Warning to those with credit cards

cowman

cowman

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Cowman
I saw this on my AOPA rewards card, but the bank that runs these things serves lots of others and I'm not sure they're the only ones doing it either...

They've announced to help with the whole pandemic situation that the minimum payment amounts will now be $0 which sounds good until you read on and realize they are still charging full interest rates on the balance so... they're not really helping at all.

Worse, if you're like me and just pay the balance in full every month you might sign in and see the $0 due and think you already paid it or the billing cycle hasn't come around yet. Check those statements carefully.
 
cowman said:
I saw this on my AOPA rewards card, but the bank that runs these things serves lots of others and I'm not sure they're the only ones doing it either...

They've announced to help with the whole pandemic situation that the minimum payment amounts will now be $0 which sounds good until you read on and realize they are still charging full interest rates on the balance so... they're not really helping at all.

Worse, if you're like me and just pay the balance in full every month you might sign in and see the $0 due and think you already paid it or the billing cycle hasn't come around yet. Check those statements carefully.
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Hmm. Wonder if being able to do that was in some piece of Legislation. A number of years ago they were required to raise the minimum payment due to a more realistic level.
 
Zeldman said:
Isn't that the mission of all businesses..??
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I think the relevant part is "at your expense". There is a difference between a business that's upfront in their pricing, and one that obfuscates their pricing by withholding details, playing into assumptions, or making the structure overly complicated.

Though all business exist to make money, only a few "choice" ones have a model of: "How can we charge our customers the most money in a way that they don't know about it?"

I think a lot of the cultural acceptance of it comes from the fact that the U.S. still uses sales tax. Consumers have accepted for most of their lives that virtually never is the price you see, the price you pay. So companies can just tack more fees on after the fact and it becomes caught up in the noise.

I grew up under a VAT system, so tax was always included. The price you see is the price you pay. Everybody is used to being able to bring out your calculator and knowing how much everything costs. If you even tried charging a different price than shown, you'd literally have every single customer screaming in your face for 30 minutes, and you'd change your policy the same day.
 
deonb said:
only a few "choice" ones have a model of: "How can we charge our customers the most money in a way that they don't know about it?"
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It seems to me that the larger the company, the more they rely on obfuscation of prices/fees and trying to get away with it. Our new apartment building offers a smaller ISP called Starry and the difference between them and Comcast (the only option in most buildings here) is night and day. Same thing with my small local bank vs the big national chains. I've had nothing but pleasant experiences with my local bank where I keep all my money, and already a few bad experiences at TD bank where I was forced to open a checking account in order to rent a safety deposit box.

Given how much massive consolidation there has been in many industries, more and more money seems to be made through consumer hostile business practices.
 
I do know some people for whom the alternative to accumulating more interest is missing a payment or two, incurring a penalty charge + interest and dinging their credit rating, which they have been working very hard to build back up after the recession. This shutdown is a double whammy to them, and a doozy of one to boot. This will help them AND ME, because otherwise, I would probably make their minimum payment for them.
 
I wouldn't assume the "amount due" on my credit card statement is the balance any more than I'd assume the amount due on my mortgage statement is the balance.

Nauga,
who reads and heeds
 
Tom-D said:
Us too. :) never carry a debt
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I've gotten to the point where if I have a decent size expense I just pay it off once the charge clears. It's trivial with online/mobile banking. I like the amount of money in my bank account to be an accurate reflection of the net value +/- a few hundred.
 
cowman said:
I saw this on my AOPA rewards card, but the bank that runs these things serves lots of others and I'm not sure they're the only ones doing it either...

They've announced to help with the whole pandemic situation that the minimum payment amounts will now be $0 which sounds good until you read on and realize they are still charging full interest rates on the balance so... they're not really helping at all.

Worse, if you're like me and just pay the balance in full every month you might sign in and see the $0 due and think you already paid it or the billing cycle hasn't come around yet. Check those statements carefully.
Click to expand...
Thanks for the warning. At first, I wondered how one may miss the purchases made, until I read your post again and saw "...you might sign in and see the $0 due..."
I can see how the presentation on a web site or an app might make a difference and be confusing.
 
I don't think I have ever paid interest on a credit card.
 
I think what he is saying is that you THINK your balance is zero but it is NOT zero.
So you could pay the total due ($0.00), just like every month....but your balance is NOT zero so you get interest charges because they are carrying a balance for you.
Ie deceit at your expense & their gain.
 
I never pay credit card interest either, this may just be an issue with how I self-manage my own accounts.

Rather than wait on statements, I log in routinely and scroll through the recent transactions. When you log in the first things you see on most of the credit card sites/apps is current balance and another number that will say $xxx.00 due by xx/xx date. When that minimum due pops up that's usually my trigger to make a payment, the actual number is irrelevant other than being a non-zero amount. When I go to pay it will be the statement balance from the previous billing cycle- which will likely be less than the "current" balance which includes charges from the current billing cycle. I never do automatic payments so that I have a chance to review all the charges before paying the bill.

Anyway I'd checked the card a few times over the past weeks and always seen 0 due. That didn't seem right so I dug a bit and found out about the $0 minimum payment thing. Caught it before I paid any interest but just the way they present the surface level info when you log in was, to me, a little misleading. Thought it might be to others as well, hence the warning.
 
cowman said:
Anyway I'd checked the card a few times over the past weeks and always seen 0 due. That didn't seem right so I dug a bit and found out about the $0 minimum payment thing. Caught it before I paid any interest but just the way they present the surface level info when you log in was, to me, a little misleading. Thought it might be to others as well, hence the warning.
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I'm just not following why this is new or different for any credit account. Payment due is rarely the balance on a credit account.

Nauga,
balanced
 
nauga said:
I'm just not following why this is new or different for any credit account. Payment due is rarely the balance on a credit account.

Nauga,
balanced
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Credit cards have a “minimum due” amount at the end of every billing cycle. This is the minimum you must pay to keep your account open but it’s not the full balance due, whatever you don’t pay accrues interest. They’ve now set the minimum due to $0 meaning you don’t have to pay anything at the end of the billing cycle but you’re still being charged interest for the full amount.

As stated, I always pay the full statement balance anyway but when a billing cycle is done I’m used to seeing a > $0 amount due by some date listed.

Normally if that minimum payment amount is $0 with no due date that means I’ve paid it and don’t have to worry about it until the current billing cycle ends. Currently with their $0 minimum payment policy that number always shows $0 with no due date. That might mislead a person to think the billing cycle isn’t over and they don’t need to pay anything yet to avoid an interest charge.

I guess I am assuming most other people pay online or through an app these days. I assume if you look at the paper statements or pull up the pdf statement through the website it should have the full balance and due date on there somewhere. I don’t get the paper statement and I never really look at the pdf either because I check the transactions often enough that there’s no need.

This isn’t hidden or anything, as I said it’s just potentially misleading to someone who checks their account in a certain way.
 
cowman said:
I guess I am assuming most other people pay online or through an app these days. I assume if you look at the paper statements or pull up the pdf statement through the website it should have the full balance and due date on there somewhere. I don’t get the paper statement and I never really look at the pdf either because I check the transactions often enough that there’s no need.
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Both my amount due and balance are available online and through my banks' (plural) apps. I don't think confusing the two or failing to check the balance when making payments is the banks' fault.

In the case of my cards this is nothing new - they've always, or at least for as long as I can remember, 'encouraged' making minimum payments and letting the interest accrue.

Nauga,
paying heed
 
nauga said:
I'm just not following why this is new or different for any credit account. Payment due is rarely the balance on a credit account.

Nauga,
balanced
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I don't understand the confusion. Nobody is saying the payment due is the balance. The Payment Due is the minimum payment due this month. If it says zero, some people won't pay it, thus causing additional accrued interest. Or as was originally said, if you pay it off every month on line, and you see a payment due = zero, then you might just think you already paid it and you wind up letting the amount roll over, again incurring interest. I have forgotten that I had already paid a bill and paid it a second time, but that usually only results in a credit on my account.
 
I haven't had an AOPA card since the canned the FBO discount. Generally, AOPA services are good deals for nobody but AOPA.
 
JOhnH said:
Or as was originally said, if you pay it off every month on line, and you see a payment due = zero, then you might just think you already paid it and you wind up letting the amount roll over, again incurring interest.
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If you see payment due = zero and don't check the balance and are later surprised at an interest charge the fault does not lie with the bank.

My confusion is more surprise that someone would not check the balance when checking their statement/app/whatever.

Nauga,
fiscally
 
nauga said:
If you see payment due = zero and don't check the balance and are later surprised at an interest charge the fault does not lie with the bank.

My confusion is more surprise that someone would not check the balance when checking their statement/app/whatever.

Nauga,
fiscally
Click to expand...



It would make more sense if I screenshotted the app but I don’t want to redact everything...
When one logs in what you see is your current balance- which is the total of both any previous statements and the current billing cycle and NOT what you currently owe to avoid interest. They don’t show the statement balance- what you owe from the last billing cycle at all unless you click through a few layers. They do, however show a minimum payment due and the due date on this page normally- which is a signal one might use to start clicking through the menus to go pay the full amount.

The amount is less of an issue to me than not showing the due date anymore either which is how I know when to make my payment normally. Yes, I can dig through the site and find the actual statements with all of this info- that’s how I figured this out. However, I very nearly ended up accidentally financing my last aircraft annual because the due date I was used to seeing on the main page went away.
 
One word: Autopay

TL;DR version: set up auto pay to pay your statement balance (not minimum payment) automatically. I’ve never seen a cc that doesn’t have this feature.
 
I watched the movie "The big Short" last night which is based on the near financial collapse of the Wall Street bank industry in 2007. Very good movie about the banking industry and the problems they created leading to mortgage bonds which nearly ruined our economy. And of course the taxpayers bailed out the big banks after obvious illegal activities. You guessed it no jail time for the crooks either!

If there are any bankers on POA I would like your opinions.
 
SoCal RV Flyer said:
Me three. Used properly, the credit card affords a 1-month interest-free loan.
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Better than that, really. I don't even care about the delayed payment / interest-free loan any more, since checking and savings accounts now pay effectively/practically zero interest. But every card that we use gives us between 1% and 5% discount in the form of cash back. I don't bother with the hotel points any more, and learned the hard way not to bother with airline programs, but cash back? You bet, I'll take that. I can count the checks we write in a month on one hand and typically still have all five fingers left. And we never -- ever -- use debit cards, except at ATMs when we need a little cash.
 
I'm confused about this. What does it mean to "charge full interest rates on the balance?" Why would anyone have a balance?
 
bflynn said:
I'm confused about this. What does it mean to "charge full interest rates on the balance?" Why would anyone have a balance?
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Why do you think banks issue credit cards? Not to be nice. If someone wasn’t leaving balances on them they wouldn’t exist.
 
bflynn said:
I'm confused about this. What does it mean to "charge full interest rates on the balance?" Why would anyone have a balance?
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It's a good philosophical question, but are trying to be funny? Way too many people carry huge balances and only pay the minimum balance each month.
 
Obviously people have a balance. Maybe not POA members but average credit card debt is the US is around $7K. You can bet, most Americans are paying credit card interest on their balances.

I worked with a guy who had around $45K in credit card debt.
 
The first two threads I opened this morning are this one and Santa arrived early (ho ho ho). Just wondering what the connection might be.
 
Briar Rabbit said:
I watched the movie "The big Short" last night which is based on the near financial collapse of the Wall Street bank industry in 2007. Very good movie about the banking industry and the problems they created leading to mortgage bonds which nearly ruined our economy. And of course the taxpayers bailed out the big banks after obvious illegal activities. You guessed it no jail time for the crooks either!

If there are any bankers on POA I would like your opinions.
Click to expand...
I have been a banker for 35 years. Most of that time spend in audit/compliance field in banking, so my job is to make sure the bank is following all of the consumer protection laws and regulations that we are subject to. I also watched "The Big Short". There is about as much similarity between a Wall Street investment bank (many of whom did help contribute to the financial collapse of 2007) and your local community bank as there is between the space shuttle and a Piper Cub. Are they both "aircraft"? Absolutely. But there is far more that is different than what is similar. Same with investment banks and community banks. So tired of people lumping "bankers" together. I understand how lawyers and used car salesmen feel. Are there bad actors in community banks? Sure. But by and large they are decent, hard-working, family-oriented people who want to help make a difference in their communities. I can direct you to dozens of news accounts of the positive impact the bank I currently work for has made in our local communities. Next time, instead of "The Big Short", give a look at "It's a Wonderful Life" to see what most of the banking world is like.
 
MtPJimB said:
I have been a banker for 35 years. Most of that time spend in audit/compliance field in banking, so my job is to make sure the bank is following all of the consumer protection laws and regulations that we are subject to. I also watched "The Big Short". There is about as much similarity between a Wall Street investment bank (many of whom did help contribute to the financial collapse of 2007) and your local community bank as there is between the space shuttle and a Piper Cub. Are they both "aircraft"? Absolutely. But there is far more that is different than what is similar. Same with investment banks and community banks. So tired of people lumping "bankers" together. I understand how lawyers and used car salesmen feel. Are there bad actors in community banks? Sure. But by and large they are decent, hard-working, family-oriented people who want to help make a difference in their communities. I can direct you to dozens of news accounts of the positive impact the bank I currently work for has made in our local communities. Next time, instead of "The Big Short", give a look at "It's a Wonderful Life" to see what most of the banking world is like.
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Nice response, thank you.
 
Just FYI, most mortgage lenders are allowing you to skip a payment or two without paying a late fee, but of course you must pay interest on what will be a larger balance. Duh!
And I agree that some bankers are good, but no lawyers or used car salesmen are.
 
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