What would you do if the amount you owed on your mortgage suddenly showed up on your credit card bill?

Chase Bank

Here’s a little background.  I’ve had a Chase credit card for years and have been paying the bill with our online bill pay service for most of that time.  A while back, Chase Bank also bought our mortgage; which screwed up my online bill pay processing for our home loan for a month or two.  After spending time on the phone and getting late fees reversed, I thought I was all set with our automated billing/payment.

Unfortunately, the customer service person who had helped me straighten out the online account for our mortgage had only solved a part of the problem.  When they added the home loan account they somehow “hid” the credit card account, which meant it no longer showed up online.

Chase Credit Card Late Payment

Since the credit card was hidden in the online interface, the electronic bill wasn’t sent to my  online bill pay company so I never received notice of what I owed.  I do have my credit card setup to send phone alerts when payments are paid or overdue so I was notified the day after the bill was due that Chase hadn’t received payment.  I also got another phone alert telling me that I had reached my credit limit.

Now, here’s the part where my heart leapt from my chest. 

I logged into my Chase account online to see what was going on and I saw the balance due was many thousands of dollars!  Of course I immediately thought someone had stolen our card and was on a shopping spree.  I couldn’t understand how the credit card company could have possibly let them spend that much money before cutting the card off.  We’re not talking 10K or 20K here, we’re talking a LOT of money that showed up on the balance due line.

Chase Customer Service

I dialed the phone number for Chase as fast as possible and I’m sure the lady on the other end of the line probably thought I was about to lose it.  After asking me a few questions, she pointed out that the bill I was looking at online was my mortgage bill, not my credit card bill.  Whew!

I could breathe again.  I was so used to logging into that account to see my credit card statement, I hadn’t even thought about the fact the balance due I saw could have been a home loan.  The customer service lady was reasonable and Chase waived the late fee and finance charges since they had made some sort of technical mistake that caused me not to get my bill.

Then she transferred me to the web department who looked at my account and let me know that somehow my credit card account had been “hidden” from online access.  They flipped a switch and right away I was able to see both types of statements.

So now I’m back on track with our online bill pay for both bills and am glad I didn’t have a heart attack during the few minutes I thought my credit card balance was as large as my mortgage payment.

I do get frustrated when big companies miss a detail in your account somewhere that causes you lost time and hassle.  I am glad that Chase was reasonable and refunded my late fees and I must admit she offered some of the best customer service I’ve had in about 8 months.  Luckily, I did have to break out my tips on how to beat bad customer :)

I lost my credit card a week ago and have been waiting to report a lost card in the hopes that it would turn up. I’ve been logging on every day to check for purchases on my lost card, our American Express Blue Cash, and hadn’t seen any activity since the day it went missing.

Luckily, today I found the lost card “hiding” on the floor of our garage, where I must have dropped it when I climbed out of the car.  I started wondering what would have happened if someone had stolen my credit card and I hadn’t reported it to American Express right away.

Credit Card Fraud Alert

I called them up and quizzed an operator on the proper procedure for a lost credit card.  They assured me that I would never be responsible for fraudulent charges on an AmEx card but said in the future I should call right away if I’ve misplaced my card.

Apparently American Express can put a 24 hour hold on your credit card where no one can use it for that time period. If you find your lost card and call back within 24 hours then they lift the hold and you’re back to charging as normal. If 24 hours passes without them hearing from you, then they invalidate your card and it can’t be used again.

Lost Card Liability

Obviously AmEx takes fraud or identity theft very seriously, I imagine they lose a lot of money from it each year. The rep told me to notify them as soon as possible if your card is missing, that they’re open 24 hours a day so you can call anytime.  (On a side note, I can confirm they’re at least open until 2 AM, which is when I called them up to research this post.  Not only that, the lady was surprisingly cheerful for a middle of the night call.)

Of course my reason for waiting was that I didn’t want to report the credit card lost or stolen then turn around and find it two days later & be without a card.  I figured it was somewhere in the house but in the back of my mind I was worried someone out there might have it.  What I really wanted to know was whether I’d be held liable for any purchases on the credit card if it was missing and I didn’t report it.  The lady said no, that if the charges were fraudulent, I wouldn’t have to pay them but I should report a missing card as soon as possible.

Credit Card Monitoring

My next question was, what if you lose your card and don’t realize it? She assured me that American Express has an account security team that does daily monitoring of transactions and if they detect suspicious or irregular activity they’ll alert you by phone and by email.  Which, as she explains it, is why they asked for my cell phone and email address when I called in tonight.

If any suspicious charges do show up on your card, she said to call up immediately and that they would cancel your card right away.  Then they send the charges over to their fraud group for an investigation into the purchases.

New Credit Cards

If you cancel your card because you lose it or due to someone else using it , American Express will put a new one in the mail and you should have it within 7 business days.  Of course this is kind of a pain, which is why it’s nice to have a backup card.

I also asked about accounts with two cards.   For example, my wife and I use the AmEx Blue Cash but we each have our own card and they each have their own number.  If they were to cancel my card and send off a new one, hers would still work even though it was under the same household.  I’m not sure how this whole process works for Visa cards and Mastercard, I’ll have to call up the customer service rep at Chase and see what their policies are. 

A reader, Iris, wrote in with a question about the best student credit card for her son:

“Hi- Your website is very helpful. My son is in med school-no income, big loan. I’m helping him shop for a credit card to build a credit rating(he uses debit card usually). What’s best for him-Capital one no hassle cash rewards. Chase Rewards, american express(concerned it won’t be taken everywhere-but debit will i think) –do they all let you look at your account on line and pay automatically by bank account?  thanks much, iris”

Personally I really like our American Express Blue Cash card but you’re right AmEx cards aren’t accepted by all merchants since they charge them higher fees. We’ve accumulated a few backup cards, Bank of America, Chase, and Citi cards, but none of them are student cards.  American Express does have a Blue for Students card that’s decent if you have good enough credit to qualify.

I wrote about the best credit cards for college students a little over a year ago but it’s been a while since I’ve researched them since then.  Maybe the other readers can offer up their suggestions on the best student credit cards.  In terms of your question about access, pretty much any card you get these days lets you see your account and bills online and pay electronically with funds from you bank account. 

One last point on building credit, if your son has horrible or zero credit, he can use secured loans or secured credit cards to improve his credit score. Hope that helps!

PayPal encouraged me to pay with my bank account rather than my credit card as I was setting up a subscription payment last night.  When I first setup the subscription in PayPal it defaulted to use my bank account as the funding source.

I wanted to switch it over to use my credit card just in case the subscription payment was due and there was no cash in the bank account.  In my case it wouldn’t be that I didn’t have the cash, it just might be in another account.  So rather than have the payment not go through, I set it up to use my credit card as a funding source.  Plus that buys me another few weeks of time I can hang onto my money before I actually have to pay for it.

When I attempted to change my funding options from bank account to credit card, PayPal prompted me with the message below:

You’re choosing not to pay with a bank account. Please note that both bank account and credit card payments are sent instantly, and account numbers are never exposed to the merchant.

 

You’ll also find that transactions paid with a bank account:

 

    * Will not accrue credit card finance charges.
    * Let you stay in control of spending and avoid credit card debt.

 

No matter how you pay, you get 100% protection against unauthorized payments sent from your account.

 

Do you want to make this payment with your bank account?

I went ahead and choose the credit card option but thought it was interesting that PayPal is discouraging the use of credit cards and encouraging paying with cash using this approach.  Perhaps it’s to avoid paying fees to the credit card company for processing?

I’ve been to plenty of brick and mortar businesses where they don’t take credit cards to avoid the fees but whatever the reason, this is the first time I’ve ever seen something like this online before.  Have you ever had a business or payment processor encourage you to use cash over credit online?

Personal budgeting can be a different process for each person.  When I talked about how personal budget tracking can save you money, I used an example of how my employer saves money by tracking each piece of paper we print.

I showed how the act of tracking each job before it’s printed and assigning it to part of the budget causes us to more careful with what we print. I ended my discussion with two questions.

• Are you tracking your spending against your budget?
• What system do you have in place to monitor your expenses?

Personal Budgeting Styles

The example I gave was of a very detailed tracking system and Plonkee brought up the point that such precise tracking wouldn’t work well for her:

“I don’t know – there’s a limit to how much tracking is worthwhile. I’m not very detail oriented and would struggle to keep up with anything that was in depth. I prefer to give myself allowances. I can spend whatever I like, on whatever I like, but the total budget for *frills and frippery* is limited each month.”

I definitely understand where she’s coming from, in a financial confession earlier this year I admitted that I hate budgeting.  Of course ctreit sounds like he feels the opposite when he shared how he budgets and tracks his spending:

“When we track our expenses, we are very diligent. We include every single dollar we spend. After all, even the afternoon candy bar for 75 cents adds up to 20 bucks or so in a month. There is one big benefit when we track our expenses: we become very careful about spending money because we don’t want to face the music at the end of the month if we spend money stupidly. I for one would not want my wife to reprimand me for foolish spending.”

Our Credit Card Tracking System

I think each person has their own personal budgeting style that works best for them.  For example, when I asked, “are you tracking your spending against your budget?” the answer could be that you sit down with your credit card statement at the end of every month and see where you spent your money and how it compares to what you had budgeted.

We charge everything on our credit card, our system for monitoring our expenses is to leverage the technology of American Express and Visa to track and categorize each expenditure.  Then we can can download the transactions into Quicken to categorize anything that was missed and compare it against our budget.

I don’t what makes different budgeting styles fit better with one person or another.  I suppose it’s partly your personality and partly how you were raised to manage and think about money.  So regardless of what system for tracking and monitoring your expenses you use, the important thing is that you have and use a system at all.  If you have one, great.  If not, here are some tools for tracking and monitoring you can play around with to see what fits you best.  Credit cards for spending and tracking and personal finance software for monitoring and analysis.

Credit Cards

• American Express True Earnings
• Discover More Card

Personal Finance Software

• You Need a Budget
• Quicken Online
• Wesabe

Improving your credit score isn’t something that happens overnight but by following the suggestions below you should be able to raise your credit score over time.

Don’t Pay Your Bills Late

Your payment history is the most heavily weighted factor that goes into your credit score so make sure you’re at least making your minimum payments.  If those are more than you can afford sometimes the companies you owe money to are willing to put you on an extended payment plan.

Maintain Low Credit Card Balances

The next most important factor making up your credit score is the percentage of your available credit that you borrow.  If you’re constantly using up over 30% or 40% of your credit available you will be deemed a higher risk.

Build Credit History

The average age of your credit accounts is the next biggest component of your credit score.  If you add a bunch of new credit and cancel old cards this will drag down the average age of your credit accounts and your credit score along with it.

Use a Mix of Debt

This matters because companies look at the different types of debt that you have and weigh some more heavily than others.  For example, your credit card debt carries more weight than your mortgage or car loan.

Reduce New Credit Lines

Credit reporting agencies Experian, Equifax, and TransUnion monitor for attempts to open new lines of credit.  Each time a lender does a hard pull on your credit report that credit inquiry is noted and the more you have the worse an effect it can have on your credit score.

Identity theft probably isn’t the primary concern of most college students heading off to school this fall, however, college campuses can be big targets of identity theft.  With so many people living together in such close quarters it can be a hot spot for thieves and dishonest students to take advantage of other unsuspecting students.

If you’re going away to school for the first time or returning for another year, it’s extremely important to take certain precautions to keep your identity and money safe. Here are a few tips to help you avoid identify theft.

Set a password on your computer, lock your computer when away from it.

This is easy to do, and it will deflect most common computer users. Although, if your computer is stolen by a decent computer hacker, they’ll be able to get past the screen saver password so don’t store passords to your online bank accounts or other sensitive information on your computer. Make sure that you never leave your computer unattended in public such as the library, student union, or cafeteria. When you leave your laptop in your dorm room you could even stash it out of plain site.

Avoid revealing too much personal detail on social networking sites.

Every piece of information that identity thieves can gather about you is another clue to stealing your identity.  Seemingly harmless pieces of information individually (birthday, address, phone number, etc) can add up over time and eventually make you a victim of identity theft.

Not only is this good for your security, but can also protect your future career. Remember, everything you post on Facebook, Twitter, or MySpace could end up being seen by the wrong people at the wrong time. Use social networking wisely, and don’t post pictures that might compromise your reputation or give off the wrong idea about you.

Don’t let anyone borrow your credit or debit cards.

This might not sound like something you’d ever think about doing, but you’ll be running across dozens of “mooches” at school. They might ask you, “Hey man, can I just borrow your card to order a pizza, I’ll give you the cash”, but don’t trust them unless you are really close to them. Don’t give out your credit card number or debit card number to anyone, write it anywhere, or store it anywhere on your computer.

Don’t open a tab on your credit card and forget it.

I’ve never done this, but I’ve come close! You never know who might be working behind the bar and if they’ll abuse your card if you leave it there overnight. Make sure your designated driver reminds everyone to close out their tabs. If you’re walking home or taking public transportation, write a note on your hand to remind yourself.

Call right away if credit card stolen or lost.

Do not wait until the next morning if you think you lost or had your credit card stolen. Credit card companies have 24 hour customer service, and it will be much easier on yourself and the credit card company if you report it right away. Even if you end up finding it a couple of days later, it’s better safe than sorry, and you’ll receive a new card usually within a week.

You aren’t personally responsible for an unauthorized credit or debit transaction, but you can make a much stronger case that it wasn’t you if you report it as soon as you think it’s been lost or stolen.

Don’t keep cash in your dorm room, use debit card instead

Identity theives take your identity so they can steal money.  If you just leave your money lying around, they can just skip the identity part and go right after your cash. It’s not that you don’t trust your roommate (or maybe you don’t), but when you aren’t there, your roommate could be bringing in all kinds of people to the room that you’ve never met before. It’s always a good idea to keep your cash on you or better yet, use a debit card for most transactions.

If you’ve never had your identity or credit card stolen in the past, let me assure you it can drain a lot of your time and money trying to get the situation straightened out. Here are some more identity theft tips to help protect your money and your credit.

The credit card interest rate scammers have been calling me about once a month for the last few months.  I’ve been trying figure out what their angle is and each time they call I get a little more information out of them. 

They’ve simplified their inital automated call.  Now instead of talking about President Obama and credit card companies they simply say:

“This is your 2nd and final notice to lower your interest rates.  You should have gotten the first notice in the mail, this is your last chance to lower your rates. Press 1 to lower your interest rates now, Press 3 to be removed from our special list.”

They’re also a little more specific about who they’re after since they follow the intro up with:

“To qualify for lower rates you must have at least $4000 in credit card debt. Press 1 to speak with a representative, Press 3 to be removed from our list.”

So of course I pressed 1 to see what dirt I could dig up on them. A real person actually answered this time, here was our conversation (her questions are in bold, followed by my responses)

Hi, this is Alicia.  Did you press 1 to lower your interest rates?

Yes, I’m sorry what company are you calling from?

I’m Alicia with Universal Card Services.  Let me ask you a few questions. Do you owe more than 2500 in debt?

Yes

How much credit card debt do you have?

$5000

Are your interest rates above 12%?

Yes

How many credit cards is the debt spread across?

Two cards

Are you in good standings on those credit cards? Are you paying your bills on time?

Yes

Are you over credit limit on either of those cards?

No

Congratulation, you qualify for lower interest rates!  I just need to get some basic information.  What is correct spelling of your first and last name?

At that point I hung up.  I had already fibbed about having credit card debt just to keep her talking and wasn’t fast enough on my feet to make up a name, address, etc.  Next time I’ll have a fake name and address ready so I can dig further.

I did a search on Universal Card Services online and did find a reference on the Business Week site:

“Universal Card Services, LLC, was formerly known as AT&T Universal Card Services. The company is based in Jacksonville, Florida. As of April 2, 1998, Universal Card Services, LLC operates as a subsidiary of Ctibank South Dakota N.A.”

According to the Business Week site the company is located in Florida. The calls I’ve been getting have been coming from a 419 area code (Ohio) but of course they could still be coming from a Florida based company.  It could also be that some other company is falsely using the name of Universal Card Services just to cover their spammy phone calls.

They’ve called the last three months in row so I imagine I’ll be getting another call next month and I can dig deeper to find out who they are and what they’re trying to sell me.

The new credit card rules that were signed into law as part of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act a few months back will certainly offer some help to consumers in their effort to manage credit card debt.

Before we cover some ways that the new bill can help you with payment policies and interest rates, we have to remind you of one thing. Although the new rules will change the way credit card companies increase interest rates and set their payment policies you still want to pay off your credit card debt as soon as possible.  Recent changes to the major credit score system, FICO scores, penalize cardholders who keep high balances on their cards more extensively than before.

Good news for parents worried about their kids and plastic

According to United College Marketing Services, a company that markets credit cards to college students, the average college student receives between 25-50 credit card solicitations per semester. 

The new law will, among other things, keep credit card companies from offering free merchandise to college students in exchange for signing up for a credit card account from an offer made on or near campus. It will also keep issuers from sending new cards to students who haven’t actually applied for cards.  Hopefully this will reduce student debt and be a good thing for college graduate credit scores.

More time to pay

The law states that issuers will have to give customers “a reasonable amount of time” to make their payments on monthly bills. When the law goes into effect, cardholders will now have due dates at least 21 days after they are mailed or delivered.  The current requirement is only 14 days. 

Double-cycle billing to end

Some issuers actually calculate finance charges for a current month’s bill based on days in the previous billing cycle as well as the current one, which racks up the finance charges. That will stop once the new law starts.

You might see your rate go up, but at least you’ll get notice

In the first year you have a card the credit card company needs to give you all the terms that will apply to your card in that first year, and they’ll have to hold your rate steady unless you’re more than 30 days late in making payment.

For any card account held after that one-year anniversary, issuers can raise your interest rate as long as they give you 45 days’ notice and any increase can only apply to new balances recorded after the start date of the new rate.
 
Your payment will go to high-interest debt first

If you have credit card balances at different rates on a single card, your payments are typically applied to the lowest-rate balance meaning your higher-rate balances will continue to accrue interest at that higher level.

Once the law kicks in, the credit card companies will have two choices – to either apply your payment to the highest-rate balance or to divide the payment proportionally to each rate level. It might be worth a call to your issuer after the law becomes effective to find out which system they’re using.

More disclosure on minimum payments

If you’re making only minimum payments on credit card debt, it’s like keeping your balances frozen indefinitely. Credit card issuers will have to tell cardholders how long it would take to pay off the entire balance if users only made the minimum monthly payment.

Issuers must also provide information on how much users must pay each month if they want to pay off their balances in 36 months, including the amount of interest.

Fee relief for subprime cards

Credit cards awarded to people with subprime credit typically offer low spending limits with very high fees to the extent that some users may spend half their balance on fees alone. Under the new law, the initial fees can be no more than 25 percent of the card’s credit limit, and in the first year, no more than 50 percent of the original credit limit can be used to cover fees.

Keep in mind that these provisions will likely come as a cost to more conservative users of credit. To make up the shortfalls in revenues these changes will bring, experts expect issuers to raise annual fees and cut back on credit card rewards programs, particularly for customers who pay off their balance each month.

This post about the new credit card regulations is produced in association with the Financial Planning Association (FPA), the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning.

When I went to recycle an old box of Honey Nut Cheerios last night a small silver package fell out of the container.  Now I’m sure my wife would have just thrown it away without opening it but I’m a sucker for free stuff (even if it’s a toy in a box of cereal) so I peeled open the plastic.  I was certainly surprised to see what was what looked to be a Discover credit card! 

I flipped the card over and read the back; turns out it’s a cash card, ours is loaded with $5.  I went to the website listed on the back and typed in my card number and special code to activate it.  According to the instructions, it can be used anywhere Discover is accepted.   It says to have the cashier ring up the card as credit, not debit. Apparently one in 10 boxes of certain General Mills cereal has one of the “prizes inside” and the amounts range from $5, $10, $20, $25.

I’ve never gotten a credit card in a box of cereal before, I’m used to seeing cheapy little toys that end up getting stuck in the vaccuum cleaner, so this was a cool surprise.  It’s only $5 but it’s enough to buy another two boxes of cereal : )

Have a good weekend, here are some money articles you might want to check out:

• Frugal Dad has some car maintenance tips
• Lazy Man’s wife shares a sad story about her parents
• Generation X takes a reader question about credit as an emergency fund
• The Digerati Life looks at a sane way to plan a wedding
• Million Dollar Journey has some tips on simplifying budgeting
• Brip Blap ponders financial behavior
• Suns Financial Diary takes a look at credit reports
• My Dollar Plan says goodbye to Microsoft Money