Archive for the 'bankwatch' Category



More switching to credit unions

This month, when Sarah Vainer applied for a preapproved auto loan, U.S. Bank demanded a mortgage-like mound of paperwork, including copies of her current auto lease and past lease payments, and asked what type of car she’d buy.

“What’s the purpose of a preapproval?” Vainer recalls thinking at the time. “This is completely insane.”

She left and this week joined USAgencies Credit Union in Portland. An overreaction? Not when you consider the credit union has already preapproved Vainer for a loan. Or that the Vainers have great credit, which Sarah feels obligated to have, given her job: tax collector for the Internal Revenue Service.

Or that she once worked for U.S. Bank, where she helped manage a branch and took car-loan applications.

“It made me feel like some kind of delinquent,” she says of the bank’s inquiries.

This from Oregon Live, who reports that credit unions are growing thanks to a backlash against big banks and they way they treat their customers.

We say: welcome to a financial institution where the grass really is greener.

Big bank balance transfer rates going up

Bad news if you play the credit card balance transfer game, says MSN Money:

In July, JPMorgan Chase, the largest credit card issuer in the country, cited the new federal regulations when it sent letters to its customers informing them that the bank will increase its maximum balance transfer fee to 5% — the highest charged by any issuer. Subsequently, the company stopped including balance transfers in most of its new offers.

…Bank of America – the second-largest issuer – has increased its maximum balance transfer fee to 4%…The standard balance transfer fee had been about 3% – and some issuers also limited the total fee, often to less than $100, with caps.

From the research we’ve done, most big bank credit card issuers charge some sort of balance transfer rate on top of the regular rate for each transaction total.

American 1? We don’t charge any balance transfer fee.

WSJ: Banks roll out new fees

The Wall Street Journal reports that banks are finding inventive and creative ways to charge their customers more fees:

Credit-card companies already have been racing to slip new fees and practices into customer contracts ahead of the [Credit CARD Act]. Issuers are closing accounts, switching cards with fixed interest rates to variable rates and introducing cards that have an annual fee…The changes come against a backdrop of rising anger at the nation’s banks—having been largely supported by hundreds of billions of public bailout dollars in late 2008 and 2009.

This is mostly a result of the Credit CARD Act, passed and signed earlier this summer, which puts limits on bank credit card policies and puts a $50 billion hole in banks’ revenue.

Banks will attempt to fill that hole by charging new fees, or resurrecting long-neglected fees. So beware.

Exposed: debunking the Visa Black Card

Visa Black Card

Maybe you received one of those slick black envelopes in the mail, with an “Invitation Enclosed” message and promises of limited membership and benefits.

This is what the Visa Black Card, fresh from London, England, tries to sell you. But we’re here to tell you it’s not worth it.

We got our hands on one of these “exclusive” invitations thanks to an American 1 member. Put together in fancy packaging, the Visa Black Card mailing says it comes with limited availability, special “luxury” gifts, and a carbon – not plastic! – credit card that will make your dreams come true. It claims, as you can see above, to provide a yacht-club-style membership.

The reality is, when you dig into the details, this card could cost you. Big time.

Visa Black annual fee

First, there’s an annual fee. And it’s a whopper. Almost $500 every year you use this card. Maybe because it’s steered toward the luxury market, the folks at Black Card (actually, a British bank called Barclays which is no stranger to controversy) think a $500 annual fee is nothing.

We think it’s crazy.

Then there are the other fees. If you’re late on a payment, go over your credit limit, make a payment that is returned, or “do any of the above on another account” you have with the fine folks at Black Card – zoom, your rate jumps above 30%.

Those feelings of exclusivity? Hope it’s worth it.

There are other fees, like a cash advance fee, balance transfer fee, and a $2 minimum interest charge, that add up to luxury-style costs. With this card, you won’t feel luxurious for very long.

The Visa Black Card only appears to give you a limited lifestyle. Add it all up, and you need to be fabulously wealthy just to afford this card.

For more in-depth credit card research, visit our Top Secret Visa site, and catch a glimpse of our Visa philosophy at WeUnderstand.org.

Credit CARD Act roundup

There’s been lots in the news now that the Credit CARD Act is hitting financial institutions.

More often than not, however, big banks are the ones doing the hitting – especially with their customer’s wallets.

Here’s a quick roundup of the latest news about big bank credit card practices and what they mean for you.

Credit Card Fees; the new trap (Wall Street Journal): “Banning these and other profitable tactics is expected to cost the card industry at least $12 billion a year in lost revenue, according to law firm Morrison & Foerster. This has sent the industry scrambling to find new sources of revenue. So get ready for higher annual fees, higher balance-transfer charges, and growing charges for overseas transactions.”

It’s a new day for credit cards (WSJ): “Annual and application fees cannot exceed 25% of your credit limit. But don’t get fooled by them. They can represent another form of interest on your account.”

Mixed blessing: credit card reform may shock some (Mlive.com / AP): “During the past nine months, credit card companies jacked up interest rates, created new fees and cut credit lines.”

Remember that American 1 has not participated in the harmful practices, like annual fees, that big banks are bringing back.

To learn what we think of all this, visit WeUnderstand.org and let us know how YOU feel about the new Credit CARD Act.

Citi adds $60 annual fee

Citi's annual fee

Bad news if you’re a Citi credit card customer, says Connecticut Watchdog:

Many Citi cardholders are receiving letters about a $60 annual fee that is being added to their account effective April 1, 2010. If consumers make $2,400 in purchases during the year, then the annual fee will be credited back to their account.

It appears that Citi’s test of adding an annual fee to a small percentage of their customers in August of 2009 proved successful for the issuer. At that time, Citi began charging some cardholders an annual fee of $30 to $90 unless they spent at least $2,400 per year. Now a far greater number of customers are receiving this notice.

A representative from Citi says they’re imposing the hefty annual fee to “maintain the quality of our service amid the rising cost of doing business.”

So they mess up the economy, and you pay. Get it?

I first saw this on a Simple Dollar post, where a long-time Citi customer got the same letter, despite his years of loyalty. You can read the full letter at the Consumerist blog.

Is that any way to treat your customers?

We treat our members a little differently. To get our perspective, visit WeUnderstand.org and let us know what YOU think of all this annual fee nonsense.

Bank of America pays more bonuses

If you haven’t heard, now that Bank of America has repaid the government for its bailout, its sending plenty of bonuses to its bankers.

The blog 24/7 Wallstreet reports:

Bank of America will also pass out handsome bonuses to its bankers, just a few months after its repaid the government $45 billion in aid that it got to stay in business through the credit crisis. The Wall Street Journal reports that the bonus pool at B of A will be more than $4 billion. Traders will collect an average of $300,000 to $500,000, according to the paper.

The bonuses are a return to 2006 levels, says the New York Times.

So if you’re a Bank of America customer or credit card holder, you’re helping to reward the bankers who played fast and loose with your money.

Man vs. Bank: the commercial

Check it out: you’ll soon be able to see our “Man vs. Bank” video on a Comcast commercial near you!

The wild, wild west of the credit card world

PBS’s Frontline ran a special called “The Card Game” in November on how the credit card industry hurts customers with exhorbitant fees and interest rates.

Watch the second part, especially, to get an idea of what every day consumers face with rising costs.

Good advice: Move Your Money

Laurent Belsie of the Christian Science Monitor has a bit of good advice regarding big banks:

Take your money out. That’s right. Take your checking and savings account out of that big money-center financial institution and move it to a community bank or credit union.

There’s even a movement afoot to help consumers make the switch, called Move Your Money, with a well-timed message and a good video.

Move Your Money is a project from the Huffington Post, Institutional Risk Analysis (IRA), and the Roosevelt Institute, says Salon.com.

Move Your Money’s objective? Simple: move your money out of the big, out-of-town banks and put it into a local financial institution. They’ll even help you find one.

The project has received media attention since its launch, which is timely considering all the bailouts and credit card shenanigans big banks are involved in.

Check out the video, which uses “It’s a Wonderful Life” to make a good point about big, out-of-touch banks and how they can affect everyday Americans.


American 1 Federal Credit Union