Credit Card Companies are NOT your friend!
Why Credit card companies are not my or your friend.
When you have no control over your own credit score, when your "makes payments on time" is at least 3 years old, they will find a way to either deny you credit or charge you the higher interest rate. Read on for things that the credit card companies have done to me.`
Issue #1: I recently received a notification that my Old Navy Credit Card was closed. "What?" I didn't close the account ~ so what happened? The credit card company gave me the excuse "lack of activity" and closed the card! Well, I didn't use it often, and when I did I always paid it in full ~ so I decided that it wasn't a big deal.
Issue #2: A couple of weeks go by and I suddenly got another notification from Credit Karma, that my Ulta Credit Card was closed due to lack of activity! What? Now, I most definitely did not close that account! I also used that account like Old Navy's ~ where I paid the account in full at the end of the month.
Issue #3: Barclay, my Apple credit card - I had applied to get the credit, totally taking advantage of the promo (18 months no interest/finance charges if paid in full) but with the pandemic, I decided that this was not a good time to purchase that IMAC that I so wanted! So, because I did not take advantage of the promo during the specific period Barclay decided to close that account! Yep, you guessed it! "Due to lack of activity!"
Issue #4: I have an American Express Credit Card with a low-interest rate. I make my payments on time, always more than the minimum payment. For some reason, they have been checking my credit report every few months and based on what they decide is an issue, they lower my credit limit. They have done this three times now! I called them after the 1st time and talked with their customer service.
I was assured that this was standard procedure - periodically, they check all accounts. This isn't a new card. I have been a good paying card member for 4 years now. After the 3rd time (the pandemic) I had enough. I called to ask what was going on. My balance owing was continually decreasing, I wasn't using the card, but every time they lowered my credit limit my credit score would go down a few points! I cancelled the account.
Judy's Credit Recommendations:
- Do not answer any mail from a credit card solicitor. Their interest rates are astronomical! They will charge you between 26 & 29% interest rates! The promotional period, 12-18 months, no interest is the hook. Your interest will still accrue. Remember, you will be charged one lump sum if you do not pay off the amount owed before the promotional period is up.
- Care Credit ~ the card that will help to pay your medical, dental, or vet bills. Dental insurance, even with it, it doesn't cover everything, so I applied for a Care Credit Card. Yep. I was approved. At 26% interest rate! Needless to say, I am canceling that card! There isn't any way that I will pay that kind of interest rate.
- You are told your credit score is one of the most important things to maintain. Making your payments on time, or paying things off, won't matter if your income has been reduced. They don't care about the reasoning, (pandemic) What they care about is finding the excuse they need to either charge you a higher interest rate or deny you altogether.
Credit Unions are your friend. Usually, Credit Unions are more forgiving, they don't look at you as a number, but as a person and they will negotiate for you. I have had nothing but success and assistance from my Schools Credit Union. I have been a member for years now. They are reasonable, charge lower interest rates and truly care about helping you with your loan needs.
Words of advice here for all of you:
- Link to the latest Credit Card Interest Rates & Explanations
- Always, always read the fine print. Don't feel rushed.
- Do not take the sales person's word for anything. (Unless you personally know this person)
- Big banks are not your friend.
- Research different credit unions ~ they are your friend, have the best rates, and work well with the little guy.
- Join Credit Karma - there isn't any charge. They review your credit, showcase your FICO score, and give you info on how to help your credit improve.
- Wallet Hub - a great resource - concern yourself with the interest rates ~ if you are unemployed, your income has shrunk. Words of advice? Your credit is already in the dump - just do what you can and concentrate on paying the essentials only.
Like I said in the beginning. Credit Card Companies are not your friend!