Help for when interest charges take your credit line over limit and they add on ourtrageous overlimit fee?
Fees tacked upon fees. You know the game. Anything the credit card company can do to multiply the pain…all for their own gain.
I believe there may be some credit laws which can come into play here…where the credit card company is just going overboard with how many fees they pile onto your account until you don’t know what they are going to do to you next.
Are there any rules…perhaps under the Uniform Commercial Code….which protect the consumer from the likes of these vultures who slap on outrageous interest rates and trip you up with interest charges that push your account over the limit, then they try to collect from you twice with an outrageous overlimit fee and then a late charge fee if you are 1 day late?
Are the credit card companies out of control with all their fees upon fees these days? What can a person do?
The criticism that credit card companies would not do what they are doing unless it was 100% legal…is totally wrong. Abusive lending practices abound and there is legislation in process to stem the tide of many of these practices.
Do not make the assumption that I ask this question on my own behalf. I am a corporate lender of 20 years and am well versed in corporate lending, contracts that are hundreds of pages long, and many other issues as it pertains to fees, interest rates, projections, terms and conditions, covenants, defaults, accelerations, waivers, amendments, and workout. This is a question as it pertains to CONSUMER law which is different than CORPORATE lending. Please do not insult the Asker or make assumptions with regard to my own personal credit. I am working with legislators to help remedy abusive practices and thought I might tap into any expert advice, if it can be found in this forum which based on the initial response, looks doubtful. Mostly smart alecs here
I hate to say this but it is completely legal. As for the people saying it is yours or whomever’s fault, that can be true but not always. I worked in the credit industry doing collections for over 10 years. During that time I often saw the following scenario.
Customer Joe has a $10,000 line of credit. Customer Joe sends XXX company a check for $3,000. XXX posts Joe’s check and notices that his FICO has dropped a bit or something else flags them. They lower his line of credit that very same day by $3000. Meanwhile Customer Joe, thinking he just paid $3000 makes a purchase for $1000 and even though it puts him over his limit, it is allowed to go through. Then, 2 days later, Customer Joe gets the letter notifying him his line of credit was decreased. There is nothing he can do. The fees, etc are all legitimate. His only hope is to hurry and pay back that $1000. If you read the fine print you can have your limit changed at any time. I actually called a customer once that had a $6000 balance on a $2500 limit.
Next scenario: customer makes a charge expecting if they were over their limit they would be declined but the company allows it to go through "as a courtesy" and then charges fees.
The companies do have it set up to their advantage which is why I tell everyone do not get credit cards. Even closing your account won’t stop any fees. The best thing to do is to transfer your balance somewhere else but I know that is usually a pipe dream because people maxed out tend to be maxed out on all cards not just one.
I understand your frustration but it is sort of like being surprised and mad that crocodile bites you when you stick your arm in his cage.
A person can cancel all their cards and not play the game.
Dont worship at the alter of the almighty fico score. all you get for your trouble is debt.
References :
Once again a person that is whining about the credit card companies doing exactly what they told you they would do based on your actions.
It’s called terms and conditions, you did read and understand them before you accepted the credit card right?
When you max out credit cards and then add interest of course you go over your limit. This is simple math and should not be hard to understand.
There is no one responsible for this except the person looking back at you from the mirror.
This is one of several reasons that I never charge more then I can write a check for when the bill comes due every month.
Sorry, don’t mean to rant but sometimes these types of questions just get to me.
References :
Finance Manager for over 7-years.
I believe the obvious answer to this is that the legal departments of the credit card companies would not let them do anything that was not legal.
Spifiman is correct, you have no one to blame but yourself.
References :
Dad is in finance.
I hate to say this but it is completely legal. As for the people saying it is yours or whomever’s fault, that can be true but not always. I worked in the credit industry doing collections for over 10 years. During that time I often saw the following scenario.
Customer Joe has a $10,000 line of credit. Customer Joe sends XXX company a check for $3,000. XXX posts Joe’s check and notices that his FICO has dropped a bit or something else flags them. They lower his line of credit that very same day by $3000. Meanwhile Customer Joe, thinking he just paid $3000 makes a purchase for $1000 and even though it puts him over his limit, it is allowed to go through. Then, 2 days later, Customer Joe gets the letter notifying him his line of credit was decreased. There is nothing he can do. The fees, etc are all legitimate. His only hope is to hurry and pay back that $1000. If you read the fine print you can have your limit changed at any time. I actually called a customer once that had a $6000 balance on a $2500 limit.
Next scenario: customer makes a charge expecting if they were over their limit they would be declined but the company allows it to go through "as a courtesy" and then charges fees.
The companies do have it set up to their advantage which is why I tell everyone do not get credit cards. Even closing your account won’t stop any fees. The best thing to do is to transfer your balance somewhere else but I know that is usually a pipe dream because people maxed out tend to be maxed out on all cards not just one.
I understand your frustration but it is sort of like being surprised and mad that crocodile bites you when you stick your arm in his cage.
References :
Well what did you expect from your first post? If you had given all of this information up front the answers might have been more to your liking.
But based on your first post, I agree with Spifiman, weather you like him or not, he speaks the truth.
People that are not smart enough to read and understand the terms and conditions before they accept the cards are doomed to fail.
I go through this in my job all the time, people come in whining about things and I pull out their contract and show them where it says we can do exactly what we are doing.
Once again, stupid people that do stupid things have no one to blame but themselves.
References :
Property Manager.