Dear Bank of America,
We’ve been together a long time. Since 1997, in fact. I’ve known you longer than I’ve known one of my children, longer than I’ve owned my car, and longer than I’ve lived in my home.
We’ve been through many things in the past 12 years: health crises, career changes, unemployment, underemployment, births, deaths, vehicle purchases, and a change in residence. You’ve helped me get through many of these transitions and for that, I’m grateful. Oh, sure, it cost me plenty in interest, but paying you was far better than losing my home. In fact, I’d like to think that our relationship was even more beneficial for you. Exactly how much money did you make on my borrowing through the years? Was it an obscene amount or just a slightly less than obscene amount? Yeah. I thought so.
Since we’ve had such an enduring business relationship, the length of which your customer service representative made sure to point out to me today when I called you, I would think that you’d want to do your part to help maintain it. Why should I be the only one who’s doing all the giving?
Last month, I didn’t receive my statement and failed to discover it until 4 days after the payment due date. You’re not my only bill so I didn’t notice it was missing. As soon as I realized the problem, I made an instant online payment. I know it was 4 days late, but it wasn’t my fault, I remedied the situation promptly, and didn’t give it another thought, especially since I’m never late with my payments. Sometimes stuff happens, right?
I didn’t expect to find a note from you in my new statement telling me that you’ve increased my interest rate to 27.99%, the amount for default accounts, because my last payment was late. Default? Me? For a payment that was four days late? The first time ever? To add further insult, you charged me a $39.00 late fee.
Considering our history together, I fully expected that you would want to do the right thing when I called you today. You would surely see that this was an unusual situation which happened to a long-term customer who always pays on time. I figured you would at least remove the default interest rate, or eliminate my late fee, or both. After all, we’ve been doing business for the past twelve years. I’ve helped you earn a lot of money over the last decade.
Apparently none of that matters, along with the $15 billion in TARP funds that you’ve received courtesy of peon taxpayers like me. You evidently need money so badly that you’re willing to betray a good customer in order to get it any way you can.
I was told by your customer service representative, the same one who only moments earlier thanked me for being a customer since 1997, that there was nothing that could be done. If I make all of my payments on time for the next 6 months, you’ll look at my rate and consider adjusting downward at that time. She was unable to tell me why she couldn’t simply adjust the rate now or waive the fee. I was basically told that I have to deal with it; evidently that’s bank-speak for fuck you.
I’m here to tell you that I’m no longer going to continue to make you rich. I am moving my account to a different lender. Not only will you no longer have my business, but the next time you put your greedy little hand out asking for more bailout funds, I’m going to write to all of my representatives and implore that they tell you no.
Maybe it’s time that you learn how to deal with it.
Comments
I'm beginning to wonder if even our deposits are safe with banks any more. Rated for the gentle nature of your break-up. :-)
p.s., did you try asking for a supervisor? that sometimes works.
Awesome letter, by the way ... not sarcastic at all ... very professional ;0
Is it still against the law to send anthrax through the mail???
Nice one.
rated
I'd call them back...ask for someone with some clout , tell them you're gonna write and call your legislators and the attorney general, etc, etc.... You go girl....
Sorry this world just SUCKS right now.... can you tell? You've hit another nerve?!?!?! (But I'm hangin' in....by my fingernails...hope you are too!)
You're lucky that you have the gift of humor to help you through this thing.... Me? I'm mad as hell and I'm not gonna take it anymore!!!!!
A few years ago I went to the local BOA to cash a payroll check. The payer had an account there, but since I didn't, they charged me 5 bucks. WTF? The guy I work for has an account here.
They have the power to correct your very minor oversight. Hell it wasn't your fault the bill didn't get to you in time. Shit happens.
My guess is some out of touch CEO in an ivory tower somewhere ordered a mandate that states no mercy to the peons. EVER!
I hope all of their legs grow together. Fuck 'em.
Lisa - I asked if there was anyone else there who could help me and she said no.
1IM - 18 cents? Sheesh! It's despicable how these banks treat their customers. Whatever happened to the customer always being right?
Mung - I can't get rid of the debt but I can transfer it to a different lender. Believe me, I live for the day when I can tell them all to go to hell.
Mr. Mustard - Kent Pitman has written excellent posts on the usury practices of credit card companies. It amazes me that this sort of thing is allowed to continue unchecked.
Hipployta - I swear, it's all set up so that we can never win. Debt ratio too high? Too low? None of it is within out control because the banks can arbitrarily decide to reduce the limits or increase the interest rate without warning.
Wits - It HAS to be illegal. No one challenges it because the banks and the government are in bed with one another. I am going to write to all of my representatives about it. Maybe this administration will be the one to put a stop to this blatant thievery.
Michael - I never realized it before but wishing that someone's legs would grow together is the best curse ever. :)
Resistance - Did BOA let him go or is he leaving voluntarily? In any event, I wish him the best including a better job with a less creepy employer.
Sincerely,
The Greedy Ones from Charlotte.
I heard that it says in the fine print on your credit card contract that basically they can change the terms any time they want and you can't do anything about it. Ridiculous.
I haven't changed banks in over 20 years and yet I've been with American, Meridien, First Union (the initials of which always seemed so appropriate), Wachovia and pretty soon it will be Wells Fargo. (I think I remember all the changes but I might have forgotten one.) You'd think that remaining steady while they changed hands all over the map would count for something but you'd be wrong.
After all, I'm only a person not a bank.
OES - Now, now...what would BOA do if they found out you were spilling their greedy secrets?
Faith - You're right. They've pushed for deregulation to the point where they can charge any amount they want. Remember when interest rates used to be set off of the Prime rate? Now it's whatever figure they feel like. Rates have skyrocketed in the economic crisis when people are least likely to be able to pay them.
Mrs. Michaels - An inactivity fee? Are you kidding me? It just gets more and more bizarre.
Jimmy - I'm afraid that this "default" is going to trigger rate changes among my other cards. I asked the CSR about that during my call and she said it wouldn't affect the other cards, but I don't believe her. That will REALLY send me off the edge.
By the way, since when does the word "default" mean that a payment was received 4 days late? I thought "default" meant "skipped town and failed to pay."
The environment now with companies like BoA, cable companies, insurance and other embedded institutions is that they can rip you off through fees arbitrarily levied, incompetence and rate increases based on whim. They make alot of money from people who don't check their statements or don't complain when they do. It's now a part-time job keeping these people from stealing from you (sometimes directly taking money out of your bank account without notice!). It requires the ability to be nice but aggressive and patiently asking for escalation after escalation. It takes hours on the phone. It takes a strong stomach.
I am happy with my local bank and credit union. Both are doing well in this recession. It's the big humongous banks like Citigroup and BofA that are reeling from their own bad decisions and greed.
As far as my credit card, I usually pay the bill immediately as they don't give you much time to do it. I learned that when my payment was a day late, generating a $30 late fee.
I bet if you called them they might rescind the late payment fee in order to keep you as a customer.
At the risk of sounding like a bit of an advertisement, but really only because I have a lot of pre-packaged thoughts on this matter, I suggest anyone wanting to read more see my Hair-Trigger Credit Card “Default Rates” and Credit Cards: A Tax on “Being Poor”.
The real problem is that all the banks are doing this, so there's little option in switching. One can even make the argument that all the banks are legally obliged to do this nasty practice under present law. See my Fiduciary Duty vs. The Three Laws of Robotics.
For that matter, many businesses seem to operate on the "gotcha" philosophy and then boo hoo when enough people decide they can do without them.
Guess they'll just have to deal with it.
They are yucky. I'm waiting to see if they'll lower the interest rate even more. I've become intrigued about it.
Monte
Ardee - You said it. It takes a strong stomach and nerves of steel. Why are customers always having to prove themselves? Shouldn't it be the other way around?
Cindy - I wish I knew who to turn to about all of these injustices. I'm constantly writing letters, but nothing seems to change.
Mrs. Michaels - "Callous" is a perfect description.
Pete - I often wonder why Obama, in his quest to fix all things broken, hasn't even mentioned regulating credit practices. Maybe he wants banking to stablize first. I'm sending him a letter anyway.
Stellaa - I like your idea. That's exactly what we need to do; maybe hitting them in their pocketbooks would get their attention.
JL - Hmmm... I didn't think about making them have to sign for it. Great idea!
Sao Kay - Thanks for the plug for National Bank of Omaha. I'll check them out. The bitch is that my FICO score will be lowered because of a new credit inquiry and a closed account. They get you no matter what you do.
Joan - Unfortunately I did ask them but they were unwilling to do anything for me. It doesn't seem right. Thanks for the tip about credit unions. I'd been meaning to join one but kept putting it off. Maybe this is the push I need.
Ricky - I feel for you. I can't imagine there being more fees than there are in this country!
Verbal - Yes!
fireeyes - You would THINK that's what would have happened, but evidently we're living in a bizarre universe these days that only supports greed.
Stellaa - Well, I'm for sure not going to Citibank! Thanks for telling me about Giannini. I'll look for the video.
Teddy - Believe me, I can't wait until I have this debt paid off and I can be free of these fuckers. Thank you for stopping by.
LandP - Ah, yes - the "Bank of Idiots" post. I remember that one! I'm convinced that they're all the same, they just have different names.
ikilledhiswife - Thanks for the tip to use the cancellation option. I'll give that a try (if they even WANT to retain my business. I'm not sure these days!)
Lea - I'm probably naive, but what happened to all of us being in this mess together? It amazes me that there are still people looking for every opportunity to grab more than their share.
Kent - I'm so glad you stopped by. I recommended your posts in an earlier comment. Thanks for providing the links here.
flyover - I hear you. Perhaps we'll revert to a cash-based society when we finally hit bottom in this current crisis. Can you imagine what that would look like?
William - The sad thing is, they're all crooks. I'm going to check out some of the suggestions presented here and hope to find a better lender. No promises, but that's the plan.
Kaysong - Yes, I'm going to look into the credit union. Someone else suggested it, too. There's one not too far from here which doesn't have requirements that you work within a particular industry.
Deborah - I'm disgusted with AIG but I wasn't aware of the points you cite. I'll be over to check out your blog.
Odette - Oh, yes - they ALWAYS bust out the good rates after you've paid it all off. Jerks!
Monte - Thanks, my friend. :)
Marcela - That's exactly what they do here. So it's the same in Argentina? I guess greed isn't simply an American affliction.
Anyway, this was good - my rants tend to have a bit more cussing in them!
We just got a notice from Capital One that they were raising our interest rate to something like 30%! Why? No reason? "New Terms". We've never missed a payment or been late and the balance we out is less than $200. Lame. We want to cancel the account, but are worried about the hit to the credit score. They have us by the balls. Rat bastards.
Thanks for bravely writing this!
my credit card blues:
http://open.salon.com/blog/voicegal/2009/02/02/credit_card_blues
I want to kill them. Really really badly.
Credit unions are the way to go. I'm always surprised by how few people use them.
I am so sick with what the banks have done. I just got the same letter you got and oh, just wait until they tell all the other banks and your interest rates soar across the board. That's what happened to me. I payed one day late, via phone and all my other accounts lowered my limits and raised my rates (one as high as 32%). This happened in the last 2 weeks. I HAD a rating that was high 700s now it's fucked and I just don't care about these accounts anymore. I've talked to supervisors and their supervisors and not one of them can do anything, or so they say. I've actually decided to stop paying them all. I could have managed it while they were at the 10-16% range, but at 32%? no way. Given a choice between avoiding credit collectors or keeping the house, I'm keeping the house. It's a decision I made this weekend and I'm still sick about it. But war will do that to you.
I'm also considering pulling out the remaining cash I have in my bank accounts. Yeah, I could get robbed, but now that I'm unemployed I'll be home all day to defend what little I have.
I have no faith in the banking industry. I feel they are willing to bankrupt 80% of America just to satisfy their shareholders. I think everyone should quit paying.
Thanks.
The lending practices of credit cards should be returned to the status of illegality they enjoyed before the fifties.
Julie - 30%? That's criminal! There's no reason for these rate adjustments but there's also no one to tell them they can't do it. It really stinks.
sajeja - You can't win no matter what you do because it's their game and they make the rules. Of course, they also change them at will, too.
zumalicious - I'm thrilled to see you here! Thank you so much for reading my banking breakup letter.
AshKW - I'm going to go check out a credit union tomorrow. I've never heard anyone complain about them. Thank you for stopping by.
Spud - It might be old fashioned but I still believe that there should be some sort of give and take in a business relationship. Not all take like these greedy pricks want to do.
voicegal -Thanks! I'll be over to check out your blog. Thanks for posting the link here.
designanator - You know, I keep remembering when these pieces of legislation were passed and thinking at the time, "wow, that can't be good." Here we are, getting to see how truly awful it is. It makes me want to be even more proactive in the future.
Emma - Thanks for the credit union recommendation. I'm excited at the possibility of it working out for me. I appreciate hearing that Canada has escaped many of these problems since your banks are still regulated. Whenever I hear someone attempt to defend deregulation, I want to choke them.
Sam - I expect that will happen to me next. They are all in cahoots with one another. No doubt the rates on my other cards will increase, too.
Palindrome - Oh my! What a nice thing to say! Thank you VERY much! :)
Celestial Elf - It's a joy to find you here! Thank you for the book recommendation. I will look for it. A bit anarchist, huh? Maybe it will make me even more cranky!
newblog - I agree. The fees are obscene and designed so that you'll slip up and have to pay them. I always wondered why they simply don't deny the card if you're over your limit. Why allow the charge unless they see that as an easy way to take more of your money.
Cathy - "Bank of Mattress" - I love it!
David - One of these days we'll all get to write about some good news (hopefully!) Thanks for the compliments. :)
Grandjester - Wow! Great word: "humungofinanciocongloms." Can words be patented? If so, that one definitely should be.
JustJuli - I guess there's no such thing as loyalty when you're dealing with large banks. It's sad.
angrymom - Oh, believe me...I'm sending it to them!
Jimmy - You made me laugh out loud with your Borg comparison.
I ran into the exact problem 2 months ago. On a card I rarely use, I missed the bill. I called to immediately pay and they wanted $35 dollars to take my bank routing info for instant credit. Online payment would take another day and put me another month behind and more late fees and more risk of reporting to credit agencies.
After enough arguing I got the $35 dropped. And it showed up on my credit report as something ambitious like "other". It did not hurt my score and my report still says "no negative activity" . So I guess I got lucky somehow.
I know the game they are playing. They can't play it with me because they know I don't carry balances. They did it to a friend who found herself in 30K of CC debt on multiple cards. Her bad behavior is a whole different story. But when she missed a payment it all collapsed on her. Each bank refused to give her any kind of a break because they KNEW they had her screwed. 12 - 20% rates. She tried in vain to get transfers to other cards with teaser rates and had some degree of success, but it was all too much. They could see her minimum payments for years on multiple cards and knew her threats of leaving them were meaningless.
I became very mixed about this. She is a M.D. with a great income and did this to herself. It ruined her life and our relationship.
She never defaulted and probably paid that 30K three times over.
The only way she ever got out was to marry another guy that took care of it.
While I object ethically, there were times I thought she should just do the BK thing. They had gotten more than enough interest and were merciless. The reason I did not fully support that is because even in the height of the problem, she kept spending.
Her inability to manage her spending is exactly what the banks want. In your case it sounds like they are "hoping" you have no choice, but apparently you do. And hopefully you will not get dinged on credit report.
On a role reversal note, a few years ago I had as much as 90K in cash advances on multiple cards at 0 - 1%. I took there free money and put it in CDs for 6% for 9 -12 months.
Even when I made a late payment then I still beat them into submission with threats to pay in full and be done with them.
When I went one day into the bank and wrote a five figure check to pay multiple accounts at the same bank, the teller asked me if Schwab had given me a good deal on a consolidation loan. I said "No, you (Chase) gave me the good deal". She never understood how I had taken advantage of them.
Anyway, you should be done with them. I have a ling list of banks, phone services, retailers etc that will never see another penny of my money. I give them one chance to remedy bad service, if they say no, I'm gone forever.
Marcelle - Oh no...no doubt that same thing is going to happen to me. If they all raise their rates and lower their limits, I'll be pretty much screwed. I'll never be able to pay them off and what's worse, my FICO score will be toast just in time for when I need it (my car is coming off lease and I was going to buy it. IF I can get a car loan, that is.) It all stinks. We need a revolution in a big way.
Beth - Aw, thanks! Seeing you in my comments makes me happy. :)
Poet - Be sure to let me know if you post your banking stories. It's probably that misery loves company thing but I'd love to read them.
Older/exasperated - From the comments here, it sounds like we all have plenty of company in our "screwed by big banks" club. Thank you for stopping by.
scoubidou - At these ridiculous interest rates, there will no doubt be tons of credit card defaults. Who can be expected to pay 30% interest? That's no better than dealing with a loan shark! How is this even legal?
Mind you, when we wrote the check we had plenty of money to cover it.. They hung onto it for nearly 30 days until we didn't.
Since Kent pimped his links I don't feel so bad about doing the same with mine. You can read my whole story HERE
Why?
Because it says so in the agreement that governs your account. Back in the days where they were so anxious to extend credit to people, they'd just waive the late fee and not increase your interest rate. Hell, one time, when I was on business travel and couldn't make a payment, I called Citi. I told them I was on the road and couldn't make a payment, and they not only waived the late fee but they waived the interest that would have been accrued.
Now? When was the last time you got one of the "you've been pre-approved" envelopes in the mail? I don't get those anymore, and I used to get dozens of them every month.
They're not trying to add new customers anymore. They're looking to shed them. Amex is offering people money to close their accounts!
Meredith Whitney, who called the bank crash and who did so well at predicting what has happened that she left Oppenheimer to start her own firm, predicted that credit card companies will shrink their customer's line of credit to the tune of nearly three trillion bucks.
Because this is happening, instead of trying to keep customers happy, they're going to nickel and dime you to death.
So don't miss a payment, don't run a balance, and make sure that bill is paid on time every time. They are not going to cut you any slack.
And honestly, since they've received my tax money, I don't want them to. I want that TARP money paid back as quick as possible. One way for them to do that is to generate as much revenue from each customer they have, which means no slack allowed.
No credit cards for me, I only use a debit card. Keeps me honest. No money? No spending. Simple.
Credit Unions are the way to go: "In business to serve our members."
no money, no insurance? No healthcare.
This is because--if someone hasn't commented about this already--any other credit card you have will see the increased interest rate and late payment and use that to justify increasing their interest rates. This includes gas cards and department store cards. If you have a teaser rate or promotion on anything, it can and probably will be ended, and your rate on that will be jacked up as well.
My ex-husband was with Chase for 10 years, no late or missed payments, excellent credit. He was 10 days late on a payment; it was stuck to the inside of the mailbox and was simply overlooked by the mailman. They tripled his interest rate and reported a late payment to the credit bureau.
Within 30 days, every credit card he had had tripled their interest rates. He lost a "12 months no interest" promo that he was planning to pay off right before the promo ended. He was forced to pay an astronomical interest rate on the used car he needed to purchase in order to get to work after his old one--paid off--died. His payments had more than tripled in less than a month.
He was unable to make most of his payments. He sank into major depression, developed panic attacks, was forced to resign from his job and eventually lost his home. He ended up moving back in with his mother, his credit shot to $#it. He's now on 5 or 6 medications and is undergoing intensive therapy.
The most painful part of the whole thing happened a few years later, when the worst had passed and he was growing accustomed to his new life: Chase sent him a prequalified offer.
"Hello, Former Chase Customer!
We value your business, and would like to offer you a very special rate, as we haven't screwed you enough yet! You'll pay the very low sum of your first-born child until you go insane, then you'll pay just your soul after that!
We look forward to causing you continued pain!
Sincerely,
Lucifer, VP of Credit Affairs, Chase Bank"
Good luck to you, and I hope you can get this fixed.
Forgot to mention that you should check your fine print if you want to really max your blood pressure. Some companies actually list a time by which payment must be received before it's late. On a few that I've seen, the time listed is 12:01AM on the date it's supposed to be due. This means that if you don't pay early--and don't forget all the time your cash spends in "processing"--they will eventually hit you with a late payment.
Also note that online payments are not necessarily processed instantly. If you're close to the due date, you may want to speak with a rep, even if it costs you a few bucks to make the transaction to an actual person. It could save you untold amounts in the long run.
I have to tell you about my bank. I use a tiny little bank that's located where I work. I was laid off from my job in 2004 and was still making payments on my car. Once I was laid off, I quit the payments since I had them coming right out of my paycheck. I didn't make another payment until 2006 when the company hired me back. I went into the bank immediately and apologized a bunch. The woman in charge told me not to sweat it, they knew what my situation was. They knew that eventually the company would see that laying off 200 people was a bad idea and would be begging people to come back. My year and a half default of payment didn't even show up on my credit report! Borrowing money from them is almost like borrowing money from really understanding parents.
Steven and Jane - Thank you for stopping by.
Ric - Yikes! That's an insane amount of fees for a $25 check. Banks are definitely not friends of people who don't keep large balances in their accounts.
Tony - You're right that the days of banks accomodating their customers are over. I can't help but feel that this urgency to rack up every possible fee has less to do with their wanting to repay the TARP money and more to do with blatant greed. They're doing it because the can. Maybe they even worry that their gravy train will come to an end if the government begins to re-regulate their industry once again. It stinks. I'm desperate to find a way out of it.
ocular - It does seem like the people who are with smaller banks are doing much better than those who are with the large ones. In many cases, though, people started out with a small, community bank only to see it later bought out by the very large institutions they'd sought to avoid. I guess the lesson here is to avoid them if you can, and if you can't, watch every single thing they do.
coffeegyrl - Oh health insurance....don't even get me started on that one!
Dalivus - Exactly. They're all the same, they just have different names.
Susanne - Thank you! I just wish there was less to be pissed off about.
Sickofstupid - That's exactly what I fear happening: watching all of the rest of my accounts follow suit with the interest rate increase. It's a shame that there isn't a bank that would be willing to consolidate people's credit card debt with sane terms. They could make money and help people get out of this nightmare at the same time. Thanks for pointing out their nefarious practices when it comes to due dates. I've always been mindful of them. It stinks that I've tried so hard to stay ahead of them at this game and one stupid undelivered bill has now screwed me for all of eternity.
Jess - I want to live where you live! That's an amazing story. The fact that it happed from 2004 to 2006 is even more remarkable. I can't think of any bank that would do that around here.
This is an useful web site for those interested
http://bankdeals.blogspot.com/
Connie - I think I am going to send it at least to Obama and to my local congresswoman (the only one who seems to be in tune with her consituents.) This is going to get much worse and when it does, it's going to be really ugly for all of us.
Great post, Lisa.
I know that goes against the American way and many people would argue it can't be done. But I say: Sure it can. Many people do it, and after all, human beings lived thousands of years without credit cards (and many still do). My parents (and most of their generation) used theirs rarely. We all have to use them now for some transactions that can't be done any other way but we can choose to limit their use to those and then pay by check or cash for everything else. That's in fact what's always advised for people trying to control spending -- that and paying off their balances, since the interest rates tends to be usurious even at supposedly "lower" rates, and they keep compounding.
When I was young and first working, I started to charge things more and more and gradually built up a balance I paid on every month but never paid off all the way. It went on that way for a couple years. My balance was never that huge, but it was more than a month of my salary. And after awhile I realized how much interest I was paying every month that I could use for better things, and also that at the rate I was going, I'd never pay my balance off, since I kept adding some more charges every month. So I made it a goal to get it paid off within 6 months, budgeted, scrimped and did it. And I've never carried a credit card balance in the 20+ years since, and I hope not to in the future, unless I really had no other choice, and for necessities.
I know all the arguments why people can't do this (I've heard them when I've said this before.) But hey, I also lived without a microwave until my late 40's. Americans never believe that's possible, either. But it is possible to not do the things that most people think are de rigueur in modern American life. And running a credit card balance is one of them.
Silkstone - Of course not using credit cards or paying them off in full each month is the ideal situation, but what can people do when they have balances and no means to pay them off? Is it right that the banks are allowed to arbitrarily raise interest rates to obscene levels with no notice? That's the point I was trying to convey.
Especially if you have high credit limits, the people who develop your credit score are going to look on accounts with zero balances as a bad thing. Companies will be afraid to give you new credit if you have a bunch of accounts with high limits and zero balances because you may no longer meet their credit requirements if you suddenly go on a spending spree and run all accounts up to the limit.
The best thing to do (in terms of your credit score, that is) is to maintain balances of approx 1/3-1/2 of your credit limit, and to pay more than the minimum payment each month. Pay early, or at least, on time. Continue to use the card to maintain the balance you set for yourself.
One idea is to use the card to pay for utility bills, fuel, etc. Set aside that amount, and use it to make your credit card payment. That way, you're paying two bills with the amount set aside for one. **This is also a good strategy to stay afloat for those struggling to pay all their monthly bills, IF you have available credit on your card. Say you have 4 credit cards, and the payments are $200, $50, $400 and $250. Your utility bill is $250, your phone bills are $100, your mortgage is $1000, and your cable bill is $150. Your monthly bills total $2400, but you only have have $1500 available to pay bills. Use the available credit on each card to pay the utility bill, phone, mortgage and cable, then send the $1500 directly to the credit card companies. You will have saved yourself $200 in monthly payments. Please note that this strategy will NOT help you get ahead; it is simply a way to help you make your monthly payments, basically allowing you to tread water. If certain companies don't allow credit card payments, go use your cards to purchase money orders, which you can then use to pay the bills.
If you are seeking credit--for example, a mortgage or car loan-- make sure that your applications are done all around the same date.
Every inquiry counts against your credit score, but those that are done within a few days of each other are usually assumed to be for the same purpose. That block of inquiries is counted as a single inquiry against your credit score. If you inquire with different banks over a period of time--say a month--each inquiry will usually be counted individually against your score.
Dispute negative items on your credit report! Experian now makes it easy, especially if you have recently been denied credit. Go to the Experian website, enter the info (including the name of the company that denied you), and they let you see your report online at no charge. You can examine negative items and dispute them for a number of reasons. Experian will investigate, and remove any items that cannot be verified. Don't forget to dispute invalid former addresses, names or social security numbers, as too many of these make it look like your situation is instable, or that you are trying to commit fraud.**Please note that many, many companies are unable to prove the negative item due to their own negligence in storing information. You can substantially improve your score within 30-45 days by taking a few minutes to check your report now.
DO NOT immediately close any accounts you don't want or don't use. For some reason, this is counted as a negative against you. So is failing to use the account. Consider using the account to pay bills, maintaining a small balance as discussed above. You may also want to investigate requesting a reduction in your credit limit, though this may appear as a negative on your report. If it does, you can add a statement to your report that the reduction was at your request, but it may still affect your score.
Ask, ask, ASK! If your credit card company raises your rates or slaps you with fees, call them, POLITELY ask for their name and position, and POLITELY request a supervisor. Politeness is key; people are more likely to want to help you if you are nice to them, so kill them with kindness! Ask that they lower your rate, ask that they remove the fees, and as a last resort, request that the negative report be rescinded from the credit bureau; in other words, agree to the increase and fees if they won't take them off, but request that they report that everything is fine and nothing has changed to the bureau.
Pay off old debts. It's better to pay them than to have them listed as a chargeoff or late. Be aware that they will disappear on their own after 7 years of no activity (10 years for bankruptcies), so don't go paying that one if it's about to expire anyway; it will do nothing for your score. If you negotiate a smaller amount, BE CERTAIN to make them agree to list the account as "paid in full". Get it in writing BEFORE you pay them anything. That way, if they list the account as anything else, you can send a copy to the credit bureau, who will make the adjustment. You don't want it reported that you paid less than the full amount, because it WILL count against your score.
A lot of people seem to be interested in this. In the next few days, I will try to post a sample letter on my blog that people can send to their elected officials. The letter will outline the situation with unfair practices of credit card companies, and request that changes be made in the laws to protect consumers. To read the letter, post your situation or to suggest items that should be included or proposed changes to current law, click on my name under this post.
It's a pretty sure thing that nothing will be changed if no one speaks up. If you want change, take action by writing to or calling your elected officials. You can find contact info for your representatives and the President at
www.usa.gov/Contact/Elected.shtml