Thursday, August 13, 2009

Who’s Really Responsible for…
The Crushing Burden of Debt in America



As a Realtor, I maintain a special checking account and credit card just for real estate-related expenses. This past week, I sat down to pay bills and got a huge surprise (and it wasn’t a good one). When I pulled up my AMEX bill online, something didn’t look right. For some odd reason there was a $172 finance charge on my bill. (While I’m not proud to admit this, out of necessity I sometimes carry a balance on my business credit card.) What I couldn’t figure out was, why was the previous month’s charge only $32?

Here’s what I found out…

I paid May’s American Express bill 4 days late. My payment was due on the Friday preceding the Memorial Day weekend; I paid it on Tuesday of the following week. Other than this instance, I don’t think I’ve ever had a late payment. Because my payment was 4 days late, they readjusted my interest rate from 4.99% to over 27%! After I called AMEX complaining and threatening to cancel my card, they immediately readjusted my interest rate back to 4.99% and they are reimbursing me for the overcharged interest of $142.

That same afternoon, I looked at my electronic bank statement from Bank of America and for the past 2 months they had charged me $9.95 per month for the privilege of keeping money in their bank. When I called them about it, I was told, “Oops… you’re a good customer; we didn’t mean to do that.” They removed the charges immediately.

So, being the good dad that I am, I figured I better send an email to my grown children to tell them to beware. Here are their replies…

Reply from Christi: Dad, mine jumped from 10.65% in April to 17.90% in May. Should I switch credit cards? I think I've only been late on a payment like once... I don't even look at that stuff.

Reply from Rocco: Hmm, I just checked this and my Discover Card went from 6.99% last month to 12.99% this month!!! I called to find out why and they said it was a "business decision" across all accounts and was not because of any late payments or anything on my credit record. It sounds like they're all piling on the increases during this 9-month grace period before the new credit card legislation goes into effect.

Wow…

Apparently, in the American credit markets, the word “fiduciary” has been conveniently replaced by “caveat emptor – buyer beware!” Unfortunately nobody told the consumer! Unbridled greed on all sides is not only eroding our economy but it is tilting our moral compass way out of whack. I guess it’s just not enough to pay your bills on time anymore, now you have to look over your shoulder when you do it! It’s just not right.

If you want to protect yourself from out of control interest rates, here’s a link to info on how to opt out of future increases: about.com.

*crushing debt image courtesy of American Consumer News LLC.