Credit Card eZine - News and Articles about Credit Cards

Credit Card Deals Providers Are Warning You

2007-09-11

If you have set your mind on making a credit card deal online or offline, you are conceded the right to ask any question or specify certain points of the contract directly with your creditor. And if more would-be credit consumers were wiser and more farsighted, they wouldn't blame their credit card company for the problems they end up with.

Every day we are e-mailed stories describing various tangles and even misfortunes of credit cards use, many of which would never have happened, should customers have followed the creditor's advice.

We have two hot stories telling of possible credit card deals mare's nest that you may find yourself in due to your neglect of the lender's advice. It's interesting that the problems didn't come as a result of abusing one's payment obligations or exceeding the credit limit. Quite on the contrary.

Both the cardholders could boast of a high credit score and good credit history which gave them access to best credit card deals with low interest rates  and competitive fees. Possessing such credit cards, they were naturally supposed to further improve their ratings but a disappointing small mistake only threw them back.

Meet Wendy. She is a former college student who, like all others, was snowed under piles of enticing credit card offers prompted by those popular T-shirts. But, which is surprising, she stood up to the high temptation to overspend and a couple of years of responsible credit card use only gave her credit file a good start.

Wendy was granted access to instant approval, high limit credit car deals, and it entailed still further increase in credit scores and trust with her bank. However, when she agreed to co-sign a student loan for a guy she was barely familiar with, the warning of a high risk she was running didn't hold her back.

Wendy did it upon a request. She felt obliged, but her noble impulse resulted in a failure. That guy changed studies for entertainment and soon dropped out without making a single payment on his loan. It turns out, under the circumstances, that Wendy was now responsible for almost $10 000 loan!

Unfair? Vexing? Probably it is. But lender never concealed that fact that the guy had no credit history yet and his creditworthiness was rather doubtful. What's the lesson? When you venture to be a co-signer put trust in one's good credit rather than personality.

Now, there is Thomas, a small business owner, whose responsible credit card use led to two times credit increase. But somehow it seemed too much for him and he asked the lender to lower the limit back! Awful mistake and Thomas paid for it later when he quickly made a bad debt ratio.  

With all the legal fees and other credit card expenses Thomas ended up with a balance too high for his currently - after the request in reduction - credit limit. If he had agreed on the $80,000 credit limit, his $30,000 in debt would have been quite all right and his creditor would not have raised the interest rate for the bad credit debt ratio.

The debt ratio would have been less than 50% and that's a normal situation. Note it that the request to low the credit limit available caused a sincere surprise of the lender. Thomas was notified straight off that the higher the credit limit - the better it is for his credit rating.

Credit card providers have no legal right to hold back their policies. There is that small but extremely important fine print, but not many cardholders hurry to make use of it. There is your full right to ask for details or explanation of some points of the credit card deal.

Eventually, your creditor can always advise you on something or warn you, so why not follow the advise, especially as it is so often up to the point and time.

Well, I agree with you that we can blame nobody for our misfortunes except ourselves. You say, trust one’s good credit but not his or her personality. But this advice is hard to put in life. If you love your friends and trust them how can you refuse to co-sign even if they have bad credit history?! Don’t you believe that they will cope with their problems and succeed to improve their credit?... Three years ago I was a co-signer for my friend with no credit history. Everything was all right and now my friend has good credit, like me. So, I believe true friends will never let you down…