Posts Tagged 'credit'

AmEx Centurion and BoA Accolades card: exclusive, expensive

American Express’s Centurion card is a coveted item by celebrities and regular Joes and Janes alike. But that exclusive access comes with a pricetag: a $2,500 annual fee.

Now Bank of America is getting in on the act with its Accolades Card. To get one, just have $200,000 at Bank of America.

Easy enough, right?

The key to making money on these cards in the transaction fees, says Forbes.com’s Liz Foyer:

Cards are an obvious way into the market, and though lenders aren’t going to make much in the way of late fees and interest charges (assuming rich people pay their bills on time and in full, which isn’t always the case) they make up for it in the fees they charge to merchants to process transactions. American Express network transactions mean fees of about 4% each purchase, so a $60,000 car charged to a Black Amex could potentially rake in $2,400 in processing revenue.

Unlike the Barclay’s Black Card, these cards really are offered to exclusive individuals – either the super rich or the super well-known.

For every day people like you and me, try a card that’s more down to Earth.

Advertisements

‘Phishy Home’ video from OnGuard

OnGuard Online, the federal government’s hub for identity theft information, has a few fun videos – all with situations you’ve probably seen before.

The above video, called “Phishy Home,” shows what happens when phishers try to grab your personal credit card information. OnGuard provides a list of articles on the different types of identity theft tactics.

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.

NYT: Banks put squeeze on credit card customers

Ahead of the new Credit CARD Act, the New York Times reports sobering news on bank credit card practices:

About 50 percent of the banks responding to the Fed’s survey said they were increasing interest rates and reducing credit lines on borrowers with good credit scores. About 40 percent said they were imposing higher fees. The banks also said they were demanding higher minimum credit scores and tightening other requirements.

…A study by the Pew Charitable Trusts, released late last month, concluded that the 12 largest banks, issuing more than 80 percent of the credit cards, were continuing to use practices that the Fed concluded were “unfair or deceptive” and that in many instances had been outlawed by Congress.

Consider all this a last-ditch effort by big banks to get your money – before the CARD Act stops them from these deceptive and gouging practices.

Credit card annual fee? Not at a credit union

USA Today reports that many banks are bringing back the ol’ annual fee dinosaur in response to the Credit CARD Act.

If you don’t want an annual fee on your card, writes Sandra Block, go with the not-for-profit option:

If you don’t care about rewards and just want a credit card that doesn’t charge an annual fee, consider applying for a card through a credit union. Many credit union cards charge no annual fee and offer below-average interest rates.

Block has just one thing wrong: American 1 offers ScoreCard rewards, which can earn you travel and gift rewards.

Through the rest of the article, however, Block gives options if your big bank credit card starts charging an annual fee or reducing reward programs.

Exposed: American Express raises fees

amexfees

One of our employees here at the credit union received this letter from American Express informing them that – guess what? – AmEx is raising rates and fees.

Big surprise, right? We’ve seen this before.

AmEx calls it a “price change notification,” which translates as “you’re going to pay more to use an American Express card.” For example, our American 1 employee will pay prime rate plus 21.99% APR on any cash advances, which – as of today – equals 25.24%. Here at American 1, our cash advance rate is the same as our everyday Visa rate.

This letter is another example of big bank credit card companies raising their fees and interest rates to bail themselves out of the mess they got themselves into. And you pay the price for their mistakes.

For more information on big bank credit cards, visit our Top Secret Visa site.

Big banks raise credit card fees ahead of law

Big banks are trying to beat the new Credit Card Accountability, Responsibility and Disclosure Act, which means more bad news for big bank credit card holders, according to the Washington Post:

Chase, for instance, will raise the minimum payment required of some of its customers from 2 percent to 5 percent of the statement balance starting in August. Chase and Discover have increased the maximum fee charged for transferring a balance to the card to 5 percent of the amount, up from 3 and 4 percent, respectively. Bank of America last month raised the transaction fee for balance transfers and cash advances from 3 to 4 percent. Card issuers including Bank of America and Citi also continue to cut limits and hike up rates, which they have been doing with more frequency since January.

Banks blame everything from decreasing credit scores to the “additional increases in the cost of credit.”

Some in Congress are fighting the rate and fee hikes, so stay tuned.

…and just a note, American 1 doesn’t charge for balance transfers.