Ever get one of those little flyers with tiny, tiny printing that come in the mail sometimes saying that you are one of a class of people who will receive point-oh-six-seven-and-two-tenths-percent-of-a-dollar some time next century to compensate you for the overcharging that Credit Card Company X did while you were a cardholder? I get them on a fairly regular basis. Here’s a little story that might be a model for the beginning of one of those little episodes…
Suppose you own a credit card company. And let’s say things are a little slow, so you want to come up with a little revenue-generating idea. Try this one on for size…
You send out letters to all your current card holders. You offer them a really attractive rate–let’s say 3.99%–for the life of the balance if they use one or more of the checks you send (up to their credit limit, which you have just conveniently raised).
Okay, sounds good so far. Now you do tell them there’ll be a fee (up to $50) for each check they write. Okay. Then you tell them the check “must post to your account” no later than November 30, 2004. (Now, in case you’re like me and you’re not sure what “post to your account” really means, I checked with my bank and they said “posting” is when the check clears from the issuing party–i.e., the credit card company that’s making you this offer pays on the check.)
Okay, let’s see. We get the checks in the mail sometime around the second week of November. Thanksgiving week is the week before November 31, meaning all bets are off for anything being “posted” for sure anytime that week. So you got the checks maybe around November 15; you want to think about this for a little while, look at your situation, discover what balances you might be interested in transferring. If you take a few days to think about it, that brings you to November 19–the last day of the week before Thanksgiving week, which means your credit card company can righteously say, well, gee, we did the best we could, but you know this is a holiday time so we couldn’t really promise to get this cleared. Hmmmm.
So if your check(s) don’t clear by the 30th, not only do you have to pay your credit card company the $50-per-check transfer fee, but you’ll start getting billed the normal, much higher interest rate on the balance you just transferred. Hmmmm.
Now go back to the letter bringing this exciting offer to see if maybe you can do it over the phone so it’s faster. You look really hard… You keep looking… You turn it over and look all over the other side… And then you realize, for some reason there isn’t a single telephone number on there. Hmmmm.
You know how most of these balance transfer offers come with an 800 number and invite you to pick up the phone and make the transfer right now? Well, not this unique letter. In fact, there is no way at all to contact the credit card company about this offer. Oh, yeah, you can go to a strange unbranded (no bank name at all) website address they give you–but it contains no useful information at all unless you register–a painful process that many of us simply choose not to bother with.
Then you begin to wonder. Why doesn’t the web address have a bank name? Why isn’t there a phone number to call? Why does it warn you multiple times over? “These checks must post to your account no later than November 30…if these checks post to your account later than November 30 you will be charged regular interest rates… Don’t try to use this money until you’ve checked with your bank to make sure the funds have cleared. Remember, these checks must post…”
You know, I’ve heard of credit card companies getting in trouble for falsifying the date of receipts of customer payments and such in order to charge late fees and higher interest. This couldn’t possibly be something like that, could it?
Hmmmm. I got such a letter this month from a credit card company. The company name on the letter is a bank name I think of as okay. But funny, the checks have a different name–the name of a credit card company I swore many years ago I’d never do business with again–because of a dispute over just such an issue. Hmmmm.
I seem to remember some years ago FirstUSA bought out Bank One. I always thought it was pretty funny that suddenly the materials that came in the mail said “Bank One” and if you looked really, really close you could just barely make out the “FirstUSA” in teeny, tiny print.
So I guess that might explain how a letter could come from one credit card company/bank and the checks have a different company name on them.