From Zero Percent to Thirty Percent in Just One Month
Published on - May 23rd, 2006 (Modified on - September 6th, 2011) (by J.D. Roth) Here’s a nightmare credit card story.
John, of New Falmouth, Massachusetts, said he answered an ad for Household Bank’s Platinum Mastercard, which offered a 0 percent introductory fixed rate for the first 12 months for purchases and balance transfers. John’s existing credit card charged just over 9 percent, not a bad rate these days. But being a thrifty consumer, John said he wanted to take advantage of the offer of 12 months without interest. So he applied for a card.
And here his troubles began. When he received the bank’s “welcome kit”, he attempted to transfer his existing balance to the zero percent card. The balance transferred at thirty percent, though, because the bank processed the request as a cash advance instead of a balance transfer. The bank refuses to budge. But wait! There’s more!
“Because of the high interest rate, combined with the second balance transfer check I sent, my request was not honored by Household Bank because it would have put me over my credit limit,” John said. That check, John says, ended up bouncing, causing late fees and raising the interest rate on his lower-rate credit card.
Banks are not in the business of helping consumers; they’re in the business of making money. You’ve got to be suspicious of anything a bank is trying to sell you. The official Get Rich Slowly position is still: do not carry credit cards.
[via The Consumerist]
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You’ve got to be suspicious of anything a bank is trying to sell you.
Agreed. I see folks all over the internets claiming the praises of one ING Direct (w/great rates for savings accounts).
This violates two of my steadfast rules:
#1 If it’s too good to be true, it probably is.
#2 Be suspicious of people trying to sell you things.
I called them up yesterday after being recommended to them by my financial advisor and was on the receiving end of a hard sale.
I’m conflicted… you know? Go with the masses who have great things to say + the recommendation of a financial advisor or follow my gut?
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beck,
Go with your gut. Yes, everyone I know who has tried ING Direct is also telling me great things as well.
But since any savings account is for short-term holding anyway, do you really need that extra point or two so badly that you can’t sleep at night? I’m all for maximizing ROI, but for money I need to tap at a moment’s notice, I want to be able to march into an office and yell at someone in case I don’t get what’s mine when I need it.
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Re: the nightmare credit card story.
I’m not so sure that John didn’t really use the wrong checks, as the credit card company claimed. I certainly agree that a credit card company will use every possible means to make money from a customer. After all, that’s what they’re in business to do. But I seriously doubt that they would stoop to the level of fraud. Having read, the story, I’m not convinced that John read the fine print upon receiving the Welcome Kit, although he probably did read the fine print on the application.
At any rate, my position is that a credit card are like a hammer. Use it properly, and you can do something useful, like drive a nail. Use it carelessly, and you’ll whack your thumb. Even a moment of inattention is enough to make a difference.
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I had similar thoughts upon reading the story. It’s hard to know exactly what happened without having everything in front of us.
What is sure is that the bank in question is behaving poorly. They’re not exercising customer service. Unless there’s something else going on here behind the scenes (which is quite possible), the bank ought to have worked with the guy. They have no reason not to except for short-term profit.
I like the hammer analogy. Some of us aren’t very handy and should leave the hammering for others!
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When it comes to balance transfer offers, I only take advantage of the ones being offered by big, well-known banks. I only hear and read really bad horror stories from folks who’ve dealt with banks that cater mainly to the sub-prime market.
If a bank pulls a fast one with a balance transfer offer, and you feel you’ve been treated unfairly, then transfer the balance to a well-known bank as soon as possible.
I’ve been transferring balances for over 3 years now, and I’ve never had a major issue. If you play by the rules, stay disciplined and keep your credit score in good shape, then you can really do well with zero percent balance transfer offers.
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NEVER EVER deal with Household bank. They are affiliated with Household Finance. It took forever to pay off $1500.00. They misplaced? my payments and continued to increase my apr. I made copies of every statement, check and anything else that concerned them andit is a good thing I did. These people are crooked thieves.
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