remaining CC (limit reduced or account closed by the bank), what do they have left to fall back on? Answer: nothing. It’s much easier to get more credit when you already have some, and damn difficult if you have none, especially in today’s credit climate.
Your score is also impacted by the age of the accounts on file. You should leave open the oldest account you have, regardless of whether or not you intend to use it. If you have an account that is 10 years old, and another account that is only 1 year old, and you close the 10 year account, your score will drop because the age of your bureau is now 1 year old.
By the way, while Jean Gray is correct in that it could potentially drop your score a bit (they see a $3k balance on a $5k limit as worse than a $3k balance on a $10k limit, even if you’re filthy rich), there is another side to this. While it doesn’t show up on your credit report, lenders often look at something known as a debt-to-income ratio. To calculate this, they use your theoretical maximum balance (and the monthly payments that would be incurred), not the actual balance, so having too much potential credit is also bad.
In other words, you want a decent amount of breathing room, but not too much of it.
Another tip if you’re one of those people, like myself, who use their card for almost everything, but pay it in full every month. It helps to pay it down early, as otherwise that full amount will show up as your current balance, even though it was $0 a day or two later. I often pay it down right away after any large purchases, even if my statement date is weeks away. This is especially useful if you have few cards and/or low credit limits.
First and foremost, I DID attempt to make the changes online and was told that I could not do so because my acct was closed. Therefore, I called AND wrote in because I WAS INSTRUCTED TO (they were unwilling to assist me ONLINE). I wrote in because they needed a voided check documenting the new acct to set up autopay. I closed the acct awhile back because THEY decided to assess a yearly membership fee after another company changed hands, and at that time my credit was so-so. I gave up on this company getting it together and my only choice is to send a hard check (I cannot do online payments for this acct because it is closed) through the bank since they do not have that CC company listed to receive electronic payments.
And just how many times can they try to draft a payment from a CLOSED checking acct? My gods! And even when I point this out they treat me like I am purposely not paying them when I have made manual payments from my NEW checking acct (duh!) Not to mention that when I call I am transferred at least 3 times and somewhere between the holds and transfers the call drops. (ergh!)
The other CC I was able to make most of the changes online, but not all, as it turns out. I forget why I closed this acct other than maybe I felt I was becoming CC overloaded.
I did not say I had only 3 CC’s. I indicated that I was dealing with 3 CC companies. I have 2 Visas and a MC with one company that really like. There is not a balance on any of the 3. I also have a couple of store CC’s - well, actually I have 4 but only use 2 of them and even then I keep a low or no balance.
My credit score hasnt really seemed to suffer (that I’m aware of) with the closed accts, and my credit is considered “good”, and it really improved when my fiance and I split - as well as it should have since I was no longer busting my ass to stay afloat paying debts of 2 people. I’m sure it will be even better when I get the other 2 knocked off - and then I will be debt free with the exception of my car loan (and that’s not too bad either).
I’m just really angry that these 2 companies are not doing what they should be doing and making me jump through hoops while they continue to draft a closed checking acct and turning around and charging me the return fees for something they should have stopped 2 months ago!
I’ve been polite, I’ve been stern but do not take it out on the rep - I’ve worked in a call center, I know how it is. But it burns me when noone will take responsibility on their end.
This third letter soon to be sent via certified snail mail will include email correspondence & copies of original snail mail correspondence and copies will be sent to the BBB and the credit report agencies.
Nope, that’s not right. Your debt-to-income ratio is the amount of money you spend “maintaining your debt” (that is, the minimum payment required) vs. your monthly income. DTI does NOT take your total available credit into account at all.
People with excellent credit scores can acquire several times their total household income in credit lines. It’s up to individual creditors to decide what level of risk they feel comfortable taking on in extending credit, and the underwriters will use in-house guidelines as well as external credit scores do that.
It’s a good idea to let some balance show, at least once in a while. If you always pay off your entire balance before the CC reports to the credit bureaus, then your activity is not distinguishable from someone who has cards and never uses them. The key point is to show that you are capable of using what credit you have responsibly.
If you haven’t checked lately, you might want to - the screw-ups might be getting reported as late payments, and those WILL hurt your score. If any of your remaining CCs have universal default clauses in their card agreements, you could also find yourself rate-jacked because of the “late payments.”
Have you tried posting a letter at Planet Feedback ( http://www.planetfeedback.com/ )? Sometimes you’ll get a response more quickly there, where the companies are in the public eye. Good luck getting it all sorted.
It still makes no sense. Why would someone who keeps two credit card accounts open, when they have no intention of using them, be a better risk than someone who closes them? That’s just dumb.
You may think it’s dumb, but the credit industry doesn’t. Guess whose opinion counts for more here?
And actually, like I said before, if you never use your cards, that’s not so great either. Using them responsibly is what matters. If you you never use them, or if you close them so that you have a reduced/no recent track record of responsible use, your potential creditors probably won’t have much to go on in terms of deciding whether or not you’ll be a risky person to extend credit to. So maybe you won’t get that loan you needed, or as much as you asked for.
There are a bunch of things that are less than fair about credit reporting, but a slim or no track record in the responsible use of credit impacting your borrowing capability isn’t really one of them.
Yes it does, at least at the companies I developed for. If you have a 50k total credit limit, it takes into account the minimum monthly payment that would be required if you maxed out that 50k, regardless of your actual balance. You can choose to continue to disagree, but I’ve personally written the algorithms in various software applications used by lenders. This is far from a universal practice, but in the private student loan industry, it’s certainly used by several companies. Their argument is that the second you are accepted for a loan, you could turn around and max out your credit lines. Your disagreement actually prompted me to go look to see if there were any legal standards for this (I even dusted off my nightmarish Regulation Z booklet in the process), but I can’t find any that require nor disallow either method.
This is true. Even those lenders who have certain maximum debt-to-income ratios as a requirement have methods in place to override this restriction, on a case by case basis.
I completely agree with this, which is why I see it as a balancing act.
I will choose to continue to disagree, thanks, because you yourself point out that there is no legal standard. Plus, the private student loan industry is a different beast from the consumer credit or even the mortgage industry.
The definition I used for DTI comes directly from TransUnion, which recommends keeping a DTI under 10% for the maximum boost to that part of one’s credit score. And when they calculate my DTI, it comes in under 10%… which means they are looking at my actual balances carried, and not my total credit limits, which are currently about 60% of my gross income. TU is not the only concern that handles DTI in this way, and not just on a case-by-case basis. Heck, do you think the mortgage industry would be in such dire straits at the moment if they did?
Again, it’s up to individual creditors to decide what risk they want to assume. Thanks to the subprime mortgage debacle, many card issuers are looking for the slightest excuse right now to reduce their exposure and cut back on people’s credit limits, and excuses include seeing a drop in credit scores on an account review. The OP says he still has multiple cards with the same issuer - I would definitely try to open at least one more card with a different issuer, just as back-up in case of a rate-jack or a reduction in their credit limits.
Oh, and I meant to add for the OP - if your credit scores are currently above 700, you ought to think about applying for a credit card that offers balance transfers at a teaser rate of 0% for at least the first 12 months, and transfer the balances off your closed accounts. That way you can finally stop dealing with banks that have given you poor service, and drop your utilization by boosting your overall credit limit back up. Here’s one place to start looking for offers: http://www.indexcreditcards.com/ .
In other words, “Borrow money when you don’t have to, or else you’ll be penalized. Never mind why you’ll be penalized; just do it.”
Yeah, that’s my definition of autonomy, too. I really don’t care about fairness. It is simply not a rational way to judge a potential borrower. It’s really stupid.
Re: the OP’s problem with auto-pay through your credit card company… I was warned years ago by a financial planner to never ever use this service for exactly the fuck ups outlined in the OP. They can’t seem to not screw it up. (Like paying off your balance when you only want to make the minimum payment.) You are much better served by setting up your own tickler system for making your payments by the due date.
Of course this doesn’t matter if you don’t carry revolving credit. The other thing is that although the teaser rate for transfers is 0%, purchases on that card might be at a huge rate. It all has to be investigated.
I don’t know that was possible and I don’t know why anyone would choose to do that. Why would I give a credit card company - or anyone else for that matter - access to my finances?
This bears repeating: AVAILABLE CREDIT DOES NOT = DEBT, unless you have no control over your spending habits and feel compelled to immediately max out a card as soon as you get it.
Look, here’s a perfectly good way to build a track record for good credit that involves no debt accrual:
pay a utility bill with your credit card
after the credit card statement cuts, pay your bill in full
That’s it. No interest accrues, there’s no additional debt because you’re paying what you would have paid anyway. The credit bureaus see that you have a consistent record of paying on time and not running up big balances. And if you have a rewards card you can earn points toward cashback, gift cards, airline mileage, whatever.
You CAN work the system to your benefit. Or you can just say that it’s stupid and continue to wander in the dark, hoping that everything will work out okay when you’re in a situation where you need to apply for more credit (for a mortgage or whatever). I know what my choice is.
Well, the OP says he is carrying balances on those closed cards, which is why I recommended looking for a 0% balance transfer deal. Of course one has to look at what happens when the intro rate goes away, but the site I linked to gives all that information up front.
If the OP’s balances are small enough, he might even be able to pay off the remainder of what he owes in 12 months without accruing any more interest. That could be a significant savings right there.