Posted on 08/23/2007 1:39:01 PM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- Fallout from the mortgage mess and lower home prices may have started to creep into the credit card arena, judging from July payments and some initial moves by issuers to tighten the screws on cardholders.
After falling for three consecutive months, delinquent payments on credit cards -- defined as more than 30 days late - increased slightly in July, to 4.64 percent from 4.62 percent in June, according to CardWeb.com. A year ago, the delinquency rate was 4.18 percent.
The amount of credit card debt consumers are paying off, meanwhile, has fallen. The portion of outstanding balances paid in July slipped to 18.3 percent from 18.4 percent a month earlier.
The repayment rate hit its peak (21 percent) in October 2006 after credit card companies began complying with regulators' mandate to boost minimum payments to cover interest, fees and some principal. For years, the default minimum was just 2 percent of your outstanding balance.
CardWeb.com CEO Robert McKinley suspects delinquencies may increase in the fourth quarter because of the credit crunch. Mortgages and home equity loans are harder to come by, home prices have fallen and more than 2 million subprime adjustable rate mortgages (ARMs) are beginning to reset to much higher rates
(Excerpt) Read more at money.cnn.com ...
I had one of those Citibank Platinum Dividend Cards. I accepted it because it offered 5% back on grocery, drugstore, and gas purchases, on a maximum of $6,000 per year. They canceled the program partway through the second year I had the card. At first I thought they'd canceled it just for me, because I hadn't racked up any interest or late fees. So, I googled and found that, indeed, they really did cancel the program. Then I went out and bought a couple of grand in grocery gift cards in order to reach the $6,000 limit for the year before the mid-October deadline.
I figure Citibank lost several hundred dollars on me, since they'd rebated $600 on $12,000 in charges, but earned only the two or three percent (maybe less) they get out of the merchants.
Fortunately another bank is offering the same deal but with Master Card, so I continue to make money.
Capital One tried to issue me a $25 late fee on a $5 balance (I paid the account a week early but forgot about a grocery store visit I made after I paid), so I bitched at them and they waivered the fee (dropped them anyway). If you righteously bitch at them, they will often waiver the fees. They can't say much to you if you have a record of paying the balance every month. On the other hand, if you carry a massive balance, you make yourself a slave, and they're less likely to listen to your complaints.
B of A's system has two classes of payee: electronic and non-electronic. Electronic is settled on the day you set, computer to computer, with no involvement of the US Postal Service. The credit card companies are all electronic payees, as far as I know.
For non-electronic payees, the bank cuts a check and mails it, with four day delivery. That works fine for the electrician or the plumber or the condo association.
Those rates are very competitive, even when compared to the credit unions.
VERY DANGEROUS.
The big credit card issuers like to impose time of day restrictions on payments. They even like to futz around with time zones, correct addresses, and whether stuff is paper-clipped or stapled.
NEVER try to cut it very close to the due date and time, or you run the risk of getting very severely burned.
Not a very hard decision to make...not very hard at all.
I've only encountered one problem with B of A. That involved an electronic payment to a utility company that was not credited. I entered a complaint via their online interface, and the B of A rep got it straightened out within a day (the utility company had screwed up).
It's all part of the election run-up, you know, getting us all convinced the economy is a disaster (and only a Democrat can fix it of course).
That fact might be meaningless to the financial institution, but to the customer (or member) it can make a huge difference.
"Alex, is there a "p"?"
If you are illegal you are a protected class. Everything is free, if you try to make them pay their own way you are a racist.
Why wuld anyone do that?
If your payment is being sucked out of an interest bearing account it makes sense. Cents too.
Credit cards need to go away. If you haven't the cash, don't buy it.
Look for new “fees” for paying off your credit cards on time, especially if you use your card monthly.
I pay all bills with indivadual electronic check, written by me.
I won’t use automatic pay systems or use payment through my bank with them sending an electronic check.
“If your payment is being sucked out of an interest bearing account it makes sense.”
I keep most of my money in a non bank money market account, I only keep 3-4k in my bank account which isn’t enough to bother with an interest bearing one, they don’t pay enough to bother with,
“Alex, is there a “p”?”
My typing went to crap eversince I severed a tendon in my hand.
I do that now....even though sometimes I put the check in the envelope and don't actually mail it for a couple of days so paychecks can get in first....
I used to always wait and wait and wait....it was always a source of anxiety and I find if I do the writing of the checks right away, I don't worry so much...
..you see, people like us are the REAL reasons the subprime market is a mess..
..we've taken advantage of free money for about 3 yrs now...
..we never pay finances charges and we just happen to pay the entire card off just before the interest is set to start up ....
Roger that Dale, makes sense
My typing went to crap eversince I severed a tendon in my hand.
Sorry about that, just having a little fun.
Heck, I am then King of Thy0pos and have no reason for it except I like the distinction.
Always good to see your posts, buddy!
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