Tag: credit card

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Apple’s Cards App NEEDS to Group Purchases

So as I mentioned a couple days ago, I’ve been playing with the Apple’s Cards App on my iPhone 4S and have been mostly satisfied with the experience so far, but I hit into a couple hitches today.

The first thing I noticed was the server was overloaded this afternoon. Half the time, I would get an alert telling me there was a problem connecting to the server and to try again later. But if I tap Buy again, it usually went through.

Then I got to a point where my card was being declined. I logged into my credit card’s website and looked at the pending transactions:

Apple Cards App Charges

No, I didn’t create that many cards. Half of them are $1 authorizations. Of the remaining half, about 1/3 are duplicates from server failures, which I’m hoping I won’t be charged as these duplicate orders don’t show up under my account. The cards are $2.99 each + tax. If you want to deliver them internationally, it’s $4.99 + tax.

So I expected a call from my credit card fraud/security team, but that call never came. I eventually called customer support myself assuming that the flood of Apple transactions was the cause of my card being declined. After speaking with someone on the security team, it turns out there’s a limit of 25 transactions per day before my card starts rejecting additional charges. And each of those $1 authorizations count toward that limit.

Here’s my suggestion to Apple: Please group multiple card orders like you group iTunes purchases and make one charge at the end of the day. Given it’s the holiday season, the perfect time for someone to use your Cards app, sending out 13+ cards should not be uncommon and that assume I won’t be using the credit card anywhere else that day. Plus with your server issues, some charges are showing up twice. If needed, I can even create all the cards I want beforehand and then submit them all to be charged together, but that’s currently not an option via your app. This would not only avoid having so many transactions which would easily trigger fraud alerts, but you wouldn’t have to make so many separate authorization checks. Plus it’s better for you in the long run too, since you’ll be saving on per transaction credit card fees.

I’ve already submitted the same feedback at Apple – Cards – Feedback. Hopefully we’ll see this fixed soon before the holidays are over.

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New Quarter’s Credit Card Cash Back

chocolate cake

A bit sad my Fidelity credit card’s 3-month promotional 4.5% cash back (on anything) came to an end yesterday, but this new quarter’s extra cash back bonuses don’t look too shabby.

Discover:

  • Restaurants: 5%
  • Department Stores: 5%
  • Clothing Stores: 5%

Chase Freedom:

  • Department Stores: 5%
  • Grocery: 5%
  • Movies: 5%

PenFed:

  • Electroncis 3%

PenFed has 5% cash back on gas all year round. And of course I always have my fall-back cards which give me 2% on everything else.

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Credit Lines Shrinkage

It looks like credit card companies are cracking down hard on unused credit. As I had blogged about previously, Citi had began charging an annual fee for inactivity. I actually called in this past weekend and inquired about switching to a different account with no fees. Unfortunately the customer service rep told me that it didn’t really matter which account I switched to, I’d be getting a similar letter soon afterwards telling me about the inactivity fee. I ended up closing that account. I believe I had about $6,000 in credit limit on that card.

Today I received a letter from American Express stating:

We’re writing today because we noticed that you’ve only been using a small portion of your available credit limit. To more closely match your spending history, we have adjusted the credit limit on your account to $6,500.00 The cash advance limit is $1,3000.00. If this new credit limit is not sufficient for your business, please call us at 1-800-660-2454 between the hours of 8:00am and midnight Eastern Time, Monday to Friday.

I believe my previous credit limit on this card was either $10k or $11k, so basically reducing it in half. Technically, I only put about $100/mo on this card, and mostly for gasoline purchases since it gives me 3% back instantly.

Banks must be hurting.

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Citi Credit Card Now Has Annual Fee

Ooooh! 3rd post in 3 days. Fortunately it’s a different topic today. I’ve calmed down a lot since last night’s spew, but my heart still skips a beat every time I think of it.

Anyway, I got a letter to day from Citi:

We’re writing to let you know about an important change we’re making to your account. Effective April 1, 2010, an annual fee of $60 is being added.

The reason we are making this change is to maintain the quality of our service amid the rising cost of doing business. However, because we value you as a customer, we wanted to give you an opportunity to have the annual fee credited back to your account.

Here’s how it works. Each year we’ll credit the $60 fee back to your account once you have made $2,400 in purchases during that year. That comes to an average of 200 in spending a month, an amount you can reach by using your card for purchases you already make, like gas, groceries, cell phone plans or your cable bill.

As always, you have the right to opt out of this change and close your account. Please read the Notice of Change in Terms and Right to Opt Out beginning on the back of this letter so you are fully aware of all your account changes. If you have questions, call 1-866-915-9425.

Wow… credit card companies must be pushed back a lot to now include annual fees. Unfortunately, I know longer use this card on a daily basis as the rewards structure is no longer beneficial to me. I keep it around as an emergency card since my credit limit on it exceeds $10k.

I was hoping I would be able to consolidate this card onto a different account, one hopefully without annual fees, but it looks like this is the only remaining Citi account I have. I’m going to give them a call later this month and see if I can switch my account to a non-annual fees (even reward-less account).

I would like to avoid closing this account, since it’ll hurt my credit score, especially if this account has been opened for a long time.

There was a Consumerist article on this just a few days ago: Avoid Credit Card Annual Fees: Just Charge $2,400 Per Year

Interesting… JerusalemCherry says:

I just called Citi at 800-950-5114 They advised “ALL” CitiCards will now have annual fees due to the congress changing laws etc. She advised even, non rewards cards do too. They also said the Citi-website will be updated with info soon. The customer service rep at Citi also told me its not fair to the Citi customers since tax payers bailed Citibank out etc.

I guess even non-rewards Citi cards will have an annual fee. Bummers.

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Advanta Shutting Down Credit Card

For those who have an Advanta credit card, you might want to switch to a new card after June 10th, 2009 May 30th, 2009. Apparently they’re shutting their credit card business. According to their press release:

Since the securitizations will not be permitted to fund new receivables after June 10, the Company will shut down all credit card accounts to future use at that time. Neither Advanta Bank Corp. nor any other Advanta-related entity will fund activity on its balance sheet from the accounts. Therefore, the Company will not take any off-balance sheet receivables onto its balance sheet. Shutting down the accounts will not accelerate payments required from cardholders on existing balances.

Here’s a few other articles/threads that may interest you:

To my understanding, you won’t be able to make any new charges after 6/10 5/30, but you do NOT have to pay off your existing balance. Whatever terms/rates still apply for those who do carry a balance on the card.

If you’re looking for a replacement card for your business, I suggest the American Express SimplyCash Card (which I’ve blogged about here). Unfortunately, the cash back have since decreased a bit.

If you’re looking for a Visa/MasterCard, you may want to check out the Chase Freedom For Business. You get 3% back on the top 5 categories you purchase in and you even get a $50 sign up bonus. However, I believe there’s an annual cap on how many points you can accrue. Hope this helps!

Update: Looks like they bumped up the close date to 5/30. Here’s the copy of the email I just received:

Dear Customer,

Your Advanta Business Card account is funded by an independent trust which owns the balances you owe on your account and provides funding for new transactions. We expect the trust to stop funding activity on our accounts. The trust also restricts our flexibility to fund activity on your account. Unfortunately, as a result, effective May 30th all Advanta Business Credit Card accounts, including your account, will be closed.

This means that you will not be able to use your card or account for new transactions, including purchases, checks and balance transfers beginning on May 30th. We understand that you may have written checks on your account before May 30th and we will make every effort to honor those checks that are presented to us for payment by June 3rd. If you use your Advanta card to make automatic recurring bill payments, you will need to make alternative arrangements for those payments promptly.

It is important to understand that you are not required to pay your entire balance at this time. You may continue to pay down your account balance over time, as allowed under your Advanta Business Card Agreement.

You will not lose the rewards that you have earned. If you participate in a Cash Back program, you will receive a check for the amount of any accrued rewards more than $1.00 as long as you make the required minimum payments and your account remains in good standing. If you participate in a Business Rewards program, you will have at least 60 days to redeem your points as long as you make the required minimum payments and your account remains in good standing.

We deeply regret the impact this action will have on your business and very much wish it was not necessary.

We are committed to assist you through this process. Additional information will be available at www.advanta.com/notice. If you have any other questions or concerns, or if we can assist you in any other way, please feel free to contact our Customer Service Center. You can email us your questions 24 hours a day at www.advanta.com/secure or call us toll free at (800) 705-7255, Monday – Friday 8:00 am to 8:00 pm and Saturday 8:00 am to 5:00 pm Eastern Time.

Sincerely,
John F. Moore
President, Advanta Bank Corp.

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New Credit Card Activation – Easy Phishing?

I’ve always found credit card activation through the phone system very insecure. I’m always afraid I might dial the wrong number by accident, so I always triple check the number I punch into my phone before I start entering any information. I mean consider the information they ask you during activation:

  • Full 16 digit credit card number
  • Last four digits of your social security number
  • 3 or 4 digit credit card code

If you reach a customer service, they might even ask for more information, like name and birthday. I mean if I misdial the number even by 1 digit, think of the potential identity fraud I could land myself in.

Several credit cards have implemented an online system to activate new cards, such as American Express, which I prefer to use instead of the phone.

Something I think that should be implemented is a 2-way verification. Meaning, they prove to me who they are, before I provide any of my real information. Something like a system where they include two x-digit numbers in the letter that accompanies your card or even on the sticker of new credit cards. You punch in the 1st number and the telephone system tells you the 2nd number. That way you can confirm the other side is really the bank that issued your credit card.

Of course, this doesn’t prevent random companies from sending you fake credit cards and stealing your information. However, you should never activate random credit cards, especially ones you don’t remember applying for.

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Household Bank Credit Card

So a few weeks back, I was reading SlickDeals and apparently there’s a new credit card that may interest you folks: Household Bank Credit Card

Household Bank 2% Cash Back Cards

The Household Bank 2% Cash Back Cards are great for people who need to continue establishing credit with a brand they can trust. These cards offer 2% cash back on card purchases, value and built in benefits you can use every day and everywhere you shop.

It’s a credit card with 2% cash back on ALL purchases. Previously the winner was Fidelity Investments Rewards Card giving back 1.5% cash back on ALL purchases.

Of course I only recommend this as a fall back card for all those purchases that don’t qualify for 3-5% cash back and you’re only making 1-1.5% cash back on those purchases.

At first, I was like great deal, but who is Household Bank exactly. It appears that they’re own by HSBC, giving me a lot more assurance of this credit card company.

You can view more detailed terms and conditions:

You will receive 2% earnings redeemable for cash (with a maximum of $400 annually) on new net retail purchases charged to this credit card. Cash redemptions can be claimed in increments of $25 USD only. Upon approval, you will receive the Rewards Terms and Conditions.

$400 cash back annually equates to having to spend $20,000 to max out on their cash back, much more than enough. Unlike Advanta which has capped rewards to $60 annually, which I hit in a month or 2.

Unfortunately, they’re only starting me with a $2,000 credit limit. I’ve requested a credit limit increase immediately after applying, but I got a post card in the mail that said:

… we are unable to grand a credit limit increase at this time for the following reason(s):

THIS ACCOUNT HAS NOT BEEN ACTIVATED.

Guess I was a bit too impatient. I got my card and activated it today, and of course submitted a new credit limit increase request.

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Safeway Gasoline Visa $75 Limit

safeway gasoline visa limit So I was pumping gas at my local Safeway gas station and I noticed the sign to the left. I’ve seen limits before, but they generally have 1 single cap for any type of credit cards. I found it extremely peculiar that ONLY Visa had a lower cap of $75 when all others had a higher cap at $100.

I’m not sure if this is true at other gas stations, if it’s just a Safeway thing, or maybe these limits are set by the credit card companies themselves. Maybe it’s just this particular Safeway. Typically Visa and MasterCard are neck to neck on these policies.

Update: Thanks to Ungsunghero for pointing me to this article: $75 limit on credit card charges at gas pump causes frustration:

Station owners say they simply are passing through policies of Visa and MasterCard, which won’t reimburse them more than $75 per transaction at the pump if there’s a disputed charge or a fraudulent card is used.

However, this article does state that both Visa and MasterCard has a $75 per transaction limit. Ungsunghero’s guess is that since Visa is the most common credit card out there, making it the most common one to commit fraud with, Safeway may be trying to lower their risk, which I can agree with.

Update #2: The thing as Ungsunghero later pointed out (which I also already knew) is that profit margins are very slim for gasoline. Before they would make 10 cents in profit per gallon and if you used your credit card, half of that probably goes to paying the transaction fees. And the thing with credit card fees is that there’s a base fee per transaction + a percentage of the total transaction. So as gas prices go up, so do the fees. If I recall correctly, the fees have now gone over the 10 cent profit margin.

“It’s the merchants’ decision to limit purchases,” says Visa spokesman Paul Wilke. He adds: “Customers always have the option of paying with the card at the cash register” where its policy differs from the pump.

[…]

Station owners say they don’t like the limits. If customers reswipe their card to fill up, it forces retailers to pay the card issuers more transaction fees. If they drive off without a full tank, the station lost revenue.

The reason why everyone swipes at the pump is because it’s more convenient. Who really wants to go into the convenience store, wait in line, pay a set limit, and then walk all the way back?

What I find completely ridiculous is that credit card companies are only covering a set limit per transaction, but they’re allowing customers to reswipe their cards multiple times?!?! I have to side with the gas stations on this one. Why not only allow the customer to swipe once and give a higher protection limit. I know the answer, you don’t have to tell me. Credit card companies are greedy bastards.

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High Risk Credit Card Holders Logic?

Not sure if you caught my recent entry on how Consumerist Banned Me From Commenting, but Consumerist just posted their The Consumerist Comments Code, which I’m not sure if I have a factor in causing or not.

The first point they make is: No junk comments:

Your comment should be a meaningful response to the issue raised in the post. Objections to an editor’s headlines or writing style should be emailed directly to the post’s author. Verboten: “Why is this on Consumerist?“, “tldr”, “Why did they even shop there in the first place?”, “This is a non-issue”, “Slow news day?” “Pwnd” “Yawn”, “First”, “People still ______” (use dialup, eat fast food, breathe air, and so forth), “Old news”, “lol”, “This is why I don’t shop there,” etc.

My comments aren’t exactly “Why is this on Consumerist?”. Usually I provide one or more reasons why it should not be on Consumerist.

What happens if I break these rules?

You may be banned. We might warn you in the comments. We also might not. If you ignore a warning, you will probably be banned. If you feel your ban is unwarranted, email your appeal to moderator@consumerist.com and we’ll see if we can work it out.

I find it quite useless to try to warn users inside the comment section. Often times I would post a comment and never return to see the story again. I wonder why they don’t just email the user giving him the warning.

Anyway, Consumerist recently posted this article: Risk-Based Pricing Is A Myth and I have long wondered a very similar question.

How exactly does increasing interest rates or charging late fees help you in getting money from someone who’s already late paying the bill? Logically, I’d try to make it easier for them so they actually can pay you.

As noted in the article, late fees and high interests rates don’t mitigate risk, they just make credit card companies filthy rich. I like the idea of how if you’re late on a payment or if your financial situation has changed (loss a job), decreasing your credit limit sounds like a good way to mitigate risk. If someone can’t ever make enough money to utilize their full credit line, I don’t see how increasing interest rates is going to make it work any better.

Though I do have to say, thanks to all you “high-risk” credit card holders, “low-risk” credit card users like myself can reap the benefit of rewards and cash back. For that, I thank you.

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TransUnion Settlement To Provide Free Credit Monitoring and Scores

So awhile back I read about on SlickDeals and Consumerist that there was a lawsuit involving TransUnion and they’ve agreed to give 6 or 9 month free credit monitoring and a bunch of other perks to basically every American, but you were only allowed to sign up on June 16th, 2008 or later.

June 16th came and went and I forgot about it, but thanks to WordPress drafts, I knew I had wanted to blog about it.

For a brief overview, you can read this MSN article: Consumers win free credit scores:

Any consumer who had a credit card or a mortgage, auto or student loan, or other open credit account or credit line in the U.S. anytime from 1987 to May 28 of this year will be able to choose from two free TransUnion services for a limited time, according to the terms of a settlement, which likely sets a record in affecting the largest number of people.

The lawsuit, filed in federal court in Chicago, claimed that TransUnion had violated the Fair Credit Reporting Act when it sold consumer information to businesses for their targeted marketing efforts.

[…]

Seeking to end a class-action lawsuit that’s been pending for almost a decade, TransUnion agreed to offer consumers one of two options:

  • Six months of TransUnion’s credit-monitoring service for free, giving consumers unlimited access to their credit reports and scores, and e-mail notifications when changes occur on their credit reports. The settlement values this service at $59.75.
  • Nine months of the credit-monitoring service, plus access to the credit scores used in insurance decisions, and TransUnion’s mortgage simulator service, by which consumers can see how their credit score affects their mortgage rate. Value: $115.50.

Consumers who choose the first option sacrifice their rights to enter a class-action claim against TransUnion, though they might still bring an individual case, while those who choose the second option sacrifice any further legal claims of any kind in the matter. Consumers will not need to provide a credit card to sign up for either service, and both services will simply end — that is, TransUnion will not automatically sign people up for a paid service, according to the settlement agreement.

There is a third option: Consumers can sign up for a cash payment instead of the free services, but any such payments won’t be made for two years — and they’ll be paid only if there’s money left after any other “post-settlement claims” have been paid out of a $75 million fund set up by TransUnion for the purpose, according to the settlement.

[…]

Eligible consumers will be able to choose their free service as of June 16 by going to ListClassAction.com or calling 1-866-416-3470.

Personally I don’t really have much use for this service. I already can get daily credit scores from Credit Karma (which is based on data provided by TransUnion). I also get monthly TransUnion credit scores from my Wamu Credit Card.

The credit monitoring service is nice, but if it’s only going to last 6 or 9 months, then I really don’t have a use for it.

The best part of this settlement is the fact once your free service period ends, you don’t automatically get signed up to a paid service. The service will automatically terminate and if you want to continue using it, you probably have to call in and request so. There’s probably a way to do it online too.

I’m actually contemplating on the 3rd option: cash payment, even though there’s a risk of me getting nothing, but the services that are being offered to me has pretty much 0 value to me.