June, 2004

Credit Card Scam

I still have about $40,000 in student loans to pay.  I was paying about 10% interest on them and decided I needed to transfer as much as that debt as I could to a lower rate loan.  So when I got those checks with my credit card bill, I checked them out.  They had sent me three checks, each in the amount of $6,000.  The large print said any money borrowed this way was at 3% interest for the life of the loan.  Sounded good to me, so I jumped on it. 

What I didn't know, was that cashing those checks put me over my credit limit.  When they sent me $18,000 in checks, I assumed I had $18,000 of credit available.  Wrong!  The second check put me $2,000 over my limit and the third was not honored.  But that's not the worst of it.  Chase Bank then told me that because I was over my limit, that 3% interest rate went out the window.  I now had a 20% interest rate until I got my balance in line.  I was pretty furious, but I came up with the $2,000 to get back in good graces with these b@$!%&$. 

And then guess what.  I had an automatic charge for cable t.v. hit this card.  Now this $100 is subject to that old 20% interest thing.  So I want to pay that off before I worry about the 3% interest stuff right?  Too bad.  You can't choose which rates you pay off first.  They apply it to the lowest interest rate stuff first.  I guess that makes sense from their point of view, but I am going to end up paying $500 for those two months of cable before I'm done with it. 

We all have credit cards and we all know how they work in principle.  But these guys are professional loan sharks who use the law and the small print to take advantage of unsuspecting consumers like you and me.  This isn't conspiracy rhetoric I am spouting here.  It's just a fact.  These guys are out to gouge us for every nickel they can.  It doesn't matter how good a customer you are or what the circumstances of your situation.  I went from good customer to deadbeat in a matter of minutes with them. 

Hey!  I'm a lawyer and I'm not stupid.  But this flew in under my radar screen.  So the legal advice is this.  Take 30 minutes out of your life to read the small print that comes with one of your credit cards.  I mean really read it.  So you understand it.  I'm taking Chase to task, but they all operate the same, so even if you just read one you will be pretty much up to speed with how the others work. 

The fine print is there for a reason.  And it always contains stuff they don't want you to know about.  For that reason alone, you should read it.