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April 25, 2016

Early Withdrawal Penalties Reach New High (or Low)

Filed under: Finance — Edgar (aka MrConsumer) @ 5:47 am

Dave S. recently wrote to Mouse Print* about an eye-opening notice he received from Wings Financial Credit Union when his certificate of deposit matured. It announced a change in their early withdrawal penalties.



Unbelievably, the credit union will now charge two-years-worth of interest on any CD over a year if you withdraw money early. In other words, if you opened one of their 26-month CDs with $25,000 paying 1.00% interest, and decide three months after opening the account that you need the money for another purpose, they will confiscate the interest you’ve already earned and put it toward a total charge of $500 in penalties! You will actually lose principal.

Mouse Print* contacted Wings Financial to question the severity of their new penalties. A customer service representative replied:

…we have had many members express the same frustration. We are awaiting Board approval to reduce the penalty…

This credit union is not alone in jacking up early withdrawal penalties. Gone are the days of the simple three months loss of interest for early withdrawals. Even MrConsumer’s own credit union is clamping down.


USAlliance terms

Here, the penalty is only a year of interest. How generous of them.

We’ve always thought of credit unions as being very member-driven, and offering better rates and terms than the big banks. That apparently is not always the case.


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April 18, 2016

Citi’s New Credit Card Fine Print Improves Benefits

Filed under: Finance — Edgar (aka MrConsumer) @ 5:55 am

Citi Double Cash CardOn April 17, Citi sent out an email to holders of certain credit cards announcing “Important information about your card’s protection benefits.” Uh oh, you know what that usually means. But for once that notice from a credit card issuer announcing a change in terms had good news for cardholders, reversing an industry trend.

Buried in the linked detailed brochure are these generous improvements in benefits:


“Citi Price Rewind,” the card issuer’s name for their price guarantee (if an item is advertised for less within 60 days, you get back the difference) now will cover price differences up to $500 per item instead of just $300, and the maximum total claim you can make per year is more than doubled to $2500.


“Extended warranty” which previously doubled the manufacturer’s warranty up to an additional year, now gives you 24 months of extra protection even on manufacturer’s warranties as short as 90 days. This is a HUGE new benefit for shoppers.


“Return protection,” which provides that the credit card issuer will buy back an item you want to return if the seller will not accept it, increases from a protection period of 60 days after purchase to 90 days after.


“Trip cancellation and interruption coverage” which provides a refund of certain travel purchases if unforeseen events occur, is substantially expanded. The old policy only covered $1500 of expenses per year. The new policy covers up to $3000 per trip. The new policy also greatly expands the definition “family” to even include a family pet that may have a life-threatening illness.

There are many additional changes in contract language in the new set of benefits compared to the old.

A few words of caution: this list of benefits is not all-inclusive, and does not apply to all Citi credit cards. At a minimum, it does apply to the Citi Double Cash card. These new benefits go into effect on May 15, 2016.


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November 23, 2015

Chase Ups Credit Card Costs But Does So Transparently

Filed under: Finance — Edgar (aka MrConsumer) @ 6:31 am

How many times have you gotten a notice from your credit card issuer announcing “changes” to your credit card agreement but you can’t quite figure out exactly what they’ve done?

Most times, they simply announce that your new APR is so and so, or the fee for a late payment is $X. Without going back to your original agreement which you don’t have, you have no idea how much more you are being gouged. (We all know that rates and fees rarely go down.)

In a refreshing change, some Chase Freedom cardholders last week received a huge 10.5″ by 17.5″ notice about “important changes to your acccount terms.” Here is what made it even more remarkable.

Very large *MOUSE PRINT:

Chase terms
Click to enlarge

They actually show you, side-by-side, what the old terms were and what the new terms will be. It certainly doesn’t convey good news, with finance charges jumping over five percent, and late fees going up as well. But, at least the cardholder wasn’t left in the dark about what exactly they were doing. A big hat-tip to Chase.

On the other hand, why Chase was raising rates wasn’t quite as clear:

The changes to the Annual Percentage Rates (APRs) described below are to standardize these terms for cardmembers who have the same type of account.



• • •

October 5, 2015

Small Business Saturday Stunner

Filed under: Finance,Retail — Edgar (aka MrConsumer) @ 6:34 am

Shop SmallSince 2010, American Express has promoted the Saturday after Thanksgiving as “Small Business Saturday.” It is designed to get shoppers to “shop small” and patronize small retailers across the country, particularly those that accept the American Express card.

As an inducement from the very beginning, AMEX has offered their cardholders a $25 statement credit if they spent at least that much at a participating store. In 2013, they dropped the rebate to a mere $10, but made up for it last year by offering three $10 credits if one shopped at three different stores.

That was then, and this is now. For 2015, the company quietly dropped a bombshell on bargain hunters. Buried in a set of frequently asked questions, was the news.


Small Biz Saturday

No statement credits this year.

It was great while it lasted, but it had to have cost the company millions and millions of dollars. It was one of the most generous promotions that any cardholder could take advantage of once a year, and it will be missed.


• • •

September 15, 2015

Credit Cards Cutting Back on Benefits

Filed under: Finance,Retail — Edgar (aka MrConsumer) @ 6:16 am

  Consumers who ignored the flurry of “update” notices sent by a number of credit card issuers this summer may be in for a rude surprise this fall when some longstanding benefits disappear from popular credit cards.

For example, collision damage waiver, and half a dozen other travel and purchase benefits including 2-5% back in points at Sears and Kmart will be removed from the Sears platinum MasterCard issued by Citi as of October 1. Bank of America is eliminating five benefits on its Better Balance Rewards MasterCards as of November 1. And Discover, as of last month, removed from its cards benefits for lost or delayed luggage, travel insurance, and emergency roadside service. (See chart below.)

“Credit card issuers have used a host of benefits to attract customers to their cards, but now they are quietly removing many of them,” explained Consumer World founder Edgar Dworsky. “Some customers may be in for quite a surprise when they go to use one of these benefits but only then discover that it no longer exists.”

Most of the MasterCard changes were made by the card company itself last year for their standard, gold, and platinum cards, but the cuts are only being implemented now by some individual banks. MasterCard says it evaluated which benefits cardholders preferred and actually put to use for everyday transactions in deciding what set of core benefits to offer and which to drop. For these basic cards, the new core benefits funded by MasterCard only include Extended Warranty, Price Protection, Identify Theft Resolution, and lost card services. Individual banks can supplement the core benefits with other perks, or even buy back deleted ones.

A Visa spokesperson said it had no plans to reduce benefits on its cards. AMEX did not respond to inquiries.

At the same time that they are reducing benefits, some of the card issuers say they are adding or improving some perks. For example, FIA Card Services, a unit of Bank of America that issues credit cards for Fidelity Investments, is expanding its “extended warranty” benefit on certain cards. Starting in November, it will double a manufacturer’s warranty up to two additional years (up from one year) for warranties of 24 months or less.

Sears MasterCard claims that as of October 1 it is improving “Extended Warranty” and “Price Protection” on its platinum cards, but PR representatives at neither MasterCard nor Citi could provide any details of the enhancements.


Credit Card Benefits Changes Summer/Fall 2015
credit card benefits

Before making a critical purchase, cardholders are urged to check with their card issuer to ensure that a particular benefit traditionally associated with their card is still in effect. For example, don’t assume you still have automatic collision damage waiver protection when renting a car, counseled Consumer World.

Upper tier cards like World MasterCard, World Elite MasterCard, and Visa Signature tend to offer more benefits than basic cards. Many of the eliminated benefits are still available on them and on many basic cards that have opted not to adopt the changes (yet).


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