New inactivity fees on credit cards

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ShawnD1

Lifer
May 24, 2003
15,987
2
81
I'm pretty surprised some of my cards haven't been closed yet. I haven't used some of them in 5+ years.
Why do you guys all have so many credit cards? When I want more credit, I call my CC company and ask for more credit. There's no need to get 5 different cards.
 

bruceb

Diamond Member
Aug 20, 2004
8,874
111
106
I have a MC with Citi, Exxon Gas Card ( which is a Citi MC) and a Sears card (again MC thru CIti) ... I also just got a Golf magazine Visa card ... I use my Citi MC all the time, as well as the Exxon (as they give us 15 cents off each gallon in rebate) ... Sears card only now and then.
 

blackangst1

Lifer
Feb 23, 2005
22,914
2,359
126
This kind of thi king is exactly why they are trying to charge for having a card but not using it.

I personally fail to see why closing a credit card account should affect your credit rating. If anything it shows the person closing the account has some common sense and is being responsible by not leaving loose ends laying around.

Thats not how it works. FICO scores are weighed heavily on aged accounts. In other words, longstanding active accounts show you are responsible with debt given to you, thus a higher FICO
 

blackangst1

Lifer
Feb 23, 2005
22,914
2,359
126
Attitudes like that are what allow banks to rape customers like this. There are only two options: the government punishes banks for doing it, or customers punish them by not using them (or suing them). It has to be one or the other.

It has nothing to do with attitude, unfortunately. It has to do with the reality of keeping your FICO up. If you want to "send a message" to the banking industry at the expense of your own FICO, be my guest.
 

blackangst1

Lifer
Feb 23, 2005
22,914
2,359
126
Why do you guys all have so many credit cards? When I want more credit, I call my CC company and ask for more credit. There's no need to get 5 different cards.

Because multiple cards and diversity = higher FICO. With similar credit history, a person with one card at $10,000 credit line 30% used will have a lower score than someone with two cards, same total limit, same usage. It's just the way it is. If you would like to learn more about how FICO is calculated you can start here: http://www.bills.com/blog/fico-score-calculation/
 

ayabe

Diamond Member
Aug 10, 2005
7,449
0
0
I have 3 cards that all have different purposes.

Amex Delta - This is mostly for work travel and bonus miles
BoA - Emergency use only, never been touched since I opened the account
Chase - This is my normal use card

For me this is ideal but the minute BoA tries to charge me an inactivity fee, the card is getting canceled.
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
126
This is yet another way the banks rip you off of course, but it's pretty easy to avoid. Just use your card once or twice per quarter, pay off the balance in full, and voila, the interest rate doesn't matter, and you won't get socked with fees.

The bank is probably putting this fee in place to recoup some of the servicing fees associated with the account - just because you have a zero balance doesn't mean that the bank is exempted from sending statements, reporting requirements, etc.

Anyone getting a notice that their bank is charging an inactivity fee should inquire if this fee can be waived by taking some action - say if you sign up for e-statements vs. paper delivery. E-statements in particular reduces the bank's costs, and they generally allow for some kind of benefit for doing so (waived annual fee, cash bonus, etc).
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
The bank is probably putting this fee in place to recoup some of the servicing fees associated with the account - just because you have a zero balance doesn't mean that the bank is exempted from sending statements, reporting requirements, etc.

Anyone getting a notice that their bank is charging an inactivity fee should inquire if this fee can be waived by taking some action - say if you sign up for e-statements vs. paper delivery. E-statements in particular reduces the bank's costs, and they generally allow for some kind of benefit for doing so (waived annual fee, cash bonus, etc).
I don't even think we get any statements for our unused accounts. I have paper delivery and never see anything for the accounts that we rarely use. In those cases the servicing fee is literally $0. It's just an account sitting on a server taking up hard drive space for them. If somebody had an account constantly sending out statements saying $0 over and over I can understand a fee, certainly, it makes sense.

This thread is perfect evidence of how retarded our society/economy has become. The average adult has half a dozen credit cards. Even people who aren't racking up debt for cost of living are constantly borrowing just to pay for basic stuff, and sometimes it really does make sense like the $.15 off per gallon above. Isn't it just ridiculous that many of us are essentially borrowing, if even for a short term, money to pay for pretty much everything? It's just a huge silly circle jerk. The credit cards are like a cancer that have slipped in now and are so pervasive. I am absolutely positive that society as a whole would be much better served by almost everybody using, at almost all times, debit or a variant of it, just with a bit more protection against theft (since debit's is not as good as credit). This endless supply of consumer credit is hurting society, not helping it.
 

Harabec

Golden Member
Oct 15, 2005
1,371
1
81
A few questions (I don't live in the US and have no idea about this stuff)
Why do you have a credit rating at all? what is the advantage of having it? and...does it currently work as it should?
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
A few questions (I don't live in the US and have no idea about this stuff)
Why do you have a credit rating at all? what is the advantage of having it? and...does it currently work as it should?
Dayum, where are you from? I don't know how they do it in the rest of the world, other than Canada which is basically the same as the US. A credit rating has a history of most or all of your major loans such as mortgage, car loans, credit cards. Each month or so anybody who is lending you money that you're paying back sends in a report to one of or all three credit agencies. Over time this report can paint a picture of your credit worthiness and an algorithm can compute with a single number a summary of your worthiness, from 550 (you're garbage)-850 (superstar), depending on which agency the score is from. So a deadbeat will have a low score and a responsible person a good one, so when you go for another loan the lender pulls your number and can decide whether you're worthy of their money.
 

piasabird

Lifer
Feb 6, 2002
17,168
60
91
Ponders what a bank apologist is. My credit rating is so bad it stinks. One day I may pay off some of my stinking credit. In the mean time I have not used a credit card in like 2+ years. Credit cards are so redicuous that you should not even use them. One late payment and they can change your interest rate to over 30%. So why even use a credit card? Just get a loan shark!
 

sapiens74

Platinum Member
Jan 14, 2004
2,162
0
0
actually I kinda agree with them on this fee, as it costs them money to support you, send you billing statements and what not. I mean use it a couple times a year.

I'm opposed to all the other absorbent fees though :)
 

spidey07

No Lifer
Aug 4, 2000
65,469
5
76
actually I kinda agree with them on this fee, as it costs them money to support you, send you billing statements and what not. I mean use it a couple times a year.

I'm opposed to all the other absorbent fees though :)

Exactly. If you're not making them any money (using the card) then you contribute to them being overextended. These fees are nothing but common sense. And they're probably related to the credit card legislation that was passed to help consumers, that in the end via unintended consequences, HURT the consumer.
 

lothar

Diamond Member
Jan 5, 2000
6,674
7
76
Am I the only person who's happy with my bank and CC companies?
I must be in the minority...

I plan to cash my $120 rebate from my AB Cash Rebate card that I've accumulated over the past 15 months.
I've accumulated tons of rebates(5% on flight, 5% on back to school/computer stuff, 5% gas) which are automatically credited monthly on my PenFed CC bill. Accumulated $320 so far on that card.

All in all, $440.
 

MGMorden

Diamond Member
Jul 4, 2000
3,348
0
76
Things like this are why I'm loosing faith in the entire CC industry. My main card I've had for almost 10 years. My limit is $15k on that card. Last month I got my first late charge in that entire period. Reason? I paid too early.

My bill is normally due on the 20th of each month. Month before last I paid on the 9th - well before the due date. For the next month I figure I'll knock that payment out of the way early - so I setup a payment on the 26th (almost a week after the due date for the previous payment). End of the month I get a letter from the company stating that they haven't received my payment. After checking into it I find out that though the last payment is due on the 20th, I can't pay for the NEXT month until the 27th - 1 day after I made the other payment. Any payment made between those two dates is just in no-man's-land. Doesn't count towards any particular month.


Debit cards are just as bad too with the way they work overdraft charges. My bank for example keeps 2 balances - a "Posted Balance" which is a few days behind, and an "Available Balance" which is updated immediately. Debit card transactions typically take 1 to 2 days to move from Available to posted. Transactions processed as a credit card take 3-5 days to do the same.

Thing is, they charge you a fee for overdrafting either of these balances. A few years ago I was financially constrained and tended to keep my balance pretty low. I can't remember the exact numbers, but the scenario basically broke down like this:

I have a posted and available balance both of $19. I make 3 $5 charges on the card. Posted still $19, available is $4. I make a fifth $5 charge. Now by common sense methods if I had $19 in the bank I just overdrafted once and I should get a single $40 overdraft charge right? Nope. The fourth $5 charge puts the AVAILABLE balance at $-1. So there's a $20 unavailable funds charge assessed. Thing is, the fee posts to the account the next day. The $20 fee is greater than the $19 balance so the unavailable funds charge results in a $40 overdraft charge. The account is now already in a negative posted balance. The 4 $5 charges now come through two days later and since they're posting to a negative balance account all 4 get overdraft charges.

So in the end, a single transaction over, that should by any fair measure result in a $40 fee, results in $180 in fees instead. And after you patch all this up and get your account back in proper standing? $15 fee to cancel it if you're fed up. Want to just let it sit and ignore it? They'll charge you an inactivity fee on it then (quite likely over drafting you AGAIN on that if you kept the balance at $0).
 

dmcowen674

No Lifer
Oct 13, 1999
54,894
47
91
www.alienbabeltech.com
Last month I got my first late charge in that entire period. Reason? I paid too early.

Doesn't count towards any particular month.

Another thing that should be illegal.

WTF, the payment arrived and they processed it, that should make the transaction "Legal Tender for all debts public and private" as written on our currency.

The bottom line is this is all nefarious use of the computer.

This shit should not be allowed, period.
 

nobodyknows

Diamond Member
Sep 28, 2008
5,474
0
0
Thats not how it works. FICO scores are weighed heavily on aged accounts. In other words, longstanding active accounts show you are responsible with debt given to you, thus a higher FICO

Then why are they penalizing people with long standing accounts that they aren't using much? All they want to do is blackmail you into paying them some money for nothing. Screw that dude, I'd cancel my account immediately.
 

nobodyknows

Diamond Member
Sep 28, 2008
5,474
0
0
Exactly. If you're not making them any money (using the card) then you contribute to them being overextended. These fees are nothing but common sense. And they're probably related to the credit card legislation that was passed to help consumers, that in the end via unintended consequences, HURT the consumer.

Excuse me, but the credit card comapnies solicited my business with a free, no annual charge credit card offer. Now they want to charge? Wake up and smell the roses!!
 

spidey07

No Lifer
Aug 4, 2000
65,469
5
76
Excuse me, but the credit card comapnies solicited my business with a free, no annual charge credit card offer. Now they want to charge? Wake up and smell the roses!!

"Terms and conditions are subject to change"

Read the fine print you signed. If you're not making them any money then they don't really want you as a customer. It's nothing personal, it's just business. You aren't entitled to free credit or money.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
My bill is normally due on the 20th of each month. Month before last I paid on the 9th - well before the due date. For the next month I figure I'll knock that payment out of the way early - so I setup a payment on the 26th (almost a week after the due date for the previous payment). End of the month I get a letter from the company stating that they haven't received my payment. After checking into it I find out that though the last payment is due on the 20th, I can't pay for the NEXT month until the 27th - 1 day after I made the other payment. Any payment made between those two dates is just in no-man's-land. Doesn't count towards any particular month.
LOL, truly ridiculous. I generally pay my card 2-3 times/month. I think they even have a limit on how many times I can but I pay frequently all the time just to avoid such shenanigans, but practically speaking that was not your fault, I mean from a common sense perspective.
Excuse me, but the credit card comapnies solicited my business with a free, no annual charge credit card offer. Now they want to charge? Wake up and smell the roses!!
Unfortunately most businesses do more to attract than retain customers. Cell companies and media providers (cable, internet) certainly do. Existing customers who gives a crap it's too much effort for them to change out, so they lure people in with nice deals up front then screw them. Citi did it big time to me going from a delightful piece of kit to a little piece of sh*t.