CardJacked!

Well, it certainly is a new era when it comes to Credit Cards.


My Capitalone card that I've had for 12 years now, I owe $0 to, and whom I'm a "Steller" customer with, a customer I might add who happens to have one of the lowest Interest Rates with them because of my "sterling record" with them, just got slapped with a $29 Annual Fee! HUH?! I've Never Ever paid an Annual Fee for any credit card I've ever had.



Well, of course I got on the horn and went through the loop of customer service agents only to be told over and over again that due to the bad economy that they had no choice but to do this to their best customers. My response to that was "well, I'm going to have to think long and hard if I want to continue doing my business with you then. I'll have to get back to you before this payment is due".



In past times one could fight these types of fees, but it certainly looks like those days are over for at least the next couple of years.



As was mentioned in the below article the excellent customers, who are irronically called "Deadbeats" are now paying for the true Deadbeats, you know, all those people who obtained credit and credit cards and couldn't afford to pay them to begin with. There is nothing more that irks me than having to pay or subsidize those Financially Irresponsible Individuals.




If all this that has been going on lately with the economy, be it credit cards, or mortgages etc etc teaches us anything, it's that the majority of Americans are going to have to become more Financially Responsible. Basically if you can't afford to buy and pay the cash for it, then DON'T buy it. Save your money till the day comes that you can plunk down Ca$h on the barrel or in the case of a Mortgage at least 20%. There is a reason why for decades the ol' standard was a 30 year fixed mortgage with at least 20% down, and the reason for that was BECAUSE IT WORKED! We've never before under the old standards seen the skyrocketing rates of Forclosures before as we are now seeing. Now even those of us who are and always have been finanically prudent are being penilized for this whole mess be it from fees being slapped on us or higher taxes!



But the banks (and some of the politicians, since in my opinion they were the precise ones who pushed for the laxing of lending laws to begn with) need to learn that you DON'T give money to people who can't afford it to begin with no matter who threatens to sue you on behalf of their constituants! Common Sense must still come into play here. You Don't lend money to people who can't pay you back!


Now the only problem I have is do I want to risk my excellent credit score tanking by canceling this card? Remember length of history and a little thing known as utilization come into play here. Since the key to a strong credit score is to build up a nice, long history of good credit and lenders love a consumer with a lenthy proven track record of payin down debt in a timely manner. And since length of credit history accounts for 15% of your credit score, that first card you opened way back in 1990 soemthing just can’t compare with anything else.

Then there's that little thing known as "Utilization" (a/k/a your debt-to-credit ratio). Basically, the idea is that it's better to have more credit available to you than less. Credit bureaus tend to drop your credit score if you're using too much of your available credit. For instance say I have three credit cards with different credit limits of $8,000, $10,000, and $15,000. I never use the first two, but routinely have a balance of around $7,000 on the third (not that I do this but you know what I'm talking about). This means I'm utilizing 21% of my total credit ($7,000 divided by my total credit limit of $33,000). Now if I were to cancel the two cards I don't use, then my utilization rate jumps to 47%, which in turn lowers my credit score. (credit bureaus look at both total utilization rate as well as the utilization rate of each card. While credit bureaus aren't outright with their precise scoring formulas, it is a known fact that lower utilization rates will significantly boost your score.


OK, I'm off my rant now, but I'm sure that most people can agree with my aggitation on this matter.

http://www.nytimes.com/2009/05/19/business/19credit.html