The Kansas City Star reports the amount of time people have to pay their credit card bills keeps getting smaller, increasing the likelihood of incurring late fees, late fees which have been rising in cost over the years. Consumers used to have 30 days. Then it was 25. Now companies are moving towards 20. Furthermore, the date starts when they issue the bill, and it can then take 2-4 days to reach you. Cattle prods towards customers using online bill pay, death by a thousand fees. Keep an eye on those due dates, you never know when they’ll magically shrink again.
A falling grace period can leads to a fall from grace [Kansas City Star via Consumer World Blog]
(Photo: Getty)
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@Buran: Definitely not; of course the credit card companies are only out for profits. They view lending money out as an investment. I’m just saying that there is no free lunch on the liability protection. Merchants pay more for credit cards in part because it costs money to provide all these nifty things like high rewards and buyer protection. They also charge a lot to merchants because they have a near-monopoly and merchants will pay them high fees because otherwise they would lose lots of business.
@DallasDMD: Can you show me any credit card agreement that says your terms aren’t subject to change, given adequate notice?
I guess I wasn’t clear, but that’s what I meant when I said the lender can “pretty much” make the rules. Obviously, there are limitations to what they can do, but your only recourse against subjecting yourself to changes in terms might be to stop using the card for new charges entirely.
Say what you will about credit card companies, but recognize that they’re smart enough to have armies of very well-paid lawyers on hand to ensure they’re not doing illegal s**t. Sleazy, backhanded, conniving s**t, yes. But illegal s**t, no.
I read a lot of personal finance forums and folks seem to gloat about getting credit card companies to waive a late fee or reduce their interest rate from 30% to 15%, as if they’ve won some sort of Supreme Court legal victory. It’s not a legal victory, it’s simply a concession to keep your business.
@johnva: So you are saying that you didn’t read Visa’s web site?
@Buran: Wrong? No, there was nothing incorrect about my statements. Your beating of your chest about ‘federal law this and federal law that’ is a moot point. An issue that serious would have to fail resolution at the bank level, fail resolution at the card issuer level and then escalate to threatening suit for violating federal law. I wouldn’t do business with a bank that doesn’t have a robust fraud protection policy. Even with your federal law “protecting you”, do you think that credit card companies don’t violate federal law every day in their collections departments?
I’ll stick with cash and debit and not take on the unnecessary risk of debt, thanks.
@anatak: What do you mean, I “didn’t read Visa’s web site”? I have no clue what you’re getting at. It says exactly what I said on your link (which is that Visa’s fraud protection does not cover you if the transaction is not processed over Visa’s network). Now, the confusion may be that Visa DOES have their own network now that DOES do PIN-transactions. But not all PIN transactions at all merchants are guaranteed to go over Visa’s network just because your card has a Visa logo. What the Visa Check Card system does is make it so that your debit card can be processed just like a normal credit card (with signature, etc) if (for example) you use it in a situation without a PIN pad.
Credit card and debit card processing is fairly complex on the back-end and there are many networks it can go over. If you look at the back of your debit card you will probably see that it can be used on other networks besides just Visa’s.
And just because there is “debt” does not mean it’s higher risk. I think it’s actually lower risk since I’m not giving a gazillion different merchants direct access to my checking account.
@johnva:
Since links are hard, I’ll copy and paste:
Visa’s Zero Liability policy took effect April 4, 2000, and is a great improvement on the previous policy. The former policy required that you report fraudulent activity within two business days of discovery. After this two-day period, you could be held responsible for up to $50 of the unauthorized charges. With the new Zero Liability policy, you’re no longer required to report fraudulent activity within two days and you’re not responsible for any fraudulent transactions made over the Visa network.
The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network-online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.
For transactions on other networks, the liability decision is left to the financial institution that issued your card. The issuer has the option of extending the same protections afforded by Visa’s Zero Liability policy.
“And just because there is “debt” does not mean it’s higher risk.”
Wow. Your statement says so much about America. Negating the risk doesn’t make it go away.
@anatak:
From your quote: “The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network-online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.”
Like I said, just because you use a debit card with a Visa logo does not mean it will be processed over the Visa network. It can be processed over other networks as well in many cases. What don’t you get about this? Visa doesn’t provide liability protection for transactions that never touch their network. And the majority of online debit transactions (PIN-based) on the U.S. are not processed via Visa’s online debit network. Instead, they go through networks that originated to link ATMs. In that case, Visa’s Zero Liability policy doesn’t help you, and you are reliant on protections and regulations in law (which are less stringent than for credit cards) and your bank’s policies (which may or may not be as good as their policies for credit cards).
As for the risk associated with taking on zero-interest debt that I can pay off immediately at any time, please explain to me what you’re talking about. Or is your aversion to debt more of an emotional or religious thing?
@darkened: No, I’m not missing the point at all. I use my credit cards to 1) get points, 2) put off paying for the stuff for another month, 3) earn interest on my money in the bank for an extra month before I pay the CC bill.
If a “large purchase” is more than you can afford to pay off in one month, you probably can’t afford the item. Emergency expense? That’s what emergency funds are for. Living on credit is really living in debt, not a good way to live.
Dissatisfied with the due date, interest rate or other issues with your current credit card? Call your credit card company and ask for a better deal – you might be surprised at what they’ll offer, especially if you’re holding a competitor’s “pre approved” card offer in your hand.
For cards you carry a balance (and pay interest) on, use the “pre approved” offers received from other banks to get a lower rate. Your current bank would rather keep your business at a lower interest rate versus losing everything if you transfer your balances and future purchases to a competitor’s card (and, unlike opening a new account, this doesn’t generate a hit on your credit report for an inquiry).
Best bets: Have one card you pay off monthly for everyday items; this card should be one with an automatic monthly rebate applied to your statement. If you aren’t getting at least 1% cash back on all purchases, start shopping for a better rewards card.
Use a second card with the lowest possible fixed interest rate for major purchases you plan to pay off over time. If you have excellent credit, the APR shouldn’t be over 9.99%.
Finally, set up your accounts so you receive both paper (snail mail) and e-mail statements. This reduces the chance of a late payment due to not receiving a bill on time.