It is my sad duty to report several instances that have come to my attention of credit cards behaving badly.

First Up, CitiBank Foreign Transaction Fees Now Available At Home

It is one thing for the credit card companies to engage in the practice of charging foreign transaction fees when you make purchases while you are visiting another country. This by itself is an outrageous scam, one for which the credit card companies have lost a law suit about. The crux of the suit was that customers were not sufficiently notified of the these fees, not the fees themselves. Now, credit card companies are upping the on these fees not just to transactions conducted in other countries, but to transactions with companies in foreign countries.

Citibank, for example has just begun charging a 3% foreign transaction fee for purchases made from foreign companies, even if the transaction is occurring in dollars. Take for example this post on FlyerTalk. The writer has been using an overseas web hosting company for years, and has been charged in dollars. All of the sudden, Citi is now hitting him with a 3% fee. In this age of globalization, it is often difficult to tell where a company is that you are doing business with. It is not unusual to buy computer parts online from Hong Kong, web services from the U.K., or prescription drugs from Canada. What is truly terrible is that these fees are creeping into transactions conducted at home in dollars. Maybe there will be another lawsuit.

Next, Credit Cut To Top Scorers

We have been seeing a lot of these stories, however the Wall Street Journal makes it official. Credit card companies are punishing their best customers by reducing their credit lines. Here is the money quote (no pun intended):

It found that the reductions in revolving credit lines affected about 16% of the U.S. population. Of that group, about 11% didn’t have any late payments, collections accounts or public records in their credit reports that would have typically triggered a line reduction; about 5% did have negative events.

Fair Isaac’s study looked primarily at those consumers whose revolving credit lines were cut even though there were no new delinquencies in their credit reports to warrant a line reduction. In most cases, the line reductions — an average of $2,200 — had little impact on consumers’ FICO credit scores.

So the bad news is that it doesn’t matter how good your credit is, you may get a line reduction. The good news is that it doesn’t seem to be effecting people’s credit scores.

Debit Card Holds Your Funds

Here is an article from The Consumerist about the H & R Block IRS refund debit card that is mysteriously holding the customers money. They claim it is because merchants have various holds on the account, but they won’t tell them who. These holds are yet another reason why debit cards make little sense. I really don’t care if someone places a hold on my credit account, as it is not my money. With a debit card, I just don’t see how anyone can place a hold on my money without my approval.

Finally, An Update

Last week, I told you about a problem one of my friends was having with a late payment fee and interest being waived. They got the customer service to agree to waive the late fee and the interest, and then interest showed up a month later. I counciled her to call back and plead her case again, threatening to cancel the card. Amazingly, she was offered a couple thousand miles, but they refused to stick by there promise to waive the interest. Amazing! I have never heard of this happening before. She has held the same credit card for fourteen years! The world has gone mad when the credit card companies would rather loose a longtime customer than keep their word to waive the interest!

This entry was posted on Tuesday, March 31st, 2009 at 00:16 and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.