Discover Card

Citicards Robocalling

Grrrr… this really annoys me - when a company calls, you pick up the phone, and an automated attendant (aka robo-caller) says, “Please hold, an agent will be right with you…”.

I just got one of those calls from Citicards, and I’m very disappointed. I’ve always had fairly high respect for their brand, but this is rediculous. Doesn’t their management understand the damage that this type of annoying will inflict upon their brand?

I’ve had issues with Discover Card calling too much as well, and thankfully those calls have, for the most part, subsided.

Discover Buying Diner’s Club Monday,

Discover Card, a spin-off from JP Morgan, is buying Citigroup’s Diner’s Club International, for $165 million. I have applied for a Diner’s Club card in the past (they have pretty good rewards), but was denied.

Apparently you have to do a significant amount of dining domestically and overseas to be approved for the card.

American Express and Discover Promo APRs Over

The 12 months of 0% APR on my business American Express Simply Cash card are up this month, so its time to start paying it off. All in all, the card has been fantastic. My favorite things about it are the high cash back percentages (up to 5% for gas and wireless phone bills), and more importantly that the cash back is rebated the next month - no waiting an entire year!

Over the past year, I’ve worked myself up a decent amount of debt with American Express on this card, so much that they reduced my available credit on a line of credit I have with them! Even without the line of credit, I should be fine, I have some “rainy day” funds, as well as a cash-secured line with Bank of America.

If you’d like to try out the American Express Simply Cash card, you can apply through this link:

While I’m on the subject, my wife’s Discover Card promotional APR is also up as of last month, and I was pleasantly surprised to “discover” that the normal interest rate was only 9.99%. Not bad! Most of the available credit on the Discover Card was used to buy plane tickets and pay for travel expenses as my wife interviewed for infertility fellowships. It was worth it, she was chosen by the NIH! (If you want to learn more about her specialty, check out Informed Infertility.) My experience with the Discover Card has been less extensive, but if you’d like to apply for one of them, you can do so by clicking on this link:

My business also has a Discover Business Card, and again my experience with that card has also been limited. I bought a Apple MacBook with it when I first was approved as it came with 12 months of a promotional 0% interest rate on purchases. Unfortunately, my Macbook has been acting up lately.

And finally just one more link. This one is for a Discover Business Card. If you and your business have good credit you might get a sweet balance transfer, cash advance, or purchase APR! My card also came with great cash back deals, too. See their site for full details:

Discover® Business Card – 5% back on your office supplies! Apply Now!

Discover Card Affiliate

I’m glad to announce that we’re now affiliated with Discover Card! If you would like to apply for a Discover Card, you can do so right now:

Discover Courtesy Calls Are Obnoxious

I’ve ranted about obnoxious Discover Card “courtesy calls” before. There was awhile there when they called my office about 5 times over two days, didn’t leave a message, but kept calling. That type of behavior encourages me to blacklist the called identification number.

Today my home phone received 3 phone calls, and only on the third call did they leave a message. The message requested a call back, but didn’t say what it was for, or even identify the caller - I only knew it was Discover due to the caller identification. So I called back the number, and was greeted by an automated system, asking me for my account number. Great, yeah right.

I say “representative”, with no luck, then finally am transferred to an operator, who again asks for my account number, yet I still have no idea who I’m talking to or what about! Grrr. Finally I provide the phone number they called, and it turns out it was a courtesy call. In my humble opinion, courtesy is not the word I would use to describe these calls. I would choose harassment, but that’s just me.

Come to think of it, there was nothing in this call that verified Discover as the authentic caller or respondent to my return call. For all I know it could have been a more sophisticated phishing scam trying to elicit information from me. Ugh. If scammers haven’t tried this yet, I bet they will soon.

UPDATE: I can’t believe it but Discover called again today. Do I need to take out a restraining order on them??

OK, this is getting ridiculous. They just called AGAIN! Just in case you think I’m going crazy, here is the call log from the past few days:

This of course does not include their calls to my office as well.

UPDATE October 26, 2007: Just got another Discover call to the office, and requested an end to the calls. I’ve requested this before, and obviously it was ineffective.

Posted in Credit Cards, Discover Card, Se

Credit Unions

Evergreen Credit Union

Here’s a picture of the sign for Evergreen Credit Union in South Casco, Maine:

As you can see, they are promoting free checking and free bill payer.

Some Local (New England) Banking News

Salem Five has launched a new wireless banking service, so that you can access your account information from cell phones and handheld devices. While this sounds convenient, I believe they could offer more convenience by doing away with the added security on their online banking login screens, and simply using a username and password field.

As a former member of the South Shore Chamber of Commerce, the Telephone Worker’s Credit Union sent a letter to me stating that they have opened up membership to a wider group of people. While I find credit unions to be an important community builder, I don’t belong to any myself.

More Information:

Credit Cards

Whoa Home Depot

I can’t believe it! My Home Depot credit card interest rate jumped from around 11 last month to around 19 percent this month. What gives? I’ve sent them this message:

The interest rate on this account changed from approximately 11% to approximately 19%. Please change it back.

Their response:

Thank you for your request.

Since the terms on all of our accounts have changed, this is your new APR and can’t be changed back.

Sincerely,

Home Depot Credit Services.

That’s bad.

More Credit Reductions

Chase sent my business the dreaded credit line reduction letters this past week. Does anyone else find it bothersome that American taxpayers are lending these big banks money, only to have them hoard it, and refrain from lending it back to us? Why don’t we just keep the money ourselves?

I find it especially bothersome that these letters (including the one from American Express) are coming after $350 billion of the TARP funds have been released. And what adds insult to injury is that the banks are “rationalizing” their decision based upon credit reports saying that the amount of outstanding debt to available credit ratio is too high. Strange, that ratio for my business has only gotten better (much better, I might add) over the past year. I hate to second guess the rationale there, but I’d venture to guess that the real reason is that the banks themselves are still in terrible financial shape due to their own mismanagement.

Shouldn’t this type of action on the banks’ part have happened before they found themselves in dire straights? If so, does it mean that last year when they went begging to Congress they were only crying wolf, and are now seriously in rough shape? I hope not, I really hope not.

In the end, its these types of credit restrictions which cause more damage than good. It encourages people and banks to borrow more than they need, hoard cash, and not repay their debts when they can with excess capital. It further exacerbates the lack of cash flow and available credit. Dare I say there will be a prolonged financial ice age before there is any hope of a financial rebirth?

Is this nonsense happening to anyone else? Please share your stories, thanks!

Credit Card Regulations

As you may have heard, federal regulators have passed several new regulations concerning how credit cards are marketed and managed by credit card companies. To me, some of the changes seems pretty unimportant or not very different to existing practices, but one of them stuck out when I heard about this on the radio.

The one change that stuck out to me was how credit cards apply excess funds from payments to outstanding debt. Many credit card customers are surprised when they learn that payments made to their accounts are applied only to the lower balance debt first, regardless of when the various rate debts were acquired. There is no “first in, first out” rule when it comes to paying down credit card debt.

From what I understand, the new law will require credit card companies to apply payments to the highest interest rate first. While this is obviously a good thing for consumers, it seems a little heavy handed on the part of regulators. One alternative I heard about that seemed fair was to apply the payment proportionally to all outstanding debt.

No matter what the case, none of these changes will appear in our lives until mid 2010, which is still a ways away. The commentator on the radio I listened to said that Congress may step in before then to enact similar measures or to simply enforce these new rules sooner.

American Express in Trouble?

So after recently informing me that American Express is phasing out their line of credit, I learned today that American Express has also called my Simply Cash credit card in for “review”. This is very upsetting to me, and just another negative experience to add to the list of my relationship with American Express.

They also reduced the line of credit I have on a personal credit card with them, but that doesn’t bother me, as the balance I have on it carries a 3.9% APR for the life of the balance. I don’t plan on using it any time soon, since they would apply my payments to the lower APR first, while new charges rack up higher interest fees.

With the government pumping in well over one trillion dollars into the financial markets, and dropping rates to 0.25 percent, I’d figure that banks and credit card companies would be extending lines of credit, not closing and curtailing them. All this makes me wonder, is American Express in financial trouble? Maybe they weren’t able to tap into the TARP funds. I’m fairly certain they already owned a bank, and come to think of it, American Express recently applied and were approved to become a bank expressly for the purpose of gaining access to TARP funds. Go figure.

Its good to know I’m not the only one getting their credit lines cut:
Changing credit card terms squeeze consumers @ USA Today

Capital One Buying Chevy Chase Bank

Wow - this is news! Capital One is reportedly buying Chevy Chase Bank. Since I’ve moved to Bethesda, I see tons of Chevy Chase bank branches all the time these days.

But even before I moved here, I was familiar with the bank and the brand, and frankly I’m surprised that their board and shareholders are approving the sale. I have to imagine that the capital marketplace is really bad for this transaction to be beneficial to Chevy Chase Bank.

Capital One will likely get some great customers, lots of deposits, and access to a wealthy marketplace with this purchase. They’ve been buying up several retail banks over the past few years, and I expect that their acquisitions will continue, especially if they can get quality banks like Chevy Chase.

Bank Marketing

Wachovia’s Savings Program: Way2Save

I just saw a television commercial for Wachovia’s new savings program called “Way2Save”. Its similar to Bank of America’s “Keep the Change” program, but instead of the amount of of change required to “round-up”, Wachovia transfers a single dollar from the customer’s checking account into a high interest money market account.

I believe Bank of America filed a patent application for their program. I’m curious to learn if the licensed the concept to Wachovia, or if they will sue for infringement of intellectual property.

These concepts are a great use of technology in my humble opinion, and I expect to see more of this in the near and long term future.

Wainwright Bank

Wainwright Bank has been airing some radio commercials in our marketplace, promoting itself as an environmentally conscious bank. However, they stop short of explaining how they are more environmentally friendly than any other banks out there. Compared to other industries, I don’t think banks are very damaging to the environment in general, so I’m not sure how effective this campaign is going to be, but they did capture my attention.

Valley Green Bank

This is an interesting looking bank I found in Philadelphia, PA. It has a very modern look to it, don’t you think? Their website has a much better picture of it. Check it out so you can see the full effect:

ING Direct Launches “Electric Orange”

Thursday, May 17th, 2007

I just got an email from ING Direct - they are launching a new product called “Electric Orange” which offers higher interest for bigger deposits, and even a MasterCard debit card for making purchases.

Electric Orange delivers all the features of conventional checking plus the speed and convenience of electronic checking:

Apply for your Electric Orange
today and start earning 1% Cash Back.

• It pays high interest
• 4.00% APY on balances up to $50,000
• 5.25% APY on balances between $50,000 and $100,000
• 5.30% APY on balances of $100,000 or more
• A MasterCard® Debit Card for purchases
• Free ATM access at more than 32,000 locations nationwide
• Free Bill Pay
• Automatic overdraft protection

(Annual percentage yields apply to your entire balance=2E All listed rates are variable and effective as of 5/4/07)

That’s right, from June 1, 2007 to July 31, 2007, when you open Electric Orange and use your MasterCard® Debit Card to make signture-based purchases, you’ll get 1% Cash Back, up to $250 per month, on what you spend, anywhere.

I used to deposit my money into ING Direct for many years, but now I use PayPal. For more information, check out our page on ING versus PayPal.

Bank Fees

Whoa Home Depot

Wednesday, March 25th, 2009

I can’t believe it! My Home Depot credit card interest rate jumped from around 11 last month to around 19 percent this month. What gives? I’ve sent them this message:

The interest rate on this account changed from approximately 11% to approximately 19%. Please change it back.

Their response:

Thank you for your request.

Since the terms on all of our accounts have changed, this is your new APR and can’t be changed back.

Sincerely,

Home Depot Credit Services.

That’s bad.

Bank of America Overdraft Fees

Tuesday, December 11th, 2007

I just hit with two overdraft fees on my Bank of America checking account. How much? $35 each. That really hurts. I mean that really, really hurts.

Does anyone else feel that those fees are a little bit excessive?

UPDATE December 18, 2007: Bank of America sent out a notice informing me of the overdraft. Citizens Bank did the same thing in the past when I overdrew my account with them, but Bank of America has a return feedback form, as well as some “helpful hints” to try and avoid the overdraft occurring again.

My issue with the overdraft fee is that I feel it is excessive. $35 is a lot of money, and I believe they should only charge once per day. I used to have overdraft protection with a saving account, but if I recall correctly, they charge $10 for the transfer!

Bank of America Economy Business Checking Fee

I just logged into my Bank of America small business account to check my balances, and to my surprise I noticed a $25 monthly maintenance fee. I’ve never seen that before so I emailed customer service about it.

While I’m waiting to get a message back from customer service, I did a little reading of the fine print for the small business economy checking, and I found that there can be a fee for the business economy checking. It can be waived in a variety of ways:

$2,500 minimum daily balance

$7,500 average monthly balance

of if you have a Personal Advantage account with Bank of America. If you have any personal account with Bank of America, the fee is waived for two years. So maybe that’s why I’m now getting the fee, but still I’m confused - their website says the fee is only $13 if it isn’t waived.

UPDATE December 2, 2007: They sent this back to me:

Dear Valued Customer,

Thank you for your inquiry dated 12/1/07 regarding your Monthly Maintenance fee. We will be happy to assist you.

The Advantage relationship requires an average daily balance of $15000.00 or higher in one checking account, Regular Savings account, or Custom Savings account in order to waive the $25.00 monthly service charge. This monthly service charge may also be waived by maintaining a $20000.00 average daily balance in a checking account that is linked with a savings account, Money Market Savings account, or a CD or IRA
account.

We apologize for any inconvenience this may have caused. We value you as a customer and appreciate your business. If we may be of further assistance, please contact us again by e-mail. Thank you for choosing
Bank of America.

Sincerely,

Craig Gentry
Bank of America

But I don’t have an “Advantage relationship” - I only have the economy checking. What gives, this response makes very little sense to me.

UPDATE December 4, 2007: After several back and forth emails with Bank of America representatives, I never was able to figure out what a “Business Advantage Relationship” was. Every time I told them I had an economy account, they concurred, and said I had an advantage relationship. When I asked what that was, they told me what an advantage checking account was, resulting in a vicious cycle. I even searched online for what it was, but only found one site which referenced it, and it wasn’t a Bank of America page.

In the end, I canceled the advantage relationship, and had the fee refunded. Then the question was whether or not the CD I have with Bank of America would count towards my minimum daily balance to waive the fee for my economy checking account. I chatted with a Bank of America CSR through their website and was informed that the minimum balance is calculated by only the amounts in the checking account. Too bad. Its probably a good idea to have a minimum of $2500 in my checking account anyway, or $3000 for that matter. Then if it goes below that amount, I can transfer funds into it.

Bank Failures

Wamu Suing the FDIC

Now this is interesting! Who would have thought that a bank would sue the Federal Depository Insurance Company? It comes as a surprise to me, but apparently they are indeed.

Any they aren’t looking for small change, they are suing for billions of dollars.

I found out about this via a Portland Business Journal article, and I’m sure a story of this complexity will produce many more articles.

More Credit Reductions

Chase sent my business the dreaded credit line reduction letters this past week. Does anyone else find it bothersome that American taxpayers are lending these big banks money, only to have them hoard it, and refrain from lending it back to us? Why don’t we just keep the money ourselves?

I find it especially bothersome that these letters (including the one from American Express) are coming after $350 billion of the TARP funds have been released. And what adds insult to injury is that the banks are “rationalizing” their decision based upon credit reports saying that the amount of outstanding debt to available credit ratio is too high. Strange, that ratio for my business has only gotten better (much better, I might add) over the past year. I hate to second guess the rationale there, but I’d venture to guess that the real reason is that the banks themselves are still in terrible financial shape due to their own mismanagement.

Shouldn’t this type of action on the banks’ part have happened before they found themselves in dire straights? If so, does it mean that last year when they went begging to Congress they were only crying wolf, and are now seriously in rough shape? I hope not, I really hope not.

In the end, its these types of credit restrictions which cause more damage than good. It encourages people and banks to borrow more than they need, hoard cash, and not repay their debts when they can with excess capital. It further exacerbates the lack of cash flow and available credit. Dare I say there will be a prolonged financial ice age before there is any hope of a financial rebirth?

Is this nonsense happening to anyone else? Please share your stories, thanks!

First Georgia Community Bank Closed

First Georgia Community Bank was seized by the FDIC yesterday. Its a small bank, so not too many people will be affected. I believe that the bank’s assets will be quickly purchased, thus I doubt that any depositors will have any issue, or even delay in being able to access their funds. Their website says that all deposits have been transferred to United Bank in Zebulon, GA. Side note: Zebulon is a great name for a town, don’t you think?

According to the bank’s website, which is still active, the bank only has four locations, and originally opened in 1996. It is reportedly the twenty third bank failure this year.

Credit Rating Agencies

I’ve been listening to the Senate hearings about the financial market meltdown, and recently there has been a lot of talk about the credit rating agencies: Moody’s, Standard & Poors, among others. From what I’ve gathered, they were rating bonds which were secured by sub-prime mortgages as AAA, or investment grade. Since these bonds were rated so highly, those who sold them were able to pay lower interest rates to their purchasers.

As it turned out, the sub-prime mortgages were not very good quality assets, and they could indeed lose value - a lot of value. When they did lose value, not only did the bonds which were secured by the mortgages lose value, but as the credit rating went down, the interest rate upon which the bond issuer must pay went up.

Even without this knowledge, I had a feeling that the problems in the sub-prime mortgage marketplace would have far reaching implications. In learning about how these credit rating agencies essentially portrayed speculation as reliable investments, it makes sense that the housing bubble not only inflated house values, but also the value of the stock market in general.

I’m still learning a lot about this fiasco, how wide spread it is, what caused it, and what some potential solutions might be, and as I learn more, I’ll be posting my thoughts here on Informed Banking.

Bailout Busted

The $700 billion bailout was voted down. From what I’ve heard, there were some lame reasons for voting against it, like partisan bickering, as well as some good reasons, like outrage by the public and glaring oddities in the bill.

For example, I saw one report on the news that said a congressional office received over 100 calls in a short period of time, all of the calls expressing a strong opposition to the bill, and only one “I’ll think about it” expression. Another example, one congresswoman explained that the bill asked for $700 billion in capital to buy distressed mortgage assets, but also raised the Federal debt limit from $9 trillion to $11 trillion.

It certainly sounds like most average American citizens accept that the letting the economy fail will be bad for everyone, but they continue to accept responsibility for it. If the system is broken, filling it up with more money won’t fix it, they say.

I’m still not sure what to make of the situation. What do you think?

Automobile Loans

Auto Loans

My wife is looking to buy a new car, and so we’re shopping around for auto loans.

When I bought my 2006 Toyota Corolla, Toyota was having a promotion and I landed 2.9% financing. The same dealership is now offering 7%, no thanks.

USAA

We called USAA, and they said they could offer 5.99%, a little better.

FIA Card Services / Bank of America

FIA Card Services is really Bank of America, and they are offering 6.04% according to their website.

Capital One

Capital One also has 5.99% car loan rates on new cars.

Credit Cards

While there are no doubt better deals on credit cards, the available credit won’t be as high, and it will also have a negative impact on our credit score, so no thanks.

Promotional Car Loan Rates

We’re hoping to find a promotional auto loan rate within the next few weeks. If I find anything good, I’ll post it here!

UPDATE:

We ended up going through Toyota Motor Credit Company (TMCC) as they were able to provide a slightly better rate and a faster turnaround. My wife got her new Toyota RAV4 in less than two days!