Latest bank fee is for paying off credit card on time every month

[38special]

Traveling w/o a CC is very difficult. It basically means you cannot stay at a major chain hotel. Renting a car locally is possible if you bring in references and jump thru many hoops.

Forget traveling on your debit card if you plan on staying at more than one hotel, the holds on debit cards can take 8 days to fall off depending on your bank and the hotels processor.

It sucks... but it's doable.

I have 3 credit cards and never carry a balance.

Why three? It appears you can get the max out of your credit lines for each and not influence the others... also and the biggest reason: TRAVELING!

In April I went to Florida w/ the family for just over 2 weeks. We went all over and stayed in different 9 hotels. I only had 2 cards then and by the end of the trip I had maxed one out (I want the reward points and even put my cable bill on the CC) and the other was maxed out with hotel holds... I had to plead with the one CC company to extend my credit limit until all the (obvious) holds came off. It sucked. I came back waited for a decent offer and got the third card.

In any event cash means diddly if you are trying to rent a car or get a decent hotel.

Also being able to drop a few grand on an emergent purchase is a big plus. It just takes discipline to only buy what you can pay off. We bought a new house a couple months ago and I made a decision to carry a partial balance on a card. Cost me 30 bucks for 30 days. I figured it was worth it that one time so I wasn't biting my nails waiting for my paycheck to show up and skimping at the grocery store. I paid it off the next month. I can't see how some people would do that for more than an 'extinuating' circumstance.

I had a friend once say "I wish I could afford to buy a new gun every couple of months..." Aside from him drinking too much starbucks, I told him the interest he pays every three months would buy him a new WASR. He could too... priorities and looking forward rather than looking at the moment.

You CAN do it, it's just not a comfortable and easy... who said being Free was easy though?

Wow...the way you put that REALLY puts things in perspective.

I'm already on the way to paying them off but you're correct. The interest on 3 months of mine could buy an AR. Yikes.

Like I said before, paying them off and never looking back.

 

[rambone]

Prometheus and I are on the same page with Credit Cards from the sounds of it. I would rather have them and take advantages of the conveniences of having a line of credit available. I don't carry balances or pay interest. There are lots of situations where having a credit card is much more convenient if not a necessity. Obama's new "Credit Card Bill of Rights" is only going to screw people like us.

 

[6birds]

When the sentence starts with "Obama's new ...", hold on to your bible and your wallet!

 

[Blue Tile Spook]

About 2 - 3 weeks ago we bought a "new" car (2005 model).

My wife and I have not had a credit card since about 1996-1997. The salesman at the dealership, upon starting our financial paperwork, was shaking his head during the whole process. On a personal level he was glad for us that we do not have any debt other than our monthly bills, and maybe even a bit envious. On a professional level in regard to getting loan approved, he "highly encouraged" us to get a credit card to build some sort of credit history because we have very little history. I told him "no." He tried to tell me that even a negative credit history is better than a limited history/no history. We may consider a credit card in the future but we want no part of one at the current time.

My wife and I aren't there yet but we are getting to the point where we will buy larger items with cash with the exception of, say, a house. We aren't there yet because we are still recovering from several years of medical bills stemming from my health over the last decade. So while we weren't able to pay cash in full for the car we were able to put a large downpayment on the car and financed the remainder.

My largest point with this post is that the salesman was somewhat in disbelief that we do not own or use a credit card nor do we have any other debt, and that while he didn't step over any personal boundaries with us, he was trying to counsel us that we should have a card to simply build a history.

 

[henktermaat]

About 2 - 3 weeks ago we bought a "new" car (2005 model).

My wife and I have not had a credit card since about 1996-1997. The salesman at the dealership, upon starting our financial paperwork, was shaking his head during the whole process. On a personal level he was glad for us that we do not have any debt other than our monthly bills, and maybe even a bit envious. On a professional level in regard to getting loan approved, he "highly encouraged" us to get a credit card to build some sort of credit history because we have very little history. I told him "no." He tried to tell me that even a negative credit history is better than a limited history/no history. We may consider a credit card in the future but we want no part of one at the current time.

My wife and I aren't there yet but we are getting to the point where we will buy larger items with cash with the exception of, say, a house. We aren't there yet because we are still recovering from several years of medical bills stemming from my health over the last decade. So while we weren't able to pay cash in full for the car we were able to put a large downpayment on the car and financed the remainder.

My largest point with this post is that the salesman was somewhat in disbelief that we do not own or use a credit card nor do we have any other debt, and that while he didn't step over any personal boundaries with us, he was trying to counsel us that we should have a card to simply build a history.

Don't fall for it - it's a myth. A credit score is only an indicator of how much of a friend you are to debt.

The fact that you have no credit cards and pay for things in cash makes you much wealthier and better off than most Americans, who don't win at the credit card game.

Also, for the credit card slave myth, a debit card works like a credit card for the "I need to have a credit card" moments. The only difference is that you have to HAVE the money before you SPEND it.

What a concept.

 

[hornadylnl]

Don't fall for it - it's a myth. A credit score is only an indicator of how much of a friend you are to debt.

Most people who say this have terrible scores. Great credit scores do benefit you by getting better interest rates when you do have to get a loan. Aside from a few vehicles and a mortgage, I haven't paid interest in 10 years.

 

[henktermaat]

Most people who say this have terrible scores. Great credit scores do benefit you by getting better interest rates when you do have to get a loan. Aside from a few vehicles and a mortgage, I haven't paid interest in 10 years.

My score is perfect, but I'm still right. Just look at the factors that go into a FICO score and you'll see... it means you're a good slave to debt.

 

[hornadylnl]

My score is perfect, but I'm still right. Just look at the factors that go into a FICO score and you'll see... it means you're a good slave to debt.

Really? I have an 808 and have no debt and have never been a slave to it.

 

[henktermaat]

Really? I have an 808 and have no debt and have never been a slave to it.

Good - but most people don't make that sliver of statistics.

 

[Jay]

I never had a credit card until just after our vehicle broke down on vacation and I walked into the rent-a-car joints with wads of cash, and we had to take a bus home.

We buy gas with a CC, but move money on paper so that when the statement comes we pay it every month. We have three CC's.... One for major stuff, one for online purchases (with a very low credit limit), and one for nothing but gasoline.... we get a rebate of a $25/month gas card for using that one. But we carry no balances. Our CC's are with USAA Banking, as is our insurance, and our annuities. We have no issues with our CC carrier, and we have no balance requirements other than late fees, (which we've never had). We've dealt with our local "small town bank" (population is 1,020 folks in town) for over 40 years, and we have become spoiled rotten. I was talking to the VP yesterday, (first met her when she hired on as a teller) and she remembered when my son paid us back a small loan, with a check made out to "Mom" .... no biggie, the bank has known my son, and his mom for over 30 years. Our bank has three tellers, a Pres, VP, a loan officer, and two book keepers. I really feel for some folks who must constantly switch banks or battle stupid fees, but ya gotta do your homework, and be as smart as you can in choosing your banking institution.

 

[Boilers]

Bank Logic: Perfect credit citizens cost us money!!!

So we need a perfect credit FEE to make up for it.

Got Perfect Credit? You Could Be Charged For It! - wcbstv.com

"There is a big segment of their population that they will have never made money on, which is people who pay their bills on time every month," said Ben Woolsey, Director of Consumer Research at CreditCards.com.

Got Perfect Credit? You Could Be Charged For It!
Bank Of America, Citigroup First To Try Out Idea, Which Will Undoubtedly Alienate Many Who Follow The Rules
Timeline: U.S. Credit Crunch & Financial Failures
View Market Summaries & Leading Stock Changes
By ALEXIS CHRISTOFOROUS, CBS 2 HD News
NEW YORK (CBS)

Loraine Mullen-Kress carries a Bank of America credit card and religiously pays off her balance.

"Flawless credit," she boasted.

Yet now, her good credit habits could cost her. Earlier this month Bank of America started
notifying customers like Mullen-Kress that they will be charged a new annual fee of $29
to $99.

"There is a big segment of their population that they will have never made money on, which
is people who pay their bills on time every month," said Ben Woolsey, Director of Consumer
Research at CreditCards.com.

Bank of America said in a statement: "At this point we're testing the fee on a very small
number of accounts and haven't made any final decisions." Citigroup is also trying out an
annual fee with some card holders, and analysts expect more banks to follow their lead.


The banks are starting to charge fees to reliable customers in response to a slew of new
credit card industry regulations that will limit when banks can hike interest rates.
Cardholders who get a new annual fee notice in the mail will be in a no-win situation.

"They can either pay that fee or they can close the account, and if they have had the
account for a while and they close it, they are potentially going to hurt their credit card
score," said Woolsey.

Analysts say right now the banks are trying to figure out what their customers will tolerate.
Many say they'd cancel cards with a high new annual fee.

"I think it is really bad. They're encouraging you to be a bed creditor or not have good credit,"
one New Yorker told CBS 2 HD.

Said Mullen-Kress: "An annual fee would not be tolerated."

Credit card companies call the fees an experiment. Whether they stick depends on whether
customers are willing to pay for something that's been free for so long.

If your credit card company does start charging you to carry its card, call and complain. If you
have a good credit score and you've been a loyal customer, they may be willing to waive the
fee to keep your business.

You may also see annual fees go up on cards that offer rewards like miles and hotel rooms.
That's when y ou'll have to weigh whether the rewards are truly worth the higher fee.

 

[padishar123]

They try this with me periodically (I open CC's all the time for the discount, pay it off and close it). I call and refuse on principle to pay the fee. They waive it after 10 mins of arguing and credit my account. The following month i call and cancel the card. Like I care.

Two thoughts:
1. The only CC I've had long term is the one through my local credit union. It is LOW interest rate (6% i think...like i pay interest anyways) and is administered the way all CC's used to be (very forgiving and no fee problems). I've NEVER had a problem with them...ever!

2. I've noticed the other "game" the stores play (Macy's card, Lowe's card, etc...): If you close your account, it's really in "hibernation" and can be reopened no problem. It used to be in "hibernation" for 3 months before it was "really" closed. I've noticed this has slipped out to three years (Macy's) to prevent people like me from gaming the system.

It all just comes down to greed. VISA takes 3% commission on every transaction from the retailer. I don't know how that is divied up between the banking industry but I suspect the CC companies are simply unwilling to be competitive when they have most people by the short and curlies and they know it. Every time they are legislated back into a "fair to the people" business model they just dream up new ways to worm around and screw people.