Don't let your credit card dupe you
Like most people, Tina own two credit cards, both from private banks. And Tina harassed by both of them.
Here's what happen with Tina and what you can learn from it.
There is such a thing as a free lunch!
At least that is the impression Tina got from the direct sales agent.
Tina joined last company by the virtue of which she became a customer of Bank A via a corporate salary account. So far so good.
She get a visit from a Direct Sales Agent (beware :- the most notorious element in the credit card ecosystem; customer care executives come a close second). Dropping into her office, the agent managed to successfully lure her into a lifetime free credit card from B. The DSA kept cooing into ear, telling she would not have to pay an annual maintenance fee and the card is a part till death.
Now, she already was in possession of a credit card from Bank A & pay an annual fee of $17 for this card. She blindly opted for this new card with the intention of junking her old card. Why pay for a card when she can get one free?
Tina signed on the dotted link while the agent gave her a foxy smile. Well, I figured, must be just happy to meet the target.
Tina have held the card for a year. And why should she cares? As there are no payments due on this card.
Fortunately, She was in a mood to scrutinies it in detail.
After some search few headings of Credit Card Statement began making her head spin.
- AUTO DEBIT PAYMENT RECEIVED, THANK YOU ($18)
- AUTO DEBIT RETURN ($18)
- AUTO DEBIT RETURN FEE ($6)
- LATE PAYMENT FEE ($7)
- INTEREST CHARGES ($12)
In case you are unaware, interest charges are calculated on the total outstanding amount (total amount you owe the bank) on the statement day.
They debited $18 from her bank account at the end of the month. If you cannot the entire bill, they expect a minimum payment of $18. The account did not have that much cash for them to make the debit. Hence the late payment fee and the auto debit return fee.
Tina failed to understand this conundrum and called customer care. An automated voice informed her to please be on the line because her call was important to them and that a customer care executive would attend her shortly.
5 minutes later (readers please calculate the Charges of Phone Calls if no "Toll Free" no's avail), someone finally does appear on the line.
She wanted to know how on earth the bank could merrily dip into my account for $18 (auto debit charge).
The executive had no answer.
So Tina asked him to escalate the call to the floor manager.
The floor manager was not too helpful. He spoke just like the customer service executive and tried to settle the matter with "we-will-waive-off-those-charges-if-you-pay-up" kind of a gambit.
She persisted for an explanation. Well, this is one of the few times my persistence paid off.
He informed her that she had signed for the auto debit facility when the DSA had asked her to sign on the dotted line.
Now, he was more forthcoming. He also informed her that the auto debit payment doesn't lapse on its own and the card holder has to make an application for the same after the first six months to de-activate this facility.
This time Tina kicked herself for not asking the DSA some more questions and reading the fine print in detail.
The floor manager was obviously enjoying himself. He told her that auto debit payment was made on her account on 2 previous occasions!
Lesson to be learnt
- Never blindly trust a DSA.
- Ask questions, don't just listen to the sales spiel.
- Read the fine print carefully.
- Always check your monthly card statement carefully.
- Check how your dues will be settled.
- Look at what the minimum payment is and what the late payment fees are.
Please have deep and detail look over monthly Credit Card Statement?
She demanded to meet with someone responsible from the credit card division. She was told that would not be possible and She would have to write to them instead.
Moral of the story?
She still feel they have no right to utilize the Auto Debit facility. Tina understand that she had signed the form which gave them the right to do it, but still feel that the agent should have informed her about it.
Over to Bank A
During Christmas, Tina availed of two pre-approved loans from Bank A. She took these loans on her credit card and paid a fixed monthly installment of about $5 and $10 for each loan for more than a year.
A few months later, when Bank B made the above offer, She decided to transfer her credit card outstanding's to the new cards since they were offering a lower interest rate for the first 6 months.
She called customer care of Bank A and was told there was an outstanding balance of $267 odd on her card.
She transferred the balance to her new Bank B card.
Tina decided to close account with Bank A and called them up.
This time the customer care executive told her that she still had an outstanding of $134. She was aghast! She knew She had cleared the card outstanding's.
The matter did not end there. I get a call from Bank A's customer care informing her that she have a $90 credit on her card account for some reason.
Around the same time, She get another call from Bank A told her to make a payment for $25 as well!
Of course, She refuse to pay them anything.
Lesson to be learnt
- Always keep relevant statements.
- Let's say you are shifting your outstanding's from one credit card to another. The new bank will give you a demand draft in favor of the earlier bank which holds your credit card. This will be for the entire amount you owe the bank.
- You then need to hand over this to demand draft to the bank. When the bank verifies the balance transfer (they will send you a statement to that effect), you stop paying them.
- Keep copies of these statements. You never know when you might need it.