Latefee Avoidance

have the same due date for your monthly payment for all of your credit cards, to enable you to write all of your checks at a single check-writing session each month;
even though this does bunch up your payments, you can always make a minimum payment on one or more credit cards, if necessary, and later make the remaining payment to eliminate your outstanding balance, if so desired;
sign up with this website to receive a monthly notice by email for each of your credit cards and every other monthly obligation that could turn into a late charge, such as department store accounts, automobile and truck loans or leases, equipment leases, small or personal loans, bank loans, home mortgages, chattel mortgages, rent, maintenance, other contractual obligations, life insurance payments, telephone company payments, utility payments, monthly parking, copier lease, postage-meter use or lease, or as to one-time situations, such as payment of a parking ticket, showing up for a court appointment or for a medical doctor or dental appointment or payment of sales or income taxes or withholding - no show fees (better suited for a one-time notice);
make it a point with yourself not to let the bastards cheat you through levying any late fees on you, by using the monthly and one-time notices ordered by you to remind you to make the necessary payments on a timely basis; there are many situations in which greedy businesses and governmental agencies are hoping that you fail in the obligations they impose on you, and you should manage these potential losses to prevent loss and to deprive the greedy bastards of the profit they expect from their position in which they can force you to pay outrageously high late fees;
select one credit card carefully for a specific purpose (such as making purchases), as the best one for such purpose and have all of your purchases made with such card, and make sure that you have a minimum monthly payment, on a timely basis, made automatically from your bank account, so that there is no possibility of any late charge at all;
try not to have all of your credit cards together in such a way that you pull out one of them at random, and wind up using all of your cards by the end of a month, with the result of receiving as many credit-card statements during the month, thereby increasing your risk from 1 late fee to any number of late fees; (vi) terminate unwanted credit cards (but only do so after making sure you won't need the borrowing potential represented by any of such cards); you may want to put such cards on personal hold, without telling the credit card company, but not actually cancel the cards that have a borrowing potential you may need in the future (to tide you over, for example, if you lose your job or business).

Q2. Which credit card is best for consumers?

A. Credit cards vary with their fees and conditions; they are set to extract more and more money from "poor risks", who turn out to be the better customers of credit-card companies, because the "poor risks" wind up paying higher fees and wind up as more profitable customers than the credit-card holder who doesn't use his/her card at all (especially since many credit cards no longer have an annual fee) or makes a few purchases each month and pays the balance off in full each month ON A TIMELY BASIS, so that no late fee can be charged; you should use the website option "Credit Card Analysis" to lead you through the extraction of the information you need from the most recent monthly statement for each of your credit cards (and don't forget to verify this information each month), then print out the option to send you the printout of the information by email, and then study the information, to select the best card for making purchases, the best card for obtaining cash advances; the best card to use for obtaining rebates on all or certain types of purchases; the best card for late fees (i.e., the card with the lowest late fees); the best card for giving you the longest time between receipt of the monthly statement and the last full day on which payment can be received by the credit-card company; and the best card for allowing you to make payment online (at lowest cost) if you failed to send a check early enough to meet the credit-card's deadline. No one card will come out on top as to all of these factors. Only a credit card from heaven could be expected to be the best as to all of these categories of reaching into your pocket for extra money over and above the charges you make. So, select the best card for whatever categories are most important in your planning, and plan not to use the others.

Q3. Why should I be selective in using my credit cards?

A. The answer is that you can save (or make) hundreds or even one or more thousands of dollars each year by using the right card for the right purpose. See the answer to the preceding question.

Q4. Does it pay to move credit card debt from one card to another?

A. The answer depends. Certainly, if you are being charged a very high interest rate by your present card with the outstanding debt you would save money by moving the debt to a card with a lower interest rate. Make sure you understand and can compare interest rates, and that you are not dealing with apples and oranges when comparing announced rates; the other problem is called "bait and switch", make sure that you are not given the lower rate for 1-3 months and then are going to have your interest increased to a rate higher than you are now paying; also, you may be getting a promised lower rate because the credit card company plans to take your money from you in other ways, such as by late fees or cash advance transaction charges. There are no free lunches. You merely have to look for the hidden menu including the price per item and make your choices based on information and experience.

Q5. Should I have multiple credit cards?

A. Absolutely, if for no other reason than to have the ability to borrow substantial amounts of money if needed, such as to start a business, or to pay tuition, or to take advantage of some great bargain (new car, distress real estate, or other cash purchase at a great discount); also, you may need to use different cards to buy gas (to get a maximum rebate), for other purchases (to get a lower rate of interest) or to obtain cash advances (to avoid any cash-advance transaction fees), just to name some of the possibilities.

Q6. What are the most important things to consider when selecting a credit card to use?

A. If you have late fees under control (by use of the notification procedure offered by this website), your main concerns should be the interest rate on purchases, the annual fee if any, the interest rate on cash advances and any cash-advance transaction fees, and any rebates or discounts that you could receive by use of the card.

Q7. What consequences could there be for me if I lie about my income when making application for a credit card?

A. You could go to jail for fraud. Applications to banks for credit (which normally would include credit-card applications) are dangerous for persons who lie about their income. It is a violation of federal criminal law to make a material false statement to a federal financial institution when applying for credit or a loan. This only comes out, however, if you don't pay back the money borrowed. Although it appears easy to get a credit card through lying, and you may get the credit, but you may have to fight criminal fraud charges months or years later, even if the fraud had nothing to do with you inabilty to pay back the moneys borrowed.

Q8. What happens with non-use of a credit card?

A. You will probably get a lot of mail asking you to accept more credit cards; you will get a lot of blank checks that you could fill out and deposit in your account (perhaps you should call the credit card company first to ensure that the check would be honored if deposited by you); you would get various offers as a member of a list of credit card holders in good standing; and credit card companies are now talking about imposing a non-use fee to make up for the annual fee that they eliminated in many cases, because of their ability to impose late fees, higher interest rates and cash-advance transaction fees on the customer. Now, the credit-card companies want to have their annual fee, and can get it from non-users by charging a non-use fee.

Q9. What is a credit-card company's feeling towards a holder that is habitually late in making payment on his/her monthly statement or has a steadily increasing outstanding balance by the end of each month?

A. Pure delight. As long as the card holder keeps paying the late fees and high interest rates, the credit card company is content in having the outstanding indebtedness. In fact, it wouldn't care if you had to rob gas stations to make the monthly payment, as long as you did not get caught (and be unable for a few years to make any further payments).

Q10. What is the worst credit card company from the user's standpoint?

A. Without even looking at your monthly statements, the probability is that the worst three are, not necessarily in this order, BOA/MBNA, Citigroup, Chase/Banc One, the three largest issuers of credit cards, and the companies that charge credit-card holders the highest rates of interest, the highest late fees and the highest transaction fees, and give holders the least number of days to pay before a late fee is charged. There may be other cards that belong among that top group of 3, but maybe not.

Q11. Why should I use any of those 3 types of cards?

A. Because they are giving them away, you are taking them, and you may not have any other cards to choose from.

Q12. Which part of the credit card company's operations produces the highest profit margin?

A. I would guess that imposition of late fees on hapless customers is the highest, because there is no service provided by the credit card company when it obtains the fee. The $30 to $40 late fee is a one-cent cost of moving data from one data processing file to another, with the result that $30 to $40 comes out of your bank account and goes into theirs.

Q13. How important are credit cards to the average American family?

A. Because banks do not lend money (at 6% to 10% true annual interest) to anyone unless they can prove they don't need the money, Americans have had to resort to high-interest small-loan companies and more recently to even higher-interest credit cards to obtain credit, with true annual interest running above 100% or even 1000% in many instances. The average American family may have $20,000 in credit card debt, and is unable to pay the debt off. In fact, the debt is increasing because of lower employment opportunities, and credit-card limitations are being reached, with many bankruptcies taking place. The current administration sought and got a bill enacted into law making it more difficult to eliminate credit card debt when filing for bankruptcy. Such onerous amendments became effective on October 17, 2005.

Q14. What type of protection to credit-card companies has the Congress given which protection is not given to other businesses?

A. I can think of two right away: (i) possibility of jail time for anyone that lies on his/her application to do business with the credit-card company, which statutory protection is not given to other businesses; and the inability of credit-card holders to extinguish their credit-card debt when filing for bankruptcy; the credit-card debtor now has to work off a portion of the indebtedness, which means that the bankruptcy laws are no longer applicable to credit-card debt. I'll have to look up to determine whether credit-card indebtedness is treated differently than, say, indebtedness to a landlord. One thing comes to mind, which is that when a corporation files for reorganization type bankruptcy, it is able to cast aside its obligations under leases, which means that the corporate debtor is able to completely wipe out its obligations to its numerous landlords. I wonder why this provision was not changed when the bankruptcy laws were made more onerous for human beings.

Q15. Does my home state have any authority to regulate the major credit-card companies?

A. Federal law allows credit card companies to be governed by the state of their choice, even as to transaction with customers residing in any of the other 49 states. The reason given for this is that state regulation would require a major corporation to comply with 50 different state legal requirements, and that it would be easier for these major corportations to have to comply with the laws of only one state. South Dakota (followed shortly thereafter by Delaware) passed laws virtually exempting credit-card companies from regulation and enabling credit-card companies located in such states to charge any interest they wanted. Later, Arizona, New Hampshire, Utah and Virginia enacted similar laws. Your credit-card statements will reflect the following home states: American Express - Utah; Bank of America - Arizona; Capital One - Virginia; Citi Cards - Nevada; Direct One - Arizona; MBNA - Delaware; Providian - New Hampshire; Capital One - Arizona; of course, with the frenzy in mergers and acquisitions, there is the expected shuffling of the cards, with credit-card issuing companies winding up in different states.

Now, all major credit card companies are regulated by no significant regulation and are free to do pretty much anything they please, as to rates of interest, amount of late fees, amount of cash-advance transaction fees, number of days or hours in which a card holder is required to pay to avoid a late fee. Your state is very limited in what it can do (either because it gave up regulation in order to attract processing jobs, or it maintained regulation and regulatory jobs to regulate nothing). I suggest that actions for fraud and misrepresentation, based on state statutes prohibiting fraud and consumer fraud (with relaxed pleading requirements), and possibly unjust enrichment, be considered as the main sources of regulation by the other 44 states, and by the town attorneys general in each of the nation's 18,500 towns and villages. See Town Attorney General Website.

One last comment: years ago, when banks were pushing for laws allowing them to open up branches in states other than their home state, I don't recall anyone mentioning that the branch-banking bills (to allow banks to open up in other states) would lead so quickly to the elimination of the state usury laws. I don't recall a single bank or legislator receiving campaign contributions from a bank suggesting that branch banking would mean a license to steal money from 300 million Americans.

Q16. Can a class action be brought against credit card companies?

A. Normally, you would expect that credit-card companies (mainly banks, except for American Express and Discover) are so powerful that they have little to worry when it comes to class actions. But they aren't as powerful as Wal-Mart, apparently. During 2003, Wal-Mart and Sears brought a class action (on behalf of millions of retailers) against Visa and MasterCard alleging that there was an illegal price-fixing conspiracy to charge as much for debit card transactions (where there is no risk, because the money is taken directly from a bank account) and credit-card transactions (which have an obvious element of risk of non-payment). Apparently, the federal Sherman Act is of greater regulatory impact than the federal law allowing credit-card companies to be regulated by the state of their choice. The 6-year old Wal-Mart/Sears class action was settled on the even of trial for an astronomical sum - $3 billion ($1 billion paid by MasterCard, the first to settle; and $2 billion by Visa, after deciding that it didn't want to be the only defendant at trial).