Diana Ospina calls me every day.
Diana Ospina calls me every day.
Diana Ospina calls me every day.
The question from Sooraj Chokkalingam had a familiar ring to it. There were gift cards that had suddenly lost their value. There were hundreds of dollars at stake. I was his last hope.
Did you know your credit card company can drop you for any reason? I didn’t either until I got the letter yesterday.
“We regret to inform you we have closed your credit card account,” the letter read.
I paused to deal with the shock.
“What?” I thought. “This can’t be happening to me. Not now. Not like this. There’s still so much I was hoping to do together.”
I read on.
“Our decision was based on your account having been inactive for 12 months. We will notify the credit bureaus within 60 days to advise that this account has been closed. We have appreciated the opportunity to serve your credit needs,” it continued.
“Well,” I thought, “that’s it then.”
Dumped by my credit card.
I’ve been on the receiving end of some harsh break-ups before, but this one hurt. No warnings. It just came out of the blue.
And they did it by mail? Cold.
Like others who have been scorned before, I couldn’t figure it out.
I had been faithful – no suspicious activity on my part. I was never late – I made all my payments on time. I never expected too much. I always stayed under my credit limit.
And now, kicked to the curb, and with such language!
“Inactivity?” Okay, well, I may not have always been the most physical, but “inactive” was going too far. “Notifying the credit bureau?” Well, that’s doesn’t seem necessary. And, “appreciated the opportunity to serve my needs?” Ouch.
There was only one thing to do. I needed some advice from a close friend. I consulted Google.
What I found didn’t help. It turns out I’m not the only one who has suffered at the hands of a fickle credit partner.
Ever hear the break-up line, “It’s not you, it’s me?” Well, in the case of your credit card, it’s true.
Seems it doesn’t matter how good you are to your credit provider. If they want to dump you, they will, because they can.
However, closing a credit card account for “no reason at all” is a bit of an overstatement. There is one reason: because you’re not profitable.
From the company’s perspective, if you’re not using the card, it makes more sense to offer that credit to someone else that will – and rack up lots of interest along the way.
Although the Credit CARD act of 2009 helped to increase protection against interest rate hikes and over-limit fees, credit cancellation policies remain largely unchanged.
Even if you’re not in default, your credit issuer can ditch you any time. The most common reason? You’re not using the account often enough.
“Sometimes we close accounts based not on your actions or inactions, but on our business needs,” my credit card agreement reads.
One consumer tried to battle a cancellation but to no avail.
After his card was cancelled, Paul Dieffenbach Jr. tried to sue Citizens Bank, but lost. Judges upheld the bank’s right to cancel his card despite the fact he had never missed a payment and never asked for an increase to his line of credit.
So, do card issuers have to warn you before they cut off your credit? Nope.
According to the CARD Act, creditors need to provide written notice to consumers 45 days before an interest rate increase or a “significant change” to the account’s terms.
Cancelling your card doesn’t qualify.
And how about your credit score? The news isn’t good there, either. Thirty percent of your FICO score comes from your “credit utilization ratio.” In other words, how much credit you’re using compared to how much you have available.
When your card gets canceled, you lose a big chunk of your available credit, resulting in a sudden increase in your utilization, if you carry balances on other cards. What does that mean? Your credit score will drop.
If you find yourself in that position, the best thing you can do is to pay down your existing debt or apply for a new card, which will again reduce your overall utilization.
In the end, no matter how responsible you may be, there are no guarantees you won’t receive a break-up letter like mine.
But at least you can try to learn from my mistake. If you’re looking for an equitable relationship, don’t count on your credit card company.
They’re very high-maintenance partners. If they’re not seeing you all the time, they lose interest.
Should a credit card be able to cancel your account for any reason?
Seventy-two dollars and sixty-four cents.
That’s how much was on the AMC Theatres gift card my wife found in a grocery store parking lot.
First thought: we scored – let’s go to the movies!
Second thought: I’d sure hate to lose a gift card with $72.46 on it.
What to do?
At first, the court-ordered legal notice looked like junk mail. I was half right.
The notice was about junk — junk fees, that is.
It’s like an episode of “Unsolved Mysteries” that plays itself endlessly for travelers.
So-called “affinity” credit cards can be a good deal for collecting miles and points — but not always. I outline the potential problems.
When Marianne Finnigan’s Starbucks cards are frozen, the fast-food retailer wipes out her store credit. Can it do that?
If you clicked on this story for your “free” gift card, you’ll definitely want to keep reading. I’ve issued plenty of warnings about “free” products and some of you, dear readers, think I’ve gone too far.
After all, aren’t some of the best things in life free?
But you might also want to consider a tale of two companies — one in South Carolina, the other in California — which allegedly hired affiliate marketers to send millions of spam text messages to consumers around the country.
When Capital One offers to “erase” part of her debts with award points, Kate Morrical calls on a loyalty program skeptic to clear things up. Find out what happens next.
Question: You’ve gone on record plenty of times with your feelings about loyalty programs, so I wondered if you’d seen this ad for Capital One’s “Purchase Eraser.” In it, Alec Baldwin implies that he can “erase” a $700 purchase with 30,000 miles.
But the program overview clearly states that any purchase over $600 is 100 miles per dollar to redeem.
When is an hour just 36 minutes? When you buy some phone cards, apparently. That’s the conclusion of a recent Federal Trade Commission investigation, which found certain pre-paid calling cards offered an average of just 40 percent of call minutes customers thought they were buying — and some, significantly less.
You should care about this if you travel outside your wireless company’s regular calling area, because that’s when you’re likely to buy one of these cards. If you don’t read the fine print on the agreement, you could end up getting shorted by close to a half hour of talk time, according to the FTC.
Question: I need your help with a problem I’m having with Starbucks. Over the years, I have regularly purchased Starbucks gift cards on eBay at a discount and simply transferred the balance to my loyalty card registered to my Starbucks account.
I recently discovered a website called Raise.com that was selling Starbucks gift cards at a 20 percent discount, so I purchased about $1,600 worth of cards from the company. I thought these could not only be used by my family and me, but would be great gifts for coworkers.
Realizing that I bought these from a third party, I tried to protected myself by transferring the balances to cards registered to my Starbucks account.
Membership has its privileges. Unless you’re Donna Jordan.
Every year since 2001, she’s paid Delta a $134 annual fee for a co-branded American Express Platinum card. The card allowed her to collect Delta miles for each dollar spent and entitled her to a free “companion certificate” on Delta.
Jordan had no problem collecting the miles. But the companion ticket? Not so easy.
When she tried to redeem the certificate for two flights from Portland, Maine, to Orlando, the only flight available had an inconvenient connection and would have cost $865. Or she could pay $329 per ticket for a better connection without cashing in her certificate. That didn’t make any sense to her.
She expressed her frustration in an email to Delta:
I will have to say, my free companion ticket from my Delta Amex was always a bargain in the past. Last year we went from Portland, Maine, to Los Angeles and the tickets were only about $450 each. Now they are literally scamming their customers!
Scam? Well, Delta is still offering something, so that might be too strong a word. But I was curious to see how the airline would respond to her letter. Maybe it would recognize that the certificate wasn’t the deal Jordan was lead to believe it would be when she signed up for the card. Perhaps it would bend a rule or two to make her happy.
And here’s how it responded …
I understand your disappointment in not being able to use the certificate for the schedule you want to be upsetting, and in comparison you found that the fares differ.
By way of explanation and not as an excuse, Delta offers a variety of discounted fares and each one has specific rules and restrictions. We realize that because some of these fares are so deeply discounted, there may be other fares available that are lower than the fares associated with the Platinum Delta SkyMiles Credit Card Companion Certificates.
However, we hope you will understand that we are unable to allow two promotions or discounts to be used toward the same ticket, which is why you are unable to use the companion certificate in connection with an Internet promotional fare, or other special discount offer. We regret the certificate does not offer significant savings for your planned trip in June.
I love the line about the answer being “by way of explanation and not as an excuse.” That’s some excellent form-letter writing.
Jordan says she’ll cancel her card.