Finance

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Spoof of New Credit Card Law

The second phase of the Credit Card Accountability, Responsibility and Disclosure Act (CARD Act) goes into effect today.

In the past few months, however, credit card issuers have been busy making fine print changes to their rules before the reigns tighten, as this satirical video points out. [ Direct link to video if box below is blank, but in Windows 7, you must use the 32-bit version of Internet Explorer or Firefox.]

*MOUSE PRINT:

You can be sure that credit card companies will find new and clever fees and loopholes in the law to help offset any loss of revenue suffered as a result of the new rules. Keep your eye on those fine print notices!

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AMEX Gift Cards: No Monthly Fees… but

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American Express had good news for shoppers a few months ago when it announced that it was no longer going to charge monthly maintenance fees or dormancy fees on gift cards that previously were imposed after one year.  That truly was a bold and welcome move, considering other gift card issuers continue to charge as much as $2.95 a month after a year, thus depleting the card’s value.

What American Express didn’t say so loudly, is that it will continue to charge other rather high fees associated with buying the card.

*MOUSE PRINT:

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There is a purchase fee of $3.95, and a shipping fee of $5.95. Considering the card could have been sent for a mere 44 cents first class, the nearly six dollar shipping fee is exorbitant. On their least expensive $25 gift card, it costs you nearly $10 in fees to buy it, thus in essence reducing the value of the card by 40%.

In the holiday spirit, however, AMEX is making a special offer via email:

Our NEW American Express Gift Cards for the holidays make great gifts this season. As a special offer to you, they are FEE-FREE through 1/31/10. Don’t delay! Order online by December 22 11am EST to ensure your Gift Cards are delivered before December 25.

American Express Gift Cards are 100% Gift, 0% fees:
• No fees after purchase
• No customer service fees
• No lost value

While you will save the $3.95 purchase fee when entering the coupon code EMDECCM, it appears the $5.95 shipping fee still applies.

Ho, ho, ho.

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Good News Creeps into Credit Card Increase Notices

“Important Account Price Change Notification” was the title of the letter that American Express sent to certain cardholders last week. “Change”, of course, is usually a euphemism for “increase”. And this letter was no exception.

They were announcing three rate increases: on finance charges for cash advances, on finance charges that have a penalty rate on them because of a late payment, and on late fees. The latter, incidentally, is going up to $39 on previous balances of $250 or more.

The last item was a shocker, however.

*MOUSE PRINT:

Effective with billing periods that begin on or after October 1, 2009, the Over-limit Fee subsection of the Other Fees section of your Agreement is deleted.

Wow… no more over the limit fees on certain AMEX cards. Hey Citi, Chase, and Bank of America… did you hear that?