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Newsgroups: misc.consumers,news.answers
Subject: misc.consumers FAQ on credit part 2 of 4
Message-ID: <1992Aug25.132004.13489@spss.com>
From: adams@spss.com (Steve Adams)
Date: Tue, 25 Aug 1992 13:20:04 GMT
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Keywords: credit-cards chargebacks consumer-rights
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Archive-name: consumer-credit-faq/part2
Last-modified: 21 Aug 1992
Some helpful free pamphlets are available from the FRB. You can write
to Board of Governors of the Federal Reserve System, Publications
Services, MS-138, Washington DC 20551 for these among others:
- How to File a Consumer Credit Complaint
- Consumer Handbook to Credit Protection Laws
The phone number is (202) 452-3244 in case they accept phone orders.
See part 1 of this FAQ list to obtain a catalog of FRB publications,
including many on home-equity loans and other home mortgages.
It may or may not be. Does the airline fly to places you really
want to go? How many dollars must you charge to earn a free ticket?
Is the airline likely to be around by then? Are you likely to spend
more than you otherwise would, just to accumulate the miles?
Ask yourself questions like these, in addition to all the others
mentioned in this section.
Q215. I belong to the Benevolent Order of Mumble, and they mailed me a
credit-card solicitation. It would be a MasterCard with their
logo on it. Is this a good deal?
This is an affinity card; see section 1, "Credit cards, other
cards." Evaluate an affinity card as you would any other. If you
would consider it a good deal in the open market, based on the way
you use credit, then it's a good deal. But an expensive card
doesn't become a good deal just because a small fraction of the
profits are turned back to your organization. Unless the card is a
good deal for you personally, it's a better idea to make a direct
donation to your organization -- and you get a tax deduction too, if
it's a charity.
216. My bank offered me a deal if I would agree to set up my checking
account for automatic withdrawal on the due date to pay the credit
card. Is this a good idea?
It depends on the specific terms of the deal. For example, a
reduced interest rate is meaningless if you pay off every month
anyway.
It also depends on your own spending patterns. If you tend to
forget to pay your bills on time, this arrangement can save you some
late charges or finance charges. On the other hand, if you forget
to enter the automatic withdrawal in your checkbook you may find
you're overdrawn and start bouncing checks.
Some consumers have reported problems with disputed charges being
paid automatically, or the bank disregarding special requests to
alter a scheduled payment. You should weigh carefully this
additional loss of control over your checking account against the
benefits promised.
Q217. I got a call (or saw an ad) inviting me to call a 900 number for a
"guaranteed" MasterCard or Visa. Is this a good deal?
No. These offers require you to pay up front either for a specific
secured card or (worse) for a list of banks that issue secured
cards.
Instead, if you need a secured card, apply to a bank that advertises
them. (Citibank in New York started a nationwide program of secured
cards in late summer 1991.)
Even better, ask your own bank about getting a secured card there,
or referring you. There's no charge for making the inquiry, and I
have never heard of a bank charging a fee for a direct application.
Finally, check the published lists (see section 3, "Lists of good
cards"), and apply directly to banks listed there.
Q218. What should I watch out for in a corporate card?
A "corporate card" is an ordinary card, typically American Express
or Diners Club. However, you don't apply for it. It is issued to
certain employees of a company for the company's convenience in
managing travel expenses. There are a couple of possible problems.
First, you may be individually responsible for charges to the card,
even though you use it only for business purposes. This can be a
problem if your company is very slow to reimburse you for expenses.
Second, some cardholders have posted articles to the effect that
corporate cards may not have the same buyer protections (like
extended warranty) that personal cards do.
Q219. I saw an ad for a card I've never heard of. What's the story?
Be careful when applying for credit. Some companies advertise
credit cards on TV. The problem is that although the card looks a
lot like a Visa or MasterCard, it is only good for merchandise from
the company's own catalog. Despite the promise of "discount
prices," you will pay more than you would pay in stores or through
other mail-order channels.
Most legitimate catalog companies take Visa, MasterCard, American
Express, or some combination. You should always pick merchandise
for its own qualities, not because you're forced into it by which
credit card you have.
Q220. I got an application for a card that didn't state interest rate
and fees. Is this legal?
No. The U.S. Fair Credit and Charge Card Disclosure Act requires
issuers of charge or credit cards (including retail stores) to
reveal certain basic information in tabular form with the applica-
tion or the "preapproved" solicitation. This basic information
includes interest rate (APR), annual fee, and grace period.
Disclosures must also be provided before annual renewal if the card
issuer imposes an annual fee.
Source: {Consumer Rights} pamphlet, mentioned in part 1 of this FAQ
list. If you have a problem, the agency to complain to depends on
the nature of the card issuer (Federal Savings Bank, National Bank,
credit union, etc.); see the pamphlet.