Wildncrazy

This last week on Boston Legal they had a credit card case and outlined many of the ways credit card companies are out to get you. It was an eye opening show.

Now that the states don't have usury limits and the credit card companies have huge lobbies the credit card industry has changed in ways I wasn't aware of and I am in the finance industry.

It made me relook at my credit cards and I found that my Capital One business cards were worse than the industry leading worse creditor Citi Bank.

I made a trial customer service call and was surprised to reach India so let's add that to long list of issues. I checked my initial agreement and then went online and found that a completely different agreement was now in effect and for any 2 instances of "rule breaking" in a 6 month period I could end up with a 27+% interest rate. (Citi's is 30+%)

So what's rule breaking? Here are a couple of examples: A payment that is received on time, but not before the due date. So you've broken a rule even if you aren't late.

They also no longer raise your credit limit based upon usage or payment history, you have to request it. If you should exceed limits then they can add an over-balance fee of $39.

There are a host of others but those 2 caught my eye because they would be the ones most easily broken by most people. I am used to credit limits being raised automatically by the credit card companies. I have cards with 6 figure credit limits that I have never owed more than $5,000 to. So if you go over your limit by $1 at Christmas time it might trigger a 27+% interest rate.

If you can read quickly enough in the commercials for American Express Blue Sky cards you can see they seem to have a normal rate of as high as 28%. Most of the others seem to have a normal rate of up to 22+%. These rates aren't their bad rates, just what everyday users can expect based upon unknowing infractions of the credit card company's rules or future agreement changes. I thought it was only an agreement if both parties agreed. Now you "agreed" to let them change the terms and conditions without notifying you.

So they can change the terms indescriminently and the agreement you signed when you took out the card can, and usually is, replaced soon thereafter with something entirely different.

With all that said does anyone know of any business credit cards with decent terms or know of a research site I can visit?

thatguyjosh

I've learned that if you are responsible and pay your bills on time you will be treated great by MOST credit card companies. (Crap One is an exception) I have 4-5 cards.. always keep my balances low (3-4% utilization), always pay 5-8 days before the due date and every company has lowered my APR by at least 5-8% and tripled my credit limit since I opened them.

The big thing to watch out for is universal rate jacking. If you make a late payment to your Chase card (if you have one, just an example) then every single one of your other card companies can rate jack you up to 28-30% and cancel any special deals you have going on, like 0% on purchase or 0% balance transfers. They can also do this if you go over your limit on any card.. kinda scary.

I'm a nerd.. I like reading up on credit cards, credit ratings, etc. Here's a GREAT forum to check out, www.creditboards.com . Lots of great stuff to read about.. especially the pros and cons of new cards that are coming.

mxt_77

As for the automatic credit limit increases... I've never requested a limit increase on my Citibank card and in the 10 years that I've had it, my limit has gone from $500 to well over $10K.

I dunno. As for the other stuff... yeah, I was aware that they could jack up your interest rates, and that a default on one could affect the others... so just don't screw up your payments. I've had a couple of payments that were late (when I was in college and money was really tight), but they never hit my credit report because I called them and worked through it.

Wildncrazy

It doesn't take a default on another credit card to get your rates bumped. Citi can bump your rate to the maximum and up your annual fee (or give you an annual fee if you don't already have one) if you have one 30 day on any type of account.

What I have only recently become aware of is that the old rules don't apply anymore. I have always gotten automatic credit limit increases and my rates have always dropped, but not any longer. They are changing the way they do business, or at least all of the big companies are, and they arent' doing that anymore.

I just read the rules on AE, CITI, Cap One, & Advanta and it is scary what they can do to you. I had seen a couple of articles on TV talking about how they hid the rules or made them hard to understand in order to jack your rates up or to charge you fees which is in effect jacking your rates up, but I thought it was just for the deadbeats so I wouldn't have to worry.

I have found out deadbeat to the credit card companies is the guy who pays the balance off. They are changing the rules to get more money out of that person.

I'll check creditboards.com and hope it shows me good companies I can give my business to before I get the business from Cap One.

We own a mortgage company and coinicidentally I had a customer last month who had an erroneous 30 day late show up on his credit at the last minute and we had to take the house note out of his name and put it in his wife's. He could no longer qualify for the house loan he wanted. Now I see he is going to be hit with higher payments on his credit cards as well. We'll help him get this off his credit but once it's gone will the credit card companies lower his rate again? Probably not. Cap One only looks at removing "sanctions" after 6 months.

thatguyjosh

If Crap One rate jacked him.. I'd find it VERY hard to believe he would get any kind of lower rate for a LONG time. Best thing to do is always keep your options open.. save those low rate balance transfer checks your CC companies send you sometimes. If one of your card companies rate jack you for no reason, just do a balance transfer and sockdrawer the card for 9-12 months. See how much they like collecting absolutely no money from you for a year.

I did that with my Chase card (had $2K balance.. transferred to 2.9% offer with Wells Fargo card) and Chase called me up a week later and offered me 0% for 12 months and a credit limit increase.

Wildncrazy

How do you like Wells Fargo? Do they have all the gotchas? I haven't read their terms yet but they are one of the ones I was going to check into.

Keep in mind I am looking for a business card and they sometimes work differently than personal accounts.

Just heard on the news that Channel 11 will be giving you the low down on no late fee cards Tuesday night @ 10.

What I know about no late fee cards is that they have higher rates and more fees, or at least that's what cardratings.com says.

thatguyjosh

Wells Fargo has been really good to me. But keep in mind I only have a personal account with them. Post a topic on creditboards, you should get some good responses. I've heard some great things about Amex business accounts.. ever worked with them?

QUIKAG

I only deal with institutions that I work with on a regular basis. My Visa card is through my credit union and they are awesome. I have a Mastercard through USAA who also has my insurance and some savings business of mine. Finally, I have a GM Card who has been pretty responsive, but I'm not using that card much anymore. The 5% towards any GM car on purchases (pay it off every month) has served me well in the past with my Vette and truck purchases.

I am a deadbeat as Wildncrazy mentioned as far as the credit card companies are concerned. I do not carry a balance. I actually have never carried a balance. I just flat don't buy anything I can't afford to pay off the next billing cycle.

cdelena

Credit cards are only a problem when the customer doesn't read the agreement and manage their fiances to avoid the charges. The card companies may target those that make them the most but it seems to me that the rules are followed and disclosures are always available. I have used credit cards to my advantage for over thirty years without paying interest or penalties so it has been nothing but great for me. I have never understood the popularity of debit cards (I always use credit) or making CC payments (borrowing is always cheaper elsewhere).

I think it is unfortunate that the Boston Legal producers have taken what was a very entertaining show and mucked it up with their agenda.. If I wanted contentious subjects I would have tuned elsewhere. My wife and I have deleted Boston Legal (Tivo) episodes more than once lately when we were turned off with their less than accurate political content.

Elistan

My view on credit cards is that if you use them responsibly for convenience, it doesn't matter what the interest rate is. Your only worry is from them doing something dishonest like holding your payment in order to charge a late fee (I don't recall which company was doing that, but it was a couple years ago?) or other such underhanded practices.

Given that, there are two primary factors to look for - customer service, minimal annual fee, and the best rewards program.

Several of my friends have the AAdvantage card that's linked to their frequent flyer account with American Airlines. They fly/spend enough to get free tickets now and then and come out on top, despite the $45 or so annual fee. I don't travel enough, so I have a points card with no fee, for which I can get merchandise/services/1% cash back after enough points. Something that offers bonus double/triple/whatever points/miles is nice as well.

Regarding customer service, another friend had a charge show up that turned out to be a service for $$$$$$ site operates to increase web traffic. Definitely not his, but when he called his credit card company they were giving him a hard time about "Are you sure that's not your charge?" and "You'll have to contact the vendor." What a PITA. Some (all?) companies monitor for fraudulent activity as best they can, and I know some people get annoyed if they're using the car legitimately but unusually, and it gets temporarily suspended until the bank can verify things. I, on the other hand, recently got a new card number because somebody tried to charge only $1000 worth of Wal-Mart gift cards - the transaction was immediately denied and never went through. My card also has a nice feature of being able to generate temporary numbers that link back to my main account - any only purchase I do uses a number that's valid for only the amount I specify, and I close them down as soon as the transaction is done. So I don't care if some clearing house's database gets hacked. (Of course, in-person uses of the card are still susceptible to the number getting recorded.) Other features like fee on-line bill-pay can be nice as well, year-end summaries, etc. etc.

If, however, you're using credit cards to live beyond your means by racking up debt you cannot pay off, interest rate and the rules that govern them are of prime (no pun intended ) importance. Universal default, penalties, fees, service charges, etc. etc. Yuck.

The credit card market is getting pretty much saturated here in the US. Anybody who wants a card, most likely has several. The only way for the companies to grow their profits is to entice other customers with stuff like 0% APR (which means they need to increase prices elsewhere in order to make up the difference) or purchase portfolios from other companies or consolidate with other financial institutions and do cross-marketing. With the market the way it is, I don't see the credit companies deciding to make it any easier on consumers for any reason other than being forced to through legislation, and given the example of the recent bankruptcy bill I don't see that happening.