What is Digg?85 Comments
- nixonrichard, on 10/12/2007, -2/+44That's right, it's "sensible" to send someone a letter saying they will be fined $20 for having a positive balance rather than just send them a letter with a check attached for the positive balance amount.
- johnnyrotten, on 10/12/2007, -0/+20Wait a minute. Didn't MBNA get bought by Bank of America?
- sTiVo, on 10/12/2007, -6/+20Can you be in "Credit"? I''ve never heard that term used that way before and I took three semesters of Finance.
- zweben, on 10/12/2007, -3/+16It's probably a british thing.
- jimbouk, on 10/12/2007, -1/+11in the uk, a "credit" balance at the bank is positive and a "debit" balance is overdrawn. think about it from the bank's point of view... you are a creditor.
- nogami, on 10/12/2007, -0/+8If any of my banks tried this crap, I'd be slicing up my credit cards, closing my accounts and changing companies within a day.
I occasionally over-pay a credit card by a couple dollars because otherwise a stray interest charge can cause the charges to start accumulating again. If I need to pay $250, I might pay $255 just to make sure it's slightly positive and that I'm not going to get any extra charges.
Which is exactly what it sounds like this bank wants to eliminate customers doing. - signal15, on 10/12/2007, -0/+7Yep, and they are both a bunch of shady bastards. I implore you to look elsewhere if you are considering applying for a credit card. They have ***** me 6 ways till sunday with random fees and raising the rate of my 7.9% "for life" APR to 23.9%. Their reason for raising my rate... My debt to income ratio is worse that it was when I got the card. It's worse on paper because it's a rental property and they don't consider that the income from it pays for it. They run your credit every 3 months to look for reasons to raise your rate. They are a bunch of *****.
- Psych77, on 10/12/2007, -0/+6Well since this is a British newspaper, reporting about a British story, with a British person using a British credit card in Britain, I can't imagine the DHS needs to know anything.
Oh, sorry, it's on the internet, therefore MUST be American.... - dirkdee, on 10/12/2007, -3/+8You might want to read the article again ( or maybe for the first time) She says she had closed the account and hadn't used the card for a couple of years hence her surprise when she received the notice about the credit balance and the fee.
- jm1234567890, on 10/12/2007, -0/+5I was charged once when I accidentally payed too much in the credit card bil payment :( it was only 1 dollar over!!
I don't think this is limited to one company. - Wolfboy, on 10/12/2007, -0/+5Well, yes, but keep in mind:
To lend money, banks need money.
If you overpay your account, and therefore have a credit, of, say, $1, that's $1 that the bank has that it would not otherwise... you have lent $1 to the bank. The bank can take that $1 and lend it to someone else.
When someone borrows that $1 from the bank via a credit card, the bank typically charges a high rate - 18, 24, sometimes 36 percent interest.
But when you overpay the bank, essentially lending them your money, they pay you zero interest.
And now the banks want you to pay them when you lend them your money via overpayment. - JavertHolmes, on 10/12/2007, -0/+4I overpay all the time. I'll be by a bank machine, remember that I'll have to make a payment soon, won't remember the exact amount, but will round up to the nearest $10 of what I roughly remember it being and overpay to not have to pay interest.
I don't get any warning letters or cheques in the mail. I just show a credit on my statement until I spend money on the card again. I'm not really sure what's wrong with other CC companies doing it this way. Frankly, I'd change CC companies if they wanted to ding me for it. - headco10, on 10/12/2007, -0/+3JPMorgan Chase Bank [Sears Mastercard] does this as well... i think its only if you dont use your card for a certain amount of time and the balance is credit. Its a load of horse ***** either way.
- BevansDesign, on 10/12/2007, -0/+3Yup. Here in America, at least.
- Darel99, on 10/12/2007, -0/+3If enough people cancel their cards due to this reason they will change the policy.... They want until the people revolt
- kd1s, on 10/12/2007, -0/+3Damned banks. They're completely out of control lately. Here's a perfect example, I have an account with Sovereign. I like them, they're still small enough that they're not completely asinine about identity requirements (BofA wants to see an ID and credit card, doh, what if you don't have a credit card) and their customer service is damned good.
But if I deposit a check drawn on BofA in my Sovereign account I can't even split it, you know, get say $100 or so cash and deposit the rest. They insist on holding it for a day. I find it interesting that a supermarket can demand draft money out of my account when I write a check, but a bank can't do the same to another bank.
I know that Sovereign is playing with the one day of float time. That check goes in and before midnight that night, the money is in their electronic vault. So they have it, they're just holding it to play with the interest. Nice of them.
The thing is, we all get nickel and dimed to death. But we're rapidly approaching a time when enough will have been enough and we might actually ask federal regulators to step back in and clamp down on all the banks. It's coming sooner than you think. - inactive, on 10/12/2007, -0/+3I'm pissed at reading this like every else, but credit card companies make their money by lending money and collecting interest.
Somebody has to pay the expense of moving funds around when you use a credit card.
If you use your credit card for convenience, rather than credit by paying off what you borrow before interest is accrued you are costing the credit card company money.
If you are responsible enough with your money not to really need credit, get a debit card. You can use a debit card in almost every way you can use a credit card, but the money comes straight out of your checking account. - Jonny0stars, on 10/12/2007, -1/+4Yet another reason to use a piggy bank
- JavertHolmes, on 10/12/2007, -1/+3Except for the fact that the article also states at the bottom:
"The fines are not a one-off penalty. MBNA describes the fee as a new "annual service charge" for accounts that have been in credit for more than 12 months."
Meaning your account could still be active during that 12 months (ie: you buy items on the CC monthly), but if it has a credit balance at the time each monthly statement is out for a year, you may still get dinged. The article doesn't specify either way. This would be my concern regardless of the woman's story. - siszam, on 10/12/2007, -1/+3If you play with snakes (credit cards) eventually you will be bitten. That shouldn't be a surprise. The borrower is slave to the lender. Don't expect a master to treat you fairly.
- jimbouk, on 10/12/2007, -2/+4hmm ok. maybe we'll drink some american beer instead?
or maybe not. - TheBigBad, on 10/12/2007, -2/+4@dirkdee
No, YOU may want to read the article again. She said she destroyed the card and THOUGHT the account was closed. Destroying the card does not send some sort of telepathic message to close the account. - mabhatter, on 10/12/2007, -0/+1And when the Feds do that it will be the poor that get hit for it. Remember last year at the same time as the new US Bankrupts rules were being decided, there was a bill going around Congress to also require credit card minimum balances to pay off the card in a reasonable time.. like 7 years if you didn't put more charges on it. The response from banks was that people wouldn't be able to afford to pay them off if the rules were changed... while at the same time decrying too many people for being "irresponsible" with their credit and changing the bankruptcy rules in the bank's favor... debt is a problem they like to have... because "honest" people will keep trying to pay their bills off and "almost" make it, then fall behind for more charges and higher rates... Example, my wife had a $400 card she got behind on for several times that..never used it again... as soon as she started paying it down to almost zero, they opened the account back up and charged it another almost double the limit in fees.... Granted, it's ENTIRELY the wife's fault for being lousy with her bills, but it's classic what the banks want for their customers...they've raked 5x the amount she borrowed and kept going. and why people can't seem to get out once they're buried. That's why people like Lawyers (for example I've actually heard this as a business plan) PLAN to go bankrupt and work in cash anyway for their cars and houses to keep them out while they don't pay for other stuff or off their business credit.
Back on topic, if the feds push for more "reasonable" bank rules it will always hurt the very people that need the breaks most. AT this point We're held hostage to what the bankers want or they'll bankrupt us all out of spite. - mitzip, on 10/12/2007, -0/+1C'mon guys, http://www.infowars.com was reporting on this over a week ago (Feb 21, 07) http://tinyurl.com/3x8hcw
IMHO, besides Digg, infowars.com is one of the best places to get your news.
Long live the internet! :-) - mabhatter, on 10/12/2007, -0/+1Correct!
When you have cash credit on the account, it's the BANK holding the money responsibility. Remember from other digg posts, the Credit card company isn't the one that eats chargebacks.... merchants do. There's a separate insurance that handles the product warranties... but they probably make merchants eat that too. But if you have a balance, that's just like a savings account that they have to insure nothing happens to ... And we all know bankers hate being responsible for things.
Some VP saw that closed accounts were carrying balances and saw an opportunity for some easy money. It brings to 0 balance accounts people aren't using anyway and saves on sending out bills as well as keeping track of active accounts. Remember, they're in the business to LOAN money, not keep it around. If your account doesn't have a balance you owe them, then you're not a good "mark" that they will potentially be able to get late charges, over limit, and all sorts of new fees from... you're a "cost" to the company. - mabhatter, on 10/12/2007, -0/+1but they're not talking about sending a check unless you request it. The "fraud" excuse goes out the window. If anything, their excuse for limiting "fraud" is due to the fact that that money is THEIR responsibility... normal chargebacks go to merchants not the credit card company... they NEVER lose money unless you don't pay. Like many posters have said, the "proper" way to use credit cards is to always be paid up.. sometime people err on the side of caution and pay a little extra to get the bill paid on time! Like all good things, they want to punish people for being responsible.
This is entirely a matter of convenience for the CC company. Note that they are not actually CLOSING the accounts, just wiping out the money they OWE you. The account is still open for somebody to use for fraudulent purposes. All they're doing is taking money they don't think you'll "miss". Which may be true, but shows how incredibly dishonest the industry has become.
As a side note, I'd love to see how many "billing errors" this new fee creates.. you know where they take all 10 pounds out when you only have 1 left... then start collecting interest and fees on the money you "forgot" about... wait for it.. check back in 6 months and you'll see just this happen!!! - pb3623, on 10/12/2007, -3/+4So let's hypothesize why someone would let a credit of even £1.05 remain on their credit card for 12 months. If you were so hell-bent on not calling Big Bank and requesting a refund check, then surely you could live with charging a quid between now and then...
Ever mail someone a check that they didn't cash for months? Plus, you've given the bank an interest-free loan. - smokeydbear, on 10/12/2007, -0/+1Credit card companies also make money off of the transactions (they charge people who accept visa/mastercard/whatever for the convenience of accepting those forms of payment) so even if you use your credit card as a charge card and pay off all charges within the grace period (ie, they make no money off of interest) they still make money as a percentage of the transaction itself.
- jabab, on 10/12/2007, -2/+3You've never had a good cuppa.
- satanatnmtedu, on 10/12/2007, -0/+1It is not true that the minimum payment is less than the accruing interest.
- justo, on 10/12/2007, -0/+1look at bankrate.com and compare your options. there are a lot, and i think credit card companies need to hear our protest by the choice of which card we carry in our wallet.
- vagarach, on 10/12/2007, -1/+2You need to learn some basic book-keeping. Like the double entry system etc. But then finance and book-keeping are two very different things :D.
- VicousT, on 10/12/2007, -0/+1MBNA doesn't exist anymore. They got bought out by Bank Of America last year, notorious for ***** nickel and diming tactics.
- SilenceIsFoo, on 10/12/2007, -0/+1Sounds about par for the course. Shortly after MBNA was eaten by Wachovia, I paid off my MBNA card balance, and they closed my account a couple of weeks later.
- basket548, on 10/12/2007, -0/+1In accounting terms, when a customer uses a credit card he is "debiting" his cash (gaining money), and "crediting" a liability - in this case, an account payable to the bank. The bank, on the other hand, credits cash and debits accounts receivable. So when a customer pays the bank back, the reverse happens on both sides. The customer "credits" too much of his cash - hence, being "in credit".
Personally, I would just say negative credit card balance... - olegk, on 10/12/2007, -0/+1What I never understood is how that works. Out of nowhere CC companies start charging for something new. Is that even legal? If it is, what's stopping them from charging $10000000000 instead of some pennies?
- bfire, on 10/12/2007, -2/+3First, even if you never carry a balance, card companies are still making money off of you from all the merchant fees they collect. Second, using a debit card is not a great idea. If someone were to steal your card and go on a shopping spree, that money goes straight out of your checking account. This has more repercussions and may be more of a headache to fix than if the money had came out of the credit card companies' pocket.
- fulldecent, on 10/12/2007, -1/+2I for one would gladly pay these fees, if I could also pay a 29% default rate on this negative amount.
- CdrUgly, on 10/12/2007, -0/+1I refuse to do business with Bank of America after their mortgage dept ***** me a while back. Thanks to all the diggers for alerting me to the merger, somehow I missed it.
I just got off the phone with MBNA here in the states and I was shocked at how easy it was to cancel. They didn't even ask me why or send me to the stupid retention department. They just closed it and I was on my merry way. - LoJack, on 10/12/2007, -0/+1"MBNA says it's doing this to protect people's money for them.."
Robbers are just protecting the banks' money for them too. - xeno314, on 10/12/2007, -0/+0Perhaps it is a good place to get news, except that infowars.com looks like a damned train wreck.
- gomezfreak, on 10/12/2007, -0/+0I use a credit card for one reason alone. Big purchases. Most debit cards have a daily limit on them anywhere from $400-$1000 a day. Try buying a big tv or a lawn tractor on your debit card, its likely to be declined even if the money is in the account because of the spending limit.
Besides most credit cards offer fraud protection and warranties on big purchases, so it usually a safer way to go. I AM one of those people who pay off the balance when it comes, because when you don't they certainly try to screw you as quick as they can. I've gotten a $40 late fee before when the payment posted on the same day as the due date, but it posted an hour after they were done "accepting" payments for the day. I don't understand how they are allowed to do that. When I pay my mortgage or light bill it says "pay by this date" and if your running a little behind one month (not that I do) it says "if after X/xx/XX pay this amount." And its usually about $15 not the ridiculous charges of a card.
If your payment date falls on or immediately after a federal holiday (4th, etc, etc) you better pay way before hand or you're *****. God I hate credit cards, but unfortunately you ***** need them for some things.
I will leave you with this thought,
You need credit to get credit, but when you no longer need credit, you will be penalized from any further credit, for canceling credit accounts. With ID theft like it is why is that even possible? - chase11209, on 10/12/2007, -0/+0This is just a tip of the iceberg. Credit providers will look fiercely for new ways to generate revenue. Especially now that lending procedures are being questioned & credit issuers face more defaults.
www.letsgobble.com - bkedersha, on 10/12/2007, -1/+1They are part of the Bank of Evil, I mean Bank of America. What do you expect?
- G-RaZoR, on 10/12/2007, -2/+2I got a question for you diggers. All my cards are in positive balances, does that really mean that if the cards were stolen or something, the credit card companies wouldn't reimburse the charges? Also, does having a positive balance help credit score any? I can't see it hurting, but will it help?
- stickyhoney, on 10/10/2007, -1/+1Sounds shady :P Banks are notorious for charges in Australia, we even get charged for checking our balance at an ATM that isn't our own banks :P
Stickyhoney
http://cr.editcards.com.au/ - RandoTheKing, on 10/12/2007, -0/+0@zippy
Zippy originally stated you should overpay on your credit card by one cent because it would cost the credit card company $15 to mail you a check.
Not true. It would cost them a few cents to print you up a check. Credit card companys usually get their paper for free, ink at an extremely reduced price, and postage is extremely cheap because they do everything in bulk. Also most credit card companies will not let you over pay on your credit card for fraud reasons, even if it is one cent. I work for one, I know. - ckedge, on 10/12/2007, -4/+4JHC all you people are morons, blindly following the hyped headlines and believing the absolute worst.
Read the ***** story far down enough and there's a choice quote noting that the person's account had been inactive for an entire year. They're not charging the person because they have a positive balance. They're charging people who have credit cards and zero activity for an entire year. A a once a year fee for the privilege of having a card they don't use. PERIOD. Whether they have a positive balance or a zero balance.
This one reporter and this one person are bitching loudly about the fact that they have a positive balance because they know you're all a bunch of sheep who only read the headline. If you're going to have a credit card and not use it (just like having a bank account and not using it) - they're going to charge you a fee. - KiaserLies, on 10/12/2007, -4/+4It's not true. they were given a choice to either have 10 removed from their account and given to the banks charity, tell the bank what charity they want to give it to, or withdraw it for themselves. this is because its the banks policy that they take out some money every once in a while
- fixedcoma, on 10/12/2007, -0/+0dude, I should have written years ago when i was with MBNA... The only thing i had put onto my account was my xbox live for 5.99$ a month and one month which is why i hate mailing bills, i forgot to mail a month ... The bill was 5.99 for xbox and 30 dollar charge for lateness...! Hmmm, thats a profit for them of five hundred percent. all for being late.. i called and cancelled the card, immediately!! they were still telling me that they would hold my points for me, i told em to forget keep it for their own greedy asses! i'll let my dollar jinx their business!
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