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Credit card rates rising

Issuers see window of opportunity to make changes before the new law

By Ruth Susswein

If you’ve opened a credit card statement in recent months, you may have noticed a jolt in your interest rate or a spike in fees. Maybe your minimum payment has shot up a few percentage points, making your monthly bill much harder to meet.

These changes don’t apply only to those with imperfect payment histories. Often they apply to even the best of customers. Currently, card issuers don’t need a reason to raise your rate.

“Our Capital One rate went from 5.9% to 15.9% and the Chase card rose similarly by 10 [points],” a Gainsville, FL couple told Consumer Action. “We’re puzzled by the behavior of banks ... that have opted to penalize customers who pay on time, pay down their balances, and have a great credit rating.”

Consumer Action’s 2009 Credit Card Survey finds that lenders have boosted rates, compared to last year, on purchases, cash advances, and, in some cases, on default APRs. The most recent increases were made between March and June of this year, after President Obama signed a new law that would restrict some of the card issuers’ most anti-consumer practices. For now, card issuers have a window of opportunity to make changes before the law takes effect next February. (A few provisions go into effect this summer.)

Recent rate hikes

Bank of America (BofA) has added 3.25% to its minimum APR for purchases (6.99% jumped to 10.24%) and 4.25% to its cash advance rate (and raised fees) on its Platinum Plus Visa card. BofA has also raised the cash advance rate and tacked three points on its Platinum Plus Cash Rewards’ purchase APR, and its Accelerated Rewards American Express card.

Capital One tacked two points on the cash advance rate for its No Hassle Miles and Standard Platinum cards.

Also between March and June, Citibank has increased purchase APRs on three cards we surveyed by up to three-and-a-quarter percentage points.

US Bank raised its purchase APR by two percentage points (rates range from 9.99%-22.99%) on its Visa Platinum and Travel Rewards Visa Platinum cards. The cash advance rate also jumped two points to 22.99%.

Wells Fargo boosted its cash advance rate by a little less than two points (1.84%) and bumped its purchase APR up one percentage point on the Cash Back and Platinum cards.

Penalty rates

• Capital One has added an extra 6.25% to its penalty (default) rate, on the Standard Platinum and No Hassle Miles cards, bringing the new rate to 29.4%.
• For customers hit with a penalty APRs at US Bank, there is a one point increase to 28.99% on all three cards surveyed.
• Chase increased its penalty rate by almost three points (to 29.99%) on its Perfect Mastercard, between March and June ‘09.

Credit card issuers seem determined to take full advantage of their ability to hike interest rates and fees “anytime for any reason” before it becomes a good bit tougher when the new credit card law takes effect next February. While lenders will retain the right to raise rates and fees once the Credit Card Accountability, Responsibility and Disclosure (CARD) Act takes effect, they will no longer be able to apply that increase to your balance. (For details on New credit card law.)

Credit CARD Act author Senator Christopher Dodd (D-CT) and Senator Charles Schumer (D-NY) have railed against these rate increases and called on the Federal Reserve to impose an “emergency freeze” on rate hikes. The Fed has taken no action.

What’s happening?

Cardholders with variable rate cards haven’t received the full benefit of the drop in the Prime Rate. (The prime rate is the index most credit card issuers use to set variable rates.)

The Prime Rate has actually decreased two percentage points in the past year, from 5.25% to 3.25%. Consumer Action’s Credit Card Survey shows this year’s average variable interest rate interest rate is 13.20%—only one percentage point lower than last year even though the Prime Rate has dropped two points.

Lenders have said they will lose tens of billions of dollars in penalty interest income when the new credit card law takes effect. They also say they’ll lose money when payments are applied more equitably under new payment allocation rules. Any amount above the minimum payment will be applied to your highest rate balance, which will save cardholders finance charges.

Making up losses

The changes, and the fact that credit card delinquencies are at record highs, are prompting companies to look for ways to make up for present and future lost revenues. Some issuers are hiking rates across the board while others are raising rates and adjusting terms for specific customers. The companies run the danger that new terms will make cards so unaffordable for some people that they may not be able to repay their balances and cause even greater losses.

A cardholder’s dilemma

Tempting as it may be to tell your card issuer goodbye, be aware that closing your accounts might hurt you in the long run.

Weigh your options. Do you have other credit cards to turn to without nearing your limit? These days if you’re using more than half of your credit line you risk seeing your interest rate rise because you may be considered a greater credit risk. What’s more, if you close older accounts, or cut down on your overall available credit lines, your credit score could drop, again raising your credit risk.

Keep an eye on terms and fees. Read all material from your card issuer. While some might be junk, you could miss an important, time-sensitive notice. If your rate is headed up, you may want to use another card. (Watch for rate changes on your spare card, too.)

Pay on time. Now more than ever be sure to get your payment in before the due date.

Sign up for ‘e-alerts’. Put lenders to work for you with email reminders when you near your due date or credit limit. You can do this by creating online access to your credit card account and signing up for e-alerts. Online access can also help you monitor your account to make sure your monthly charges are manageable.

Don’t forget to negotiate. While some lenders have no sympathy for cardholders who complain that a higher rate is too much to handle, others are willing to reduce your rate, at least temporarily (six to nine months). This does not apply to all customers, but it’s worth a try.

Fees go up, up, up—and some have no limits

By Ruth Susswein

Savvy cardholders know that just because a credit card issuer offers a 0% balance transfer deal, it doesn’t mean that the transfer is free. Balance transfer offers usually come with a fee—typically 3%. That’s $30 on every thousand dollars you transfer. Cash advances also usually carry a 3% fee, in addition to a pricey interest rate that starts accruing immediately on the money you were advanced.

In its 2009 Credit Card Survey, Consumer Action found cash advance fees as high as 5% (Iberia Bank Classic Visa).

While reviewing and analyzing the data we collected between March 4 and May 20, we found that some of the surveyed institutions had made increases in the interim.

Bank of America’s Platinum Plus Visa card now has a 5% cash advance fee (4% for direct deposit and convenience check cash advances). That fee shot up from 3% in March. The BofA Cash Rewards Platinum Plus Mastercard and the Accelerated Rewards American Express card also carry the same 5% fee, up from 3% in our findings three months earlier. Iberia bank charges a 5% fee (with a $100 cap, or “maximum”). US Bank Flexperks (replacing Worldperks) raised its fee from 3% to 4%. Other US Bank cards surveyed also charge a 4% cash advance fee.

Last year the fee ranged from 2% to 5%, with Iberia Bank being the only card surveyed to charge 5%.

This year six cards surveyed carried no cash advance fees, down from 2008 when eight cards carried no fees. The cards with no fee this year are American Express Clear Card, Addison Avenue Credit Union, Navy Federal Credit Union, Pentagon Federal Credit Union, First Command, and Pulaski Bank & Trust. (As of June, Pulaski now charges a 5% cash advance fee.)

Minimums and maximums

Consumer Action found that 70% of cards surveyed set no limit on the amount they would charge a customer for a cash advance.

At the same time, more issuers are charging higher minimum fees this year. Card companies are hitting cardholders with at least a $2 to $15 minimum fee to take out a cash advance.

About 40% of cards surveyed this year have a $10 minimum cash advance fee, while only one third of cards carried a $10 minimum in 2008.

Whether you take a cash advance for $100 or as much as $300, 16 cards surveyed will charge you a minimum of $10 to borrow that money. Last year, more cards charged a $5 minimum rather than $10.

Balance transfer fees

Signs of balance transfer fees on the rise can be found at Bank of America where the Platinum Plus Cash Rewards Mastercard and the Platinum Plus Visa jumped from 3% to 4% from March to June. BofA does offer an introductory balance transfer fee of 3%. The Discover More card’s balance transfer fee is also 4%, up from 3% in our March findings. Chase is raising its highest balance transfer fees to 5% in August. Pentagon Federal Credit Union hiked its balance transfer fee to 2.5% from last year’s 1%.

No transfer fee

This year, we found 11 cards with no balance transfer fees from Addison Avenue Credit Union, American Airlines FCU, American Express, Capital One, First Command Bank, Iberia, Navy Federal Credit Union, Pulaski Bank and Trust and Simmons First National Bank.

That’s up from five cards with no balance transfer fee last year.

This year, 24 cards carried a 3% fee to transfer a balance compared to 11 cards charging 3% in 2008.

“If you’ve been able to maintain an excellent credit record you may be able to avoid a balance transfer fee on a new card,” says Linda Sherry, Consumer Action’s director of national priorities.

For those with excellent credit, this year’s survey reveals a few cards from issuers that offer a balance transfer with no fee and a low interest rate. These cards are from First Command Bank, Navy Federal Credit Union and Simmons First.

Of the seven issuers in this year’s survey that cap their balance transfer fees, most max out around $100. However, 21 cards don’t have a cap.

TIP: Some of the same card issuers may offer different fees on different cards, as well as personalized offers you receive in the mail. With fees as high as 5%, it pays to find a teaser rate offer without a fee.

Foreign transaction fees

Consumers who use their credit cards in another country may be surprised to see a fee of 1%-3% of the purchase amount tacked on to their bill. This is called a “foreign transaction” or “currency conversion” fee for purchases made in foreign currency.

In this year’s survey, all but two cards (Capital One and First Command) carried this fee. The fees include a 1% charge that Visa or Mastercard add to convert purchases made in a foreign currency. American Express charges a 2.7% fee, although it is figured a bit differently. The company increases the conversion rate by 2.7% and uses the marked-up rate to convert the charge to U.S. dollars.

Armchair travel fees

Some issuers impose a foreign transaction fee even when you never leave the comfort of your home. If you shop online you may find this fee attached to your next order if the item was purchased from another country.

When asked, “Do you charge this fee if I purchase items online or by phone from a business in a foreign country?” representatives from 12 surveyed cards said yes. They are Amalgamated Bank of Chicago, Bank of America, Chase, Citi, Discover, Everbank, Pentagon FCU, Pulaski Bank and Trust, Simmons First, Town North, US Bank, Wells Fargo. Six other bank reps told us they did not know, or we were otherwise unable to obtain an answer.

”In a global economy where we buy everyday items on the Internet, shoppers using credit cards, and often debit cards, too, can be in for a costly surprise,” says Sherry.

Annual fees

There’s been a lot of talk about annual fees making a major comeback following the passage of new credit card rules that will protect consumers but cut into company profits. Some cards, particularly rich rewards cards, have always had annual fees. This year only eight surveyed cards had an annual fee, ranging from $19 (Navy FCU goRewards) to $150 (American Express Delta Skymiles). However, Chase added a $30 annual fee to its Freedom card in August.

If you opt for a rewards card with a hefty annual fee make sure that you can earn more than you pay. With the Delta Skymiles card, you’ll pay $150 a year, and will need to rack up $10,000 on the card to earn a mere $100 discount on a Delta flight. Unless you’re a big spender you may not even cover your costs before it’s time to fork over another $150!

Nuisance fees

Be on the look out for those annoying yet less obvious fees that are deeply buried in the fine print. For instance, we found that US Bank is charging a $2.50 “account management fee” if you close your account while you still have a balance.

As interest income wanes, be prepared for issuers to tack on fees or hike rates in new ways. Keep a keen eye on what the fine print says before you make a credit card transaction, or it might cost you.

Survey collects facts on rates, fees

Consumer Action examined 39 cards from 22 financial institutions this year, including the top nine U.S. credit card issuers, six low-rate issuers and six large credit unions.

The Prime Rate, upon which many variable interest rate cards are dependent, was 3.25% during the survey. We surveyed the same cards and issuers last year, with the exception of WaMu (now part of Chase) and Amalgamated Bank of Chicago.

Interest rates ranged from 4.25% variable (Platinum Visa, First Command Bank) to 22.99% variable (high rate on US Bank). A “high rate” is the highest rate charged on the card and is dependent on the applicant’s credit history. The average purchase rate of 12.83% was about three-quarters of a percentage point lower than our 2008 average of 13.54%.

The 34 variable rate cards we surveyed averaged 13.20%, about a percentage point lower than the 2008 average of 14.25%—notable because the Prime Rate is 2 percentage points lower than last year.

It appears that some issuers switched their fixed rate cards to variable rates this year. (See the story on Changing terms.)

The five fixed rate cards surveyed this year averaged 10.03%, about two percentage points lower than our 2008 fixed rate average of 11.82%. The range on fixed rate cards is 7.25% (Simmons First Visa Platinum card) to 16% (high rate on Golden1 Federal Credit Union’s Visa Platinum Rewards card).

Annual fees

In 2009, 31 cards, or 79.4% of surveyed cards, had no annual fees. (In 2008, 85% [35 cards] of surveyed cards had no annual fees.) Among the cards with annual fees, fees range from $18 (Navy FCU goRewards) to $150 (American Express Delta Skymiles), with an average annual fee of $62.75. (In 2008, the average annual fee was $43.50.)

Other findings

• Of the 39 cards surveyed, 30 (77%) offered rewards, rebates etc. This is an increase over last year when 68% (28 cards) offered rewards.
• Ninety-five percent of all surveyed cards had late fees—the same finding as in 2008. Two cards had no late fees (American Express Clear and First Command Bank Platinum). The average late fee on the cards with a fee was $28.19—a 9% increase over 2008 average of $25.90. While the top late fee of $39 remained the same, many issuers used tiered fees tied to the cardholder’s balance.
• Foreign transaction fees of 3% are charged on all purchases made in another currency by Amalgamated Bank of Chicago, Bank of America, Chase, Citi, HSBC, Town North Bank, US Bank and Wells Fargo. Four other issuers charged either 1% or 2% foreign transactions fees. Capital One and First Command Bank were the only surveyed credit cards that do not charge foreign currency transaction fees.
• Surprisingly, despite the credit crunch, 17 surveyed cards (43%) offered 0% introductory (“teaser”) rates on new purchases. Most teasers lasted for six months, although American Express and Chase had offers of up to 12 months. On balance transfers, 20 cards (51%) had 0% intro rates. Some balance transfer offers lasted as long as 12 months (Chase, Citi, Discover, HSBC, US Bank and American Express), while Bank of America featured one offer for up to 15 months (Platinum Plus Cash Reward Mastercard).
• Binding mandatory arbitration was required by 11 of the 18 issuers we could get answers from. Discover allowed cardholders to decline the arbitration clause if they notified the bank within 30 days of receiving their cards. (As of July 23, Chase is re-evaluating its use of mandatory arbitration). Four of the seven issuers who said they did not require arbitration were credit unions (Addison Avenue Federal Credit Union (FCU), American Airlines FCU, Digital FCU and Navy FCU. (Others are Amalgamated Bank of Chicago, First Command and Town North Bank).

About the survey

The 2009 Credit Card Survey was conducted from March 4-May 20, 2009 by Sheree Jones and Kristen Ashby students at Virginia Tech (VT). Ruth Susswein of Consumer Action coordinated the surveying. Consumer Action gratefully acknowledges the assistance of the VT team, led by Professor Irene Leech, Associate Professor of Apparel, Housing, and Resource Management at VT.

Consumer Action has compiled a report containing details of all 2009 survey findings. The 2009 report can be found online at our website. On the home page, click on Survey Archives on the black navigation bar at the top of the page.

Credit card terms a changin’ in advance of new law

By Ruth Susswein

From shrinking grace periods to soaring minimum payments, card issuers are making widespread changes to cardholder agreements that are not in the cardholder’s best interest.

Consumer Action’s Credit Card Survey reveals that Discover Miles and Open Road cards come with a boost in the minimum payment if “more than 90% of your balance consists of a special rate balance transfer.” Your minimum payment could double, from 2% to 4%.

If you open one of these cards and transfer a $1,000 balance, Discover’s usual 2% minimum payment of $20 could rise to $40 a month, even though you make no new charges. (Interest charges get added on top of this 4% minimum payment, when the 0% introductory offer expires.)

Chase has told some customers that minimum payments will increase from 2% to 5%.

Consumer Action was told that Chase made this change only for some cardholders who have been making the minimum payment for a long time because the company wants to see these customers pay off their debt.

But the 2% to 5% hike more than doubles a cardholder’s monthly minimum payment. A Chase cardholder from Tampa, Florida, writes that he and his wife will find the new payment unaffordable. (Cardholders who do not make at least the minimum payment due each month are considered to have paid late, even if they send in a payment of less than the minimum. This puts them at risk for a higher interest rate.)

“My wife and I have had a Chase credit card since 1990. We have used it occasionally for large purchases when special promotional interests rates were available. Never have we been late on a payment and always make payments at more than the minimum. This [change] will increase my payment from $250 to over $600 a month! We have excellent credit but a $350 increase a month could put us in serious trouble.”

Chase cardholders who find the spike in minimums too much to handle should call the customer service number on the back of their cards and ask for the “Proactive Solutions” department.

Shrinking grace periods

One card issuer in this year’s survey has nearly eliminated its grace period. Everbank now offers a six-day grace period. Last year, the company had a 25 day grace period.

Pundits are speculating that issuers will do away with the grace period because of the restrictions on interest earnings in the new credit card bill. A grace period allows cardholders who pay their monthly bills in full and do not carry a balance to avoid paying interest. Consumer Action has been noting a move toward shorter grace periods of 20 days.

Last year, more than half of cards surveyed (21) offered a 25-day grace period and six more offered a range of 20-25 days. For 2009, about 48% of surveyed cards (18) still offered a 25 day grace period while just three others gave a range of 20 to 25 days per card.

This year, another 38% of cards had a 20 day grace period. That compares to 32% in ’08. Among surveyed cards, only American Express Clear offered a grace period of 28-31 days.

Bank of America is switching many customers from fixed to variable APRs. Since our 2008 Credit Card Survey, BofA cards surveyed have switched from a fixed rate offer to variable. Consumer Action has heard from cardholders who have had a low fixed rate for more than a decade and are not pleased with the shift.

While in most cases, interest rates will remain the same for now, variable rate cards are tied to indexes such as the Prime Rate and will rise in lockstep with the index. Currently the Prime Rate is at its lowest point in years, and it is just a matter of time until it will rise again. When the rate rises, so does the amount you owe each month if you are carrying a balance.

“We have seen them change from fixed to variable at times in the past when Prime is low,” said Linda Sherry, Consumer Action’s director of national priorities. “Some cardholders seek the predictability of fixed rates, but this year’s survey shows they are quickly disappearing from the marketplace.

No longer fixed

More than half of the surveyed cards (54%) that carried a fixed interest rate in 2008 now offer a rate that varies. Thirteen cards had fixed rates in 2008. Three of the 13 fixed rates are now variable rate cards; four more have introductory fixed rates that expire and shift to variable. (One card’s issuer is no longer in business). That leaves only five surveyed cards in ’09 that carry fixed rates. (Golden1, Navy FCU, Pentagon Federal, Pulaski, and Simmons). After the survey closed, Pulaski changed its offer to a variable rate card.

Sherry noted, “The shift to variable rates places greater risk on consumers. We’ll be watching to be sure card issuers make only allowable changes once this new credit card law is in place.” She invited cardholders to share their experiences with her by e-mail, at .(JavaScript must be enabled to view this email address).

“When people tell us about their experiences, it gives us real data we can use in arguing for consumer protections.”

Brighter times ahead for credit cardholders

By Ruth Susswein

When the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, federal legislation passed this spring to protect cardholders, takes effect on Feb. 22, 2010, card issuers will no longer be able to use some of the anti-consumer tactics they have employed in the past. (A few provisions of the law take effect this month.)

Here are the issuers in Consumer Action’s survey who use practices banned by the new law.

‘Anytime, any reason’

Card issuers frequently include language in their cardholder agreements that allow them to change rates and terms at anytime, for any reason. Currently, some changes in rates and terms require 15 days notice.

Surveyed issuers that state they use this practice: Amalgamated, American Express Blue Cash, Bank of America, Capital One, Chase, Citi, Discover, Everbank, First Command, HSBC, Iberia, Pentagon FCU. (Citi allows for rate changes in some circumstances. See Opting out of changes for details.)

Under new law: No rate increase will be imposed on existing balances but rates can rise on future balances following 45 days notice to the cardholder.

Exceptions: If the cardholder does not make required minimum payments for 60 or more days, a teaser rate expires, or the index tied to a variable rate card changes.

Additionally, interest rates cannot rise for the first year after an account is open, except as specifically stated at account opening. An example would be the expiration of an introductory rate after six months.

Universal default

Some issuers use your credit score or your payment record with other creditors—not just your performance on the card—as a reason to increase interest rates. When the rate increases, the higher rate applies to your existing balance. Currently, no notice of such change is required.

Consumer Action defines universal default as a rate increase made to a cardholder’s account because of his or her record with another creditor. We found language in the disclosures of two banks that indicate they would raise cardholder’s rates because of negative credit history with an unrelated creditor. (See story on Universal default or not?.)

Under new law: No rate increase will be permitted for the first year that an account is open. Additionally, no rate increase is allowed on existing balances because of a problem with another, unrelated creditor, but issuers may still increase the rate on future purchases with 45 days advance notice.

Penalty/default rates

Issuers will increase your interest rate if you are late making a payment.

All surveyed issuers, except First Command, impose a penalty rate ranging from 12.75% (Amalgamated) to 31.99% (HSBC).

Under new law: Issuers still can impose any rate they choose but will have to provide 45 days notice, and will have to “terminate the rate increase” in six months, if subsequent payments are on time.

Penalty Fees

Issuers charge fees, both flat fees and tiered fees tied to the cardholder’s balance, for late payments and for exceeding the credit limit.

Surveyed issuers using this practice: All but American Express Clear card and First Command Bank Platinum card charge late fees. Late fees on surveyed cards ranged from $15 to $39. Over limit fees ranged from from $10 (Golden1) to $39 (Addison Ave. FCU, Chase, Citi and US Bank). AmEx Clear, First Command Bank and Capital One No Hassle Miles cards have no over limit fees.

Under new law: Penalty fees must be “reasonable and proportional to the omission or violation.” The Federal Reserve will issue rules interpreting the mandate. Over limit fees will be prohibited unless you choose to allow the issuer to approve transactions that exceed your credit limit.

Payment allocation

Issuers apply your full payment to your lowest rate balance until it is paid off, regardless of any higher interest rate debt you carry on the card.

Surveyed issuers using this practice: We did not specifically ask this question, however this provision is very common on cards which have different rates on different types of balances on the same card, such as purchase rates, cash advance rates and introductory promotional rates. Some issuers disclose in fine print that payments will be applied to the lowest rate balance first.

Examples:

“We apply your payment to the low APR balances first. You cannot pay off higher APR balances until you pay off lower APR balances.” (Citibank AT&T Platinum Universal card)

“If your account has balances with different APRs, payments are applied to the balance with the lowest APR before any payments are applied to balances with higher APRs. This means that balances with higher APRs are not reduced until balances with lower APRs have been paid off.” (Bank of America’s Accelerated Cash Rewards AmEx card)

Capital One, Chase, Discover, and Wells Fargo also apply payments to the lowest rate balance first.

First Command is the only card surveyed that states it will apply your payment in a consumer friendly manner—without being required to. It applies your payment to cash advance charges before purchases.

Under new law: After meeting the minimum payment, the rest of your payment will be applied to your highest rate balance first, saving you money in the long run as you pay off your balance.

Payment cut off times

It is very common among issuers to require payments to be received by a certain time on the due date that is earlier than the end of the day (midnight).

See the chart below with this story for times that payments must arrive or cardholders will be hit with a late fee—and in some cases a higher penalty interest rate.

Under the new law: Payment must be considered on time if received by 5 p.m. on the due date. (Lenders may decide if Central, Eastern or Pacific time zones apply.)

Due date cut off times

Addison Avenue Credit Union	Midnight ET
Amalgamated Bank of Chicago	4 p.m.
American Airlines FCU	Midnight
American Express	Midnight
Bank of America	5 p.m. ET
Capital One	3 p.m. ET
Chase	4 p.m. ET
Citi	5 p.m. ET
Digital Federal Credit Union	5 p.m. ET
Discover	5 p.m. ET
Golden 1 FCU	2:30 p.m. ET
Navy Federal Credit Union	5 p.m. ET
Pulaski Bank and Trust	2:30 p.m. ET
Town North Bank	5 p.m. ET
US Bank	6 p.m. CT
Wells Fargo	midnight
Source: Consumer Action Credit Card 2009 Survey

Fixed rates

Depending on the card and the issuer, credit cards may be “fixed rate,” which means they don’t change unless you are notified of a change, and “variable rates,” which vary with a designated index such as the Prime Rate.

Issuers: Bank of America and Chase are switching cardholders from fixed to variable interest rates. While for now the rate remains the same, the interest rate is tied the Prime Rate, which is at a historic low. So these cardholders will see their rates rise when prevailing interest rates rise as the economy improves.

Under new law: Upon account opening issuers must disclose how long the rate is fixed and honor the fixed rate on existing balances. The Federal Reserve will decide whether future balances may be switched to a variable rate with 45 days notice.

New credit card law

Many anti-consumer practices are banned

By Monica Steinisch

After years of enduring an unequal relationship in which credit card companies call the shots, cardholders are about to gain some serious clout. New legislation, dubbed the “Credit Cardholders’ Bill of Rights” by supporters, will curtail many practices card companies have long relied on to boost profits and keep consumers in debt.

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, signed into law by President Obama on May 22, 2009, duplicates many of the reforms the Federal Reserve Board adopted in late 2008. But it goes further by broadening some consumer protections and establishing others.

The new law limits how long a penalty rate increase can last, gives consumers a way to avoid over limit fees, requires penalty fees to be “reasonable,” and eliminates most fees for paying your bill by automated phone service or Internet. Most of the provisions in the new law take effect on Feb. 22, 2010.

Consumer Action’s 2009 Credit Card Survey shows that all the top card issuers engage in one or more practices that would be banned under the new law. (See related story Brighter times ahead.) To comply with the new law issuers will have to make major changes in the way they do business. What changes can you expect to see in the coming months? Key reforms include:

• Restrictions on rate increases. Card issuers will not be able to raise a card’s interest rate in the first year a card is opened, except if there is a change in the “index” (such as the Prime Rate), or a promotional rate has ended, or because the minimum payment was more than 60 days late.
• Rate restrictions on an existing balance. Interest rates cannot be increased on a balance except for the reasons stated previously. While you will pay off the current balance at the old rate, issuers can apply an increased rate to future purchases. Any rate increase requires 45 days written notice (effective Aug. 20, 2009).
• Limits on penalty rates. If a penalty interest rate is applied to your account (after being more than 60 days late) the card company must “terminate the rate increase” if you make on-time payments for six months.
• Limits on universal default. If your interest rate rises, based on your payment history on an unrelated account or other reasons unrelated to how you handle the card, the new rate cannot apply to your old balance.
• Limits on fees. Over limit fees are banned unless you choose to allow your account to exceed your credit limit. Over limit fees are limited to one per billing cycle, if the balance is above the limit on the last day of the cycle. Fees to make a payment are banned unless it is expedited (within 24 hours) through a customer representative.
• Reasonable fees. Over limit and late fees must be “reasonable and proportional to the omission or violation.” The Federal Reserve will define “reasonable.”
• Reasonable payment requirements. Bills must be mailed (or delivered) at least 21 days before due, and the due date will be the same day each month. Payment received by 5 p.m. on that day will be considered on time.
• Limit on changing terms (opt out). If a card issuer raises future interest rates, consumers will be entitled to pay off balances under the original terms of the contract, but issuers may require cardholders to pay off the balance in five years or to pay a higher minimum payment (up to twice the original amount).
• Two-cycle billing ban. Card issuers cannot go back an extra billing cycle to charge you interest.
• Fair application of payments. Any amount you pay over the minimum payment must be applied to higher interest balances first.
• Limits on subprime card fees. Issuers will be restricted from charging fees to your credit line if those charges exceed 25% of your credit limit.

Added protections

The new rules also include some provisions that will provide other important protections for millions of consumers. For example, disclosures now must spell out the cost of making only minimum payments, and they must inform cardholders how much they need to pay each month to eliminate their balance in 36 months.

Issuers are also required to get a college-age person’s permission before sending credit card offers. Proof of a way to repay credit card debt, or a co-signer, are now needed before credit may be issued to anyone under 21.

A few of the bill’s provisions will take effect early. As of Aug. 20, 2009, card issuers must:

• Give 45 days notice of most rate increases,
• Give consumers the right to cancel the card and repay at the old terms
• Mail bills 21 days before the due date.

Some traps remain

While the Credit CARD Act does much to level the playing field for card users, consumer advocates say it falls short in some areas. Card issuers still can impose exorbitant penalty rates that currently reach as high as 31.99%, according to Consumer Action’s 2009 Credit Card Survey. Issuers also retain the right to dramatically and abruptly reduce a cardholder’s credit limit, sometimes to the level of the current balance, however cardholders must be given 45 days advance notice.

To avoid the consequences of these and other anti-consumer practices, cardholders should stay vigilant and manage their credit and debt wisely.

• DO know your new rights and when they go into effect.
• DO read all bill inserts and other correspondence from creditors, looking for any notice of changes in terms. If you notice a change in interest rate, credit limit or other key terms, contact the creditor right away to find out why.
• DO make it a goal to reduce and retire revolving debt.
• DO continue to avoid penalty rates and fees. Even under the new law rates and fees are still expensive.
• DO keep balances to 30% or less of your credit limit, pay on time, and whenever possible pay more than the minimum due so you don’t appear to the card issuer to be a risk.
• DO consider obtaining an additional card or two if you currently have just one, in case your card limit is drastically reduced or your account closed. Use the cards from time to time, because issuers are closing inactive cards. (DO pay off the balances on these cards each month.)

For more about the new credit card law, click here.

Rules for opting out of costly changes vary by issuer

By Linda Sherry

Some credit card issuers give you the right to decline a change in contract terms. This is often called an “opt out.” But each company’s opt out is different and under most circumstances, the deal is only on the table for a short time. You must act quickly to accept the opt out.

This year, Chase, Citi, Bank of America and Capital One have notified cardholders of changes in terms. Many cardholders—but not all—have been offered an opt out of some kind. For instance, Chase cardholders whose minimum payments were raised from 2% to 5% were not offered an opt out, but some whose cash advance and default interest rates were raised were offered the ability to reject the change (opt out), close the card and pay off at the old terms.

To make sure you don’t miss an opportunity to opt out of a higher rate, read everything your credit card company sends. Your right to opt out (if any) may arrive on the billing statement, in a bill stuffer or in a separate letter.

Until this month, there has been no requirement that your issuer notify you about a rate increase that results from a default or delinquency on your part. As of Aug. 20, you must receive 45 days notice of many changes in terms, including default rate increases.

New law

Under the new credit card law, (as of Feb. 22) issuers will not be able to change the terms on an existing balance, with few exceptions including when consumers are 60 or more days late in paying. If the terms on an outstanding balance are changed, or if the account is closed or cancelled, creditors must at minimum protect consumers by:

• Structuring the balance to be paid over at least five years, or
• Requiring a minimum monthly payment that is no more than twice the percentage used in the old minimum balance.

Current opt out provisions

Currently, it is up to the issuer whether to allow an opt out, and how that opt out is structured. In some cases, when a consumer opts out of a rate increase, the account is closed. However, on some rate increases that have nothing to do with consumer behavior, Citi and Bank of America don’t automatically close the card.

Consumer Action has learned new details about the way Citi and Bank of America handle your account when you accept an opt out.

On solicitations examined by Consumer Action, Citi states:
When can we change the rates, fees and terms of your card agreement?
We will not voluntarily increase your rates, fees or change other terms of your card agreement until your card expires, typically in two years. At that time we will review your credit history and general market conditions. If we decide to make changes after our review you will receive advance notice and a right to opt out. If you opt out we will close your account. You can then pay the remaining balance under the old rates, fees and terms. (This does not apply to default APRs and prime rate changes.)"

But the details are less transparent and consumers who are affected by a rate increase may find that they are mailed opt out agreements that are somewhat different.

Citi says its keep-the-card opt out provision applies to changes based on “market” or “economic” reasons, but not on cards that are re-priced for risk-based reasons.

Keep the card

If your Citi card terms change for “market” or “economic” reasons and you follow procedures to reject the changes you will keep the card, the account will remain open and no changes will occur until the expiration date. When your card expires your account will be closed.

If you would like the card to remain open, you can contact Citi to inquire about your options. If you have handled the account responsibly, Citi says it is likely that you will be able to keep your card or reapply, but the terms will most certainly differ.

Lose your card

If your credit card is re-priced because you are part of a universe of cardholders who seem risky to the company, you also may opt out of any price increases but you can no longer use the card. You must close the account and pay it off at the old rate.

What types of uses make large groups of cardholders seem risky to Citi? The criteria include customers who use the card frequently for cash advances, repeatedly pay only the minimum monthly payment, max out their cards, or get close to the credit limit.

No opt out

Citi, like other issuers, says that you will not be offered any opt out if you have made late payments, bounced a check, or gone over your credit limit—behaviors that earn you a higher “default” rate. In that case Citi reserves the right to increase your interest rate as high as 29.99%, its current top default rate.

Bank of America

If a Bank of America customer opts out, the account is not closed. According to BofA, the account remains open and the old terms in effect as long as you don’t use the card.

This offer may be attractive to cardholders with a lot of discipline—but those who are more subject to temptation may use the card and thereby subject themselves to the higher rate. For many people this policy may be a “gotcha.”

Capital One

Capital One, which reserves the right to increase “your APRs if market conditions change,” promises you the opportunity to opt out and pay at the old rate. The card will be closed.

Like other banks, Capital One does not offer the opt out on increases triggered by late payments (two within 12 months). But it does make an offer unlike other banks: “If we increase your APRs for late payments, we will return you to your prior non-introductory APRs if you make at least the minimum payment on time for 12 consecutive billing periods.”

As of next February, the new credit card law will require that anyone who receives a higher interest rate on an existing balance (because they have paid 60 or more days late) must be given notice for the reason for the interest rate increase and informed that the higher rate will be “terminated” in six months if all minimum payments are made on time in the interim.

First person: HSBC’s ‘custom fit’ needs ample alterations

By Linda Sherry

For many years, Consumer Action has conducted its annual Credit Card Survey by calling customer service numbers at surveyed card companies. For the past several years, we have encountered roadblocks when we call customer service at HSBC. The company’s policy has been that they will share information with you only after you reveal private information to them.

Representatives routinely tell our surveyors they will not release any card information, even basics like APR, grace period and default rates, until the caller provides highly personal information—including a Social Security number, date of birth and mother’s maiden name, among other sensitive details.

Online, the company follows a similar protocol—little rate and fee information is available until you fill out an application providing sensitive personal information “required to pre-qualify for a credit card offer.”

Its “Credit Card Selector” tool promises that the company will “provide a recommendation for a credit card that best fits your needs before you start the application process. Once you’ve reviewed our recommendation, you can then choose to apply for your custom fit credit card.”

This year, I tried it. But in return for my highly sensitive personal details, I did not get a custom tailored offer. I received the same kind of disclosures that HSBC’s large competitors (American Express, Bank of America, Chase and Citi) post freely on their web sites for all to view. It was not custom tailored in any way—in fact it did not even offer a specific APR, just a meaningless range of possible interest rates and not a word about a credit line. This is my “custom fit credit card”?

Custom offer?

On July 13, I filled out the HSBC pre-qualification application, after consenting to receive my “notice of credit decision or adverse action letter related to this application electronically,” I was given a disclosure statement detailing my “custom offer.” It was a typical credit card disclosure, the kind required by law under the Fair Credit and Charge Card Disclosure Act. It had the grid of required information we call the “Schumer Box” after the Act’s author, Senator Charles Schumer, who was then a House member.

Here is how one of HSBC’s competitors, Citi, describes the disclosure law on its site: Under this Act, credit and charge card companies must provide you with information about their terms. … Card issuers are required to disclose their terms in writing at the time you apply. If a card company offers you a written “pre-approved” credit solicitation, the offer must include these written terms.

And my offer? Far from being customized, it wasn’t even firm. I was offered a card with a 12-month intro rate of 0%, which would convert to a “variable Customary APR of 8.99%, 11.99%, 14.99%, or 17.99%.” The final rate will “depend on my credit worthiness.” Isn’t that why I filled out the pre-qualification application, revealing highly sensitive personal details as the price?

At this point, I was offered a choice, “Submit Application” or “Cancel.” I cancelled.

No credit impact

The company states that declining the offer will have no impact on your credit history or credit score. "Our pre-qualification is risk-free. If you do not like the credit card we offer you, click the ‘No Thanks’ button and no other creditors will see that you inquired with us." Based on our research, this claim appears to be true.

On July 13, just before I filled out HSBC’s pre qualification application, I pulled my Equifax credit score, which My Fico said was “great.” I also pulled it on July 29, and it was exactly the same number, still “great.” The score report noted only three inquiries, ones I had initiated in the past. The score report noted that certain inquiries “do not affect your FICO® score and are not listed here. One occurs when lenders search for consumers that might qualify for pre-approved credit.”

So I pulled my free annual report from Experian, and found the HSBC inquiry of July 13 under “Inquiries Shared Only With You.” “These inquiries do not affect your credit score.”

All this left me scratching my head. In this day and age of identity theft, asking up front for highly sensitive personal identifying information before providing a disclosure required under the law is a deal killer. It’s bound to turn off all but the most desperate card applicants. And to say that “pre qualification” will result in a custom fit offer, when all you get is the usual boilerplate, is misrepresentation of the most infuriating kind.

We asked HSBC why it did business this way. Last year, Cindy Savio, associate vice president for public affairs at HSBC, explained, “During the application process, consumers can review all the specific terms and conditions for the card they qualify for and then choose to accept (or decline) such terms before they agree to finalize their application.”

Savio told us, “HSBC is committed to ensuring that information on card terms is clear and useful for the consumer to make an informed decision... Our ads on our card web sites meet the requirements of laws and regulations...”

In our opinion, the HSBC pre-qualification system completely disregards the spirit of credit card disclosure rules. The bank should be offering specific disclosures before application, not as a price of getting to the application. If the company wants to sell “custom fit” cards then it ought to deliver on its promise.

Beware of outdated credit card information online

By Michelle de Mooy

In today’s economy, the one thing you can count on is change, especially the ever-changing rates and fees on credit cards. Knowing the most current “terms and conditions” for a credit card is an essential way to avoid fees and other unnecessary costs.

Consumer Action’s 2009 Credit Card Survey has found that getting current, accurate information online about a credit card’s rates and fees can be difficult. This year’s survey found that many of the terms and conditions online may be outdated—in some cases, by as much as 2 years.

When you visit a issuer’s website you expect that the information supplied by the company would be up-to-date. Consumer Action was surprised to learn that some surveyed cards bore information from 2008 and even 2007.

Buried in the fine print of the terms and conditions page at Pulaski Bank and Trust, this March, was the following paragraph in capital letters:

“The above disclosures are accurate at the date of printing (12/2007). Pulaski Bank has the power to change the annual percentage rate upon 15 days written notice to the cardholder…because rate and terms are subject to change you may contact us for current information by writing to P.O. Box...” ( In June, Pulaski changed its offer and updated its information to 2009.)

Golden1 Credit Union also seemed stuck in 2007. In March 2009, its online terms and conditions section read, “Information is accurate as of April 2007. It may have changed. To find out call 916-732-2900 or 877-GOLDEN.” (By July 2009 the website had been updated with information accurate as of May 2009.)

“The information about the costs of the cards described in this application is accurate as of Oct. 31, 2008. To find out what may have changed write us at P.O. Box…” That’s what Town North Bank’s disclosure information read in June 2009.

Everbank’s information is also from October 2008. The issuer encourages potential customers to call or write for an update. But when Consumer Action surveyors followed up with phone calls they were given the run around, and told they “would need to set up an account before any questions could be answered about credit cards.” Iberia Bank’s information was accurate as of September 2008.

Chase and First Command’s info dated back to the winter of last year. Chase’s Perfect Mastercard, Platinum Visa, and FreedomSM all directed browsers to the same online terms and conditions assuring accuracy as of December 2008. For the latest information, consumers were instructed to write the bank at a P.O. Box.

“What is the likelihood that a cardholder is going to notice this warning in the fine print and then take the time to write to a lender and wait for a response before making a credit decision,” asks Ruth Susswein, Consumer Action’s deputy director of national priorities.

“These are clear examples as to why why just disclosing information to consumers is not sufficient,” said Susswein. “A warning that information may be stale should not let an issuer off the hook. What’s the downside to providing up-to-date rates, fees and terms?”

Online requirement

The new credit card law coming in February will require lenders to post their information online, but the law does not specify that the information must be up-to-date.

“We are hopeful that the Federal Reserve will clarify this matter to ensure that consumers can rely on the information they find online,” said Susswein.

It’s a struggle for cardholders to know where to turn for reliable, timely and accurate terms. You can call the card issuer but more often than not, you are stonewalled. For those card companies still willing to invest in hiring and training helpful customer service representatives, the latest rate and fee information may only be a call away, but unfortunately our credit card surveyors have learned that relying on answers from reps may leave you very unsatisfied. Frequently, Consumer Action surveyors had to make many extra calls to many issuers just to get confirmation of answers supplied by other reps. (For more on our surveyors’ impressions see "Customer disservice".)

Recently, a New York consumer tried to work with his issuer’s customer service department. He was very distraught about the experience and contacted Consumer Action.

This cardholder sent his monthly payment to the same address he had used for years. Unbeknownst to him, his issuing bank was sold to another institution.

Weeks later he received notice from his new bank informing him that it had not received his payment. He now owed late and other penalty fees in the amount of $135, and his interest rate had been super-sized to 29.99%.

It turned out that the bank had enrolled him, without his knowledge, in paperless billing and had changed the payment address. It was only after Consumer Action intervened on his behalf that the bank agreed to eliminate the fees and return his APR to its original rate.

“Of course, every consumer can’t get this kind of help,” said Susswein. “The days of the customer as king are long gone, and finding basic information that you can rely on to help you decide which card to apply for can be all too tricky.”

Customer disservice

Card issuers evade consumer questions about terms

By Michelle de Mooy

The front line in the financial industry’s assault on consumers continues to be customer service, finds Consumer Action’s 2009 Credit Card Survey.

Consumer Action’s surveyors endured countless phone transfers and hang-ups and remained patient in the face of stonewalling by service reps and application specialists. They encountered widespread ignorance about even the most basic credit card questions. And sometimes our surveyors even faced aggressive and threatening behavior by customer service representatives.

Despite the roadblocks, one surveyor said she believed that customer service agents overall were more friendly and helpful this year.

Twenty-two credit card issuers are represented in this year’s survey. A research team, comprised of Virginia Tech graduate student Sheree Jones (a former telemarketer) and undergraduate student Kristin Ashby, gathered online materials pertaining to each credit card. Then they called each issuer to gain clarification about information in the disclosures as well as to ask for details that are not usually provided in solicitation materials.

From early March through May of this year, surveyors spent hours upon hours calling card issuers, posing as consumers, with detailed questions about select credit cards from each company.

Concerned primarily with turning callers into customers, Bank of America’s customer service representatives were (once again) considered “extremely pushy” by our surveyors, who were told that detailed information was only available to current customers.

Bank of America’s repeated response to Ashby’s carefully asked questions was often “it all depends on your performance” and “information will be included in your welcome packet upon being approved for the card.” According to Ashby, she was told that almost all information not posted on BofA’s website, such as the most current rates and fees, would be included in the welcome packet.

A Citi representative told the same surveyor that he “did not have access to [detailed] information” until an application is completed.

No phone applications

Chase had a big surprise for our researchers this year. Surveyors learned that the company is no longer taking applications via telephone and the company therefore “refused to answer questions over the phone.”

Told by a customer service rep that answers to all her questions could be found online, Jones changed tack. “I told the representative that I did not have online access and he told me I would have to go inside a bank branch and complete an application. He said he did not have any information and there was no one he could transfer me to.”

Jones was further frustrated when she tried to make follow-up calls and got a recorded message stating that the company was only accepting online applications. On the dates surveyors called there was no option to speak to a customer service representative. Jones had the same experience when she tried to gather information on Washington Mutual, now owned by Chase.

Chase’s corporate offices told Consumer Action that in gearing up for the new credit card law, it has changed its application process to an online model. Bank representatives said they will continue to evaluate the model and “develop processes to meet customer needs.”

Quite helpful

Standouts for attentive, helpful customer service included Simmons First, American Airlines Credit Union, and Wells Fargo.

Jones noted that though credit unions overall were responsive, some of them did not have informative websites or online applications. On several occasions, surveyors found it difficult to reach a representative at a credit union because of 9 a.m. to 5 p.m. hours of operation.

Consumer Action surveyors historically have found HSBC to be unable or unwilling to answer detailed questions. Often researchers were given the run around, transferred from department to department and ultimately told that no answers can be given withou an account number.

“Customer service agents said that it is necessary to get the card in order to receive information,” recalled Jones.

After being transferred seven times in one call, an Everbank representative made the same demand.

Credit report required

In one instance, an HSBC rep insisted on pulling a credit report. The representative told Jones that she would not answer any questions unless she was authorized to pull Jones’s credit report.

“She said she wouldn’t pull my credit report if I agreed to give her some additional information,” Jones said. “When I did, she told me they would be pulling the credit report [anyway].” The researcher spent much of the 15-minute phone call trying to get Jones’ Social Security number (SSN) before releasing even the most basic credit card information.

HSBC uses a “pre-qualification” process for applicants that asks for personal information, (including SSN, date of birth, and mother’s maiden name) with assurances that providing this private information will give you access to the actual rate you are eligible for, before you apply. HSBC calls it a “custom fit credit card.”

But that’s not what happened when Consumer Action’s Linda Sherry gave the process a try. She details her experience in a story "First person: HSBC’s ‘custom fit’ needs ample alterations."

Universal default or not? That is the question

Universal default has become a red flag as an unfair credit card term that no card issuer wants to be associated with.

Consumer Action defines “universal default” policies as interest rate increases based solely on the way customers handle their other, unrelated credit accounts such as car loans, mortgages and separate credit accounts. Over the past few years, we have learned that issuers use different definitions of universal default, with many saying that while credit reports and credit scores are sometimes used as a reason to justify interest rate hikes, it is rarely, if ever, the “sole reason.”

This year, we found statements from two surveyed banks, HSBC and US Bank, that say they use credit report information as a reason to raise your rate. When we tracked down executives to ask why their disclosures contain such provisions, both banks said they do not practice universal default. HSBC added that it doesn’t use defaults with other creditors as a standalone reason to increase rates.

Consumer Action (along with many other consumer advocates) believes the practice of raising a cardholder’s interest rate based on his or her payment history with another company is not fair.

The new credit card law does not outlaw universal default but will place some limits on credit report related rate hikes. It will ban them outright in the first year of the account, and will restrict any increases on an existing balance. Exceptions are when variable rate cards fluctuate based on changes to the index or when cardholders pay more than 60 days late.

US Bank’s credit card policy states that your APR may increase “if you fail to make timely payments to another creditor as reflected in your credit report.”

In our book, that means US Bank credit cards are subject to universal default. However, Teri Charest of US Bank media relations told Consumer Action, “We do not have, and have never had, universal default. Universal default is when an issuer automatically and without notice puts an account to its default pricing rate if the consumer defaults on an unrelated account.”

At HSBC, solicitation disclosures note that “we have the right to change your APR, fees, and other terms anytime for any reason including … use of your credit line with us or any creditor, or our financial return.” Again, it sounds like universal default to us—but not to the bank.

Cindy Savio, vice president of public affairs for HSBC-North America, denies that her employer practices universal default. “HSBC does not increase the rate on a customer’s account solely because the customer has defaulted with another creditor,” said Savio. “We may, however, re-price an account based on a change in the customer’s overall risk profile.”

This seems to be a distinction without a difference. We leave it up to you to decide if a lender that has this policy—whatever it’s called—is worth doing business with.

Avoiding any kind of default with HSBC would be a wise move. For the second year running, the bank has the highest default rate (31.99%).

On a $9,000 balance, raising the interest rate from 15% APR to 32% APR would increase the initial minimum payment from $201 to $327, and more than double the amount of interest paid over time from $10,861 to $23,868, if only minimum payments were made and no new purchases were added to the card. (Minimum payments would get progressively lower as the balance is paid off.)

— L.S./R.S

‘Settling’ the debt with your credit card company

By Monica Steinisch

Since last fall, some credit card companies have been showing greater flexibility when it comes to “settling” cardholder accounts, or accepting less than a cardholder’s outstanding balance as full payment. While many card companies have a history of making fee and interest concessions for troubled consumers, they rarely reduced the principal amount owed.

Why the change in policy? One reason is the bad economy. High unemployment means that many delinquent cardholders lack jobs, assets or home equity to pay their balances. As a result, card companies are focusing on collecting what they can right now, before the cardholder files for Chapter 7 bankruptcy.

Another factor is the passage in May of the Credit CARD Act. This consumer-friendly legislation removes card issuers’ ability to raise interest rates on existing balances. With this revenue source drying up, lingering debt becomes far less profitable. (See New credit card law to learn more about the new credit card law.)

Is settling for less than you owe an option for you? It may be, but only if you’re behind in your payments. According to research conducted by Consumer Reports, some card companies are willing to consider settling for 50 cents on the dollar 90 days after the first missed payment, though others will wait longer, and some may not settle at all.

The settlement you’re able to arrange will depend on how delinquent you are and the policies of your card company. Keep in mind that a 50% settlement after six months of missed payments is not necessarily a better deal than, say, a 75% settlement after two months’ delinquency. During those additional four months of missed payments, your debt will grow with late fees, penalty finance charges, and, if you’ve exceeded your credit limit, over-the-limit fees.

Things to know

Opting to pay less than you owe may seem to be a no-brainer, but there are drawbacks to settling. Before you agree to a settlement, here are some things you should know:

You’ll need cash. The card company will expect you to make the payoff in one lump sum or over just a few months. If you have no personal assets to draw on, you’ll need to borrow the money from friends, family or another source. If you pull money from a retirement account prematurely, you’ll pay a 10% penalty and taxes on the withdrawal.

Your credit rating will suffer. A settlement only happens when your account is significantly past due, a status that wrecks your credit score and makes it difficult to get new credit or favorable terms. After you make the payoff, your credit report will reflect the settlement, which is better than a “charge-off” (typically defined as a debt the creditor has not been able to collect for six months). Information can stay on your credit report for seven years.

You may owe taxes. If the amount of the forgiven debt exceeds $600, the card company will report the full amount to the IRS. Unless you were insolvent (your debts exceeded your assets) before the creditor agreed to settle, you will be required to pay income taxes on the entire amount of the forgiven debt. Ask yourself if you’ll have the money to pay your tax bill when it becomes due.

You need to get it in writing. Whether you or the card issuer initiates the settlement, have the company spell out exactly what amount of money is required by what date to settle the debt. Be sure the letter acknowledges that the debt will be satisfied if these terms are met—in other words, you won’t hear from any collectors in the future. Don’t send any money until you have a written agreement.

As you discuss the possibility of settling, be aware that the card company representative will be listening for clues about how much you can really afford to pay and if there might be other options for collecting. Keep personal information, such as your employer or bank name, confidential whenever possible.

Do, however, elaborate on how bleak your financial picture is. For example, if you have debts such as overdue child support or back taxes, or if foreclosure, repossession or bankruptcy is a possibility, say so. (If you consider bankruptcy, do not incur any additional debts. If you do you may not be able to discharge them in a Chapter 7.)

Settlement fraud

Many consumers learn about settlements through ads for debt settlement companies. These companies promise to negotiate settlements with your creditors in exchange for upfront fees that can be 15% or more of the original debt. Some of the companies have even been accused of fraud. Your best bet is to avoid debt settlement firms and work with your creditors directly.

You can contact a reputable, non-profit credit counseling agency to learn more about your options for dealing with debt.

Find a local agency at the National Foundation for Credit counseling website or by calling the NFCC at 800-388-2227.

Check it before you wreck it: Determine your credit level

By Michelle de Mooy

Figuring out how good your credit is feels like looking into a dressing room mirror: seeing yourself in harsh and unflattering fluorescent lights may not be easy but at the end of the day, the mirror probably doesn’t lie.

Taking a look at your financial picture isn’t always fun either, but it can guide you toward better decision-making, and may save your credit score from damage. If you apply for a credit card you aren’t qualified for, it can ding your credit.

During the country’s economic recovery, many expect that new credit will be more difficult to obtain for people with damaged credit. To ensure that you will have access to credit when you need it, improve your credit by paying your bills on time and only carrying balances on your accounts when necessary.

Before you apply for a new card, look realistically at your credit history. Make a list of money coming in and out each month to judge how much new credit you can comfortably afford.

Make categories for outstanding balances (credit cards, retail cards) and loans (mortgage, car loan, student loan), as well as collections or defaults, if any.

If you’ve missed or been late on any payments in the past two years, it will negatively affect your credit. Consult the chart at lower left to get some idea of your current credit standing.

One issuer, Capital One, offers potential customers a way to determine the cards for which they are best suited before they apply. These “self-select” offers are organized by general credit categories, such as excellent, good, average, bad, or no credit, and allow you to browse cards you’re likely to be eligible for.

A credit level chart lets you grade yourself to avoid applying for a card you won’t qualify for, which can hurt your credit score.

Remember, you’ll need good to excellent credit to get a low-rate card.

You can also check your score at www.annualcreditreport.com before you apply.

What’s your credit level?

Excellent/good	Good/average	Bad/no credit
Little to no debt, or your debt is relatively small compared to your income. No late or missed payments on your credit report.	Debt is somewhat high compared to your income. One to several late payments but no failures to pay.	High debt, little to no income, defaults on payments, past or present bankruptcy. No history of credit being taken out or used.

New gift card rules keep on giving

Gift cards, the plastic cards offered by many stores and sold for general use by some credit card issuers, are very popular. The National Retail Federation found that more than half of people it surveyed last holiday season would like to receive a gift card.

But many consumers don’t recognize drawbacks of the cards, such as expiration dates or added fees—especially if you don’t use the cards right away.

In new credit card protections passed this year, Congress saw fit to include some consumer protections for gift card buyers and recipients.

The rules apply to retail cards and general gift cards (bearing Visa, Mastercard, American Express and Discover logos) but not to paper certificates, phone or rewards/loyalty cards.

After Feb. 22, 2010, gift cards are subject to these rules:

• Expiration: Cards can’t expire in less than five years (from date purchased or last time money was added to the card).
• Fees: A monthly fee may be imposed only if the card is unused after 12 months.
• Disclosure of costs: Fee information will be on the card or packaging.

Many states already have gift card consumer protections in place. Consumers Union has a fact sheet titled “State Gift Card Consumer Protection Laws 2013 Update" that details the state laws.

If you have old gift cards that were not used and were registered in your name, you may be able to get some of the money back through your state’s unclaimed property agency.

The National Association of Unclaimed Property Administrators web site has a search engine to help you discover if your name is on any state unclaimed money lists.

Survey at a glance

Issuers: 22      Cards: 39

Average APR: 12.83%

Low: 4.25% (First Command Bank Platinum Visa)

High: 22.99% (high rate* on US Bank's FlexPerks Select Rewards Visa Card)

Variable Cards: 34
Average Variable APR: 13.20%

Low: 4.25% (First Command Bank Platinum Visa)

High: 22.99% (high rate* on US Bank's FlexPerks Select Rewards Visa Card)

Fixed Rate Cards: 5
Average Fixed APR: 10.03%

Low: 6.50% (Pulaski Bank and Trust Visa Classic)

High: 16.00% (high rate* on Golden 1 Federal Credit Union Visa Platinum Rewards)

* Rate is dependent on credit rating.

Lowest rate credit cards (variable rates)

APR	Annual fee	Bank (card name) and website
4.25%	None	First Command Bank (Platinum Visa), www.firstcommandbank.com
5.74%1, 2	None	Addison Avenue Credit Union (Visa Cash Back Platinum), www.addisonavenue.com
6.25%1	None	Iberia Bank (Visa Classic)
6.99%1	None	Bank of America (Platinum Plus Visa), www.bankofamerica.com
7.24%1	None	American Airlines Federal Credit Union2(Visa Platinum Rewards) http://www.aacreditunion.org; Citi (AT&T Universal Savings Platinum), www.citicards.com
1. Lowest rate in a range based on applicant’s credit history. Generally, only applicants with excellent credit qualify for this rate. 2. Requires membership in the credit union. Not everyone is eligible.

Lowest rate credit cards (Fixed rates)

APR	Annual fee	Bank (card name) and website
6.50%	$35	Pulaski Bank and Trust (Visa Classic) www.pulaskibank.com
7.25%	None	Simmons First Bank (Visa Platinum), https://simmonsbank.com/bank/credit-cards/visa-platinum
9.40%2	None	Navy Federal Credit Union (goRewards), www.navyfcu.org
9.99%1, 2	None	Golden1 Federal Credit Union (Visa Platinum Reward) www.golden1.com
13.99%2	$18	Pentagon Federal Credit Union (Visa Platinum Reward) www.penfed.org
1. Lowest rate in a range based on applicant’s credit history. Generally, only applicants with excellent credit qualify for this rate. 2. Requires membership in the credit union. Not everyone is eligible.

Consumer Action 2009 Credit Card Survey

Click here to download a PDF of this survey.

Note: You are prohibited from using Consumer Action’s name or any reference to its surveys in advertising or for any other commercial purpose.

• APR: Annual Percentage Rate
• Var: Variable interest rate
• Fix: Fixed interest rate
• * (Asterisk): See note in Additional Information column.
• Min.: minimum fee
• Max.: maximum fee
• Annual Percentage Rate (APR): The yearly interest rate. The APRs listed are for purchases—cash advances often carry a higher APR.
• Grace Period: The number of days after the close of the last billing cycle in which you can pay off new bills without being charged interest—if there is no prior balance.
• Late/over limit fees tied to the balance: $ [fee] < [less than] $ [balance]; $ [fee], $ [balance middle range]; $ [fee] > [greater than] $ [balance].

Notes:

• Survey was conducted between March 4-May 20, 2009 by Sheree Jones and Kristen Ashby, students at the Virginia Tech, and Ruth Susswein of Consumer Action.
• Survey does not include introductory or promotional (teaser) rates.
• For variable rates, the APR may not reflect recent changes in the index, such as the Prime, Federal Discount rates or LIBOR. The Prime Rate during the survey period was 3.25%. (Bankrate.com lists all current index rates.)
• If a range of APRs is shown, the final rate is dependent on the applicant's credit history.

Warning: All rates are subject to change. Before applying for a new credit card, verify all information with the issuer.

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Addison Avenue Credit Union • 800-449-7728; applications: 877-233-4766

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Visa Cash Back Platinum Card

• Annual Fee: None
• APR: 5.74%-16.49% Var
• Additional Information: Grace period: 25 days. No cash advance fee. Late fee: $30. Over limit fee: $39. APR is Prime + 1.99%-10.99%.

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Amalgamated Bank of Chicago • 800-365-6464

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Standard Plus Mastercard

• Annual Fee: $37.00
• APR: 7.25%-12.75% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 2.50%/$2.50 min./$30 max. Late fee: $30. Over limit fee: $30. APR is Prime + 2.50%-10.75%.

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American Airlines FCU • 800-533-0035/ext. 36222; applications: 817-963-6000

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Visa Platinum Rewards Card

• Annual Fee: None
• APR: 7.24%-13.24% Var
• Additional Information: Grace period: 20 days. Cash advance fee: $1.25. Late fee: $29. Over limit fee: $29. APR is Prime + 3.99%-9.99%.

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American Express • 800-528-4800

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Blue Cash Card

• Annual Fee: None
• APR: 11.24%, 14.24%, or 17.24% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$5 min./No max. Late fee: $19<$400; $38>$400. Over limit fee: $39. APR is Prime + 7.99%-13.99%.

Delta Skymiles Platinum

• Annual Fee: $150.00
• APR: 13.24% Var
• Additional Information: Grace period: 20 days. Cash advance fee:3%/$5 min./No max. Late fee: $19<$400; $38>$400. Over limit fee: $35. APR is Prime + 9.99%.

Clear Card

• Annual Fee: None
• APR: 12.24%, 14.24% or 17.24% Var
• Additional Information: Grace period: 28-31 days. No cash advance fee. No late fee. No over limit fee. APR is Prime + 8.99%-13.99%.

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Bank of America • 800-732-9194

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Platinum Plus Cash Reward Mastercard

• Annual Fee: None
• APR: 8.99%-18.99% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $15<$500; $29, $500-$1000; $39>$1000. APR is Prime + 4.99%-14.99%.

Platinum Plus Visa

• Annual Fee: None
• APR: 6.99%-16.99% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $15<$500; $29, $500-$1000; $39>$1000. APR is Prime + 2.99%-12.99%.

Accelerated Cash Rewards American Express Card • 800-932-2775

• Annual Fee: None
• APR: 8.99%-18.99% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $15<$500; $29, $500-$1000; $39>$1000. APR is Prime + 4.99%-14.99%.

Virgin Atlantic American Express Card

• Annual Fee: White card: $49.00; Black card: $90
• APR: 12.99% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $15<$500; $29, $500-$1000; $39>$1000. APR is Prime + 8.99%.

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Capital One • 800-955-7070; applications: 800-695-5500

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Standard Platinum

• Annual Fee: None
• APR: 22.70% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $19<$500; $29, $500-$1000; $39>$1000. APR is Prime + 19.45%.

Platinum Prestige

• Annual Fee: None
• APR: 11.90% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $19<$500; $29, $500-$1000; $39>$1000. APR is Prime + 8.65%.

No Hassle Miles Reward

• Annual Fee: None
• APR: 13.90% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. No over limit fee. APR is Prime + 10.65%.

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Chase • 800-432-7383; applications: 866-422-6566

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FreedomSM card

• Annual Fee: None
• APR: 12.24%, 16.24% and 21.24% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 8.99%-17.99%.

PerfectCard Mastercard

• Annual Fee: None
• APR: 9.24%, 13.24%, 18.24% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 5.99%-14.99%.

Platinum Visa

• Annual Fee: None
• APR: 9.24%, 13.24%, 18.24% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$10 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 5.99%-14.99%.

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Citi • 800-950-5114

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Platinum Select Master Card

• Annual Fee: None
• APR: 7.74%, 11.74% or 15.74% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$5 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 4.49%-12.49%.

Diamond Preferred Rewards Card

• Annual Fee: None
• APR: 9.49%, 13.49% or 17.49% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$5 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 6.24%-14.24%.

AT&T Universal Savings Platinum • 800-303-9189; applications: 800-423-4343

• Annual Fee: None
• APR: 7.24%-14.24% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$5 min./No max. Late fee: $15<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 3.99%-10.99%.

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Digital Federal Credit Union • 800-328-8797

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Platinum Rewards

• Annual Fee: None
• APR: 8.50%-13.75% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$10 min./No max. Late fee: $30. Over limit fee: $30. APR is Prime + 3%-10.50%.

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Discover • 800-347-2683

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Miles

• Annual Fee: None
• APR: 10.99%-18.99% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$5 min./No max. Late fee: $19<$250; $39>$250. Over limit fee: $15<$500; $39>$500. APR is Prime + 7.74%-15.74%.

More Platinum Card

• Annual Fee: None
• APR: 10.99%-18.99% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$5 min./No max. Late fee: $19<$250; $39>$250. Over limit fee: $15<$500; $39>$500. APR is Prime + 7.74%-15.74%.

Open Road

• Annual Fee: None
• APR: 10.99%-18.99% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$5 min./No max. Late fee: $19<$250; $39>$250. Over limit fee: $15<$500; $39>$500. APR is Prime + 7.74%-15.74%.

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EverBank • 888-882-3837; applications 800-738-2615

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Visa Platinum

• Annual Fee: None
• APR: 9.99%-12.90% Var
• Additional Information: Grace period: At least 6 days. Cash advance fee: 2.5%/$2.50 min./No max. Late fee: $29. Over limit fee: $29. APR is Prime + 1.9%-4.9%.

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First Command Bank • 888-763-7600

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Platinum Visa Card

• Annual Fee: None
• APR: 4.25% Var
• Additional Information: Grace period: 25 days. No cash advance fee. No late fee. No over limit fee. APR is Prime + 1%.

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Golden 1 FCU • 800-462-1663; applications: 916-732-2900

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Visa Platinum Reward

• Annual Fee: None
• APR: 9.99%-16.99% Fix
• Additional Information: Grace period: 25 days. Cash advance fee: 2%/$2 min./$50 max. Late fee: $15. Over limit fee: $10.

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HSBC • 888-385-8916; applications: 800-318-4821

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Cash or Fly Rewards Mastercard

• Annual Fee: $0-$79; one-time processing fee of $0 and $49 may apply
• APR: 8.99%, 11.99%, 14.99% or 17.99% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$15 min./no max. Late fee: $19<$250; $39>$250. Over limit fee: $39. APR is Prime + 5.74%, 8.74%, 11.74% or 14.74%.

Platinum Visa with Cash Back

• Annual Fee: $0-$79; one-time processing fee of $0-$49 may apply
• APR: 7.99%-17.99% Var
• Additional Information: Unable to learn the length of the grace period on this card. Cash advance fee: 3%/$3 min./$15 max. Late fee: $19<$100; $29, $100-$250; $39>$250. Over limit fee: $35. We were not able to determine the Index and Margin used for this card.

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Iberia Bank • 800-518-8866; applications: 800-968-0801

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Visa Classic

• Annual Fee: None
• APR: 6.25%, 7.25% or 8.25% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 5%/$5 min./$100 max. Late fee: $15<$100; $29, $100-$1000; $35>$1000. Over limit fee: $35. APR is Prime + 3%-5%.

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Navy Federal Credit Union • 703-255-8837

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MasterCard goRewards

• Annual Fee: $18.00
• APR: 9.40% Fix
• Additional Information: Grace period: 25 days. No cash advance fee. Late fee: $30. Over limit fee: $30.

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Pentagon FCU • 800-247-5626

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Visa Platinum Reward

• Annual Fee: None
• APR: 13.99% Fix
• Additional Information: Grace period: 25 days. No cash advance fee. Late fee: $39. Over limit fee: $15.

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Pulaski Bank and Trust • 501-661-7700

Note: Pulaski Bank is now Iberia Bank. The information shown below is no longer valid. Click here for updated information from Iberia Bank.

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Visa Classic

• Annual Fee: $35.00
• APR: 6.50% Fix
• Additional Information: Grace period: 25 days. No cash advance fee. Late fee: $15<$100; $29, $100-$1000; $35>$1000. Over limit fee: $35.

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Simmons First National Bank • 800-272-2102

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Visa Platinum Card

• Annual Fee: None
• APR: 7.25% Fix
• Additional Information: Grace period: 25 days. Cash advance fee: 3%/$4 min./$50 max. Late fee: $29. Over limit fee: $29.

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Town North Bank • 800-922-0733

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TNB Platinum Mastercard

• Annual Fee: None
• APR: 9.99%, 15.99% or 18.99% Var
• Additional Information: Grace period: 20 days. Cash advance fee: 3%/$5 min./No max. Late fee: $15<$100; $29, $100-$250; $34>$250. Over limit fee: $29. APR is Prime + 3.99%-12.99%.

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US Bank • 800-285-8585; applications: 800-320-2282

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FlexPerks Select Rewards Visa

• Annual Fee: None
• APR: 9.99%-22.99% Var
• Additional Information: Grace period: 20-25 days. Cash advance fee: 4%/$10 min./No max. Late fee: $19<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 5.99%-18.99%.

Visa Platinum

• Annual Fee: None
• APR: 7.99%-20.99% Var
• Additional Information: Grace period: 20-25 days. Cash advance fee: 4%/$10 min./No max. Late fee: $19<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 3.99%-16.99%.

Travel Rewards Visa Platinum

• Annual Fee: $55
• APR: 7.99%-20.99% Var
• Additional Information: Grace period: 20-25 days. Cash advance fee: 4%/$10 min./No max. Late fee: $19<$100; $29, $100-$250; $39>$250. Over limit fee: $39. APR is Prime + 3.99%-16.99%.

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Wells Fargo • 800-932-6736

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Cash Back Platinum Card

• Annual Fee: None
• APR: 10.65%-21.65% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 4%/$10 min./No max. Late fee: $20<$250; $29, $250-$500; $39>$500. Over limit fee: $39. APR is Prime + 5.9%-16.9%.

Visa Platinum Card

• Annual Fee: None
• APR: 7.65%-21.65% Var
• Additional Information: Grace period: 25 days. Cash advance fee: 4%/$10 min./No max. Late fee: $20<$250; $29, $250-$500; $39>$500. Over limit fee: $35. APR is Prime + 2.9%-16.4%.

Survey summary

Click here to download a PDF summary of all 2009 Credit Card Survey findings.

The Consumer Action 2009 Credit Card Survey was conducted from March 4-May 20, 2009 by Sheree Jones and Kristen Ashby, students at Virginia Tech, and Ruth Susswein of Consumer Action. The survey included 39 cards from 22 financial institutions. The Prime Rate was 3.25% during the survey period.

22 financial institutions

Addison Avenue FCU; Amalgamated Bank of Chicago; American Airlines-FCU; American Express; Bank of America; Capital One; Chase; Citi; Digital FCU; Discover; Everbank; First Command Bank*; Golden 1 FCU**; HSBC Bank; Iberia Bank; Navy FCU; Pentagon FCU; Pulaski Bank and Trust***; Simmons First; Town North Bank; US Bank; Wells Fargo

*Only accepting existing customers for credit card accounts
**Requires deposit of one and a 1/2 times credit line to receive credit card account
***Pulaski Bank has become Iberia Bank and rates have changed since the survey period. New rates are available at Iberia Bank (http://creditcards.iberiabank.com/)

Breakdown (39 credit cards)

15 Banks (Top 9 issuers + 6 low rate issuers)

Top Ten Issuers

1. American Express
2. Bank of America
3. Capital One
4. Chase
5. Citi
6. Discover
7. HSBC
8. US Bank
9. Wells Fargo

6 Low rate issuers

1. Amalgamated Bank of Chicago
2. Everbank
3. First Command Bank
4. Pulaski Bank and Trust
5. Simmons First
6. Town North Bank

6 Credit Unions

1. Addison Avenue FCU
2. American Airlines-FCU
3. Digital FCU
4. Golden 1 FCU
5. Navy FCU
6. Pentagon FCU

39 Cards

1. Addison Avenue FCU Visa Cash Back Rewards
2. Amalgamated Bank of Chicago Standard Plus MC
3. American Airlines-FCU Standard Plus MC
4. Amex Blue Cash
5. Amex Delta Skymiles Platinum
6. Amex CLEAR
7. B of A Platinum Plus Cash Reward Mastercard
8. B of A Platinum Plus Visa
9. B of A Accelerated Cash Rewards American Express Card
10. B of A Virgin Atlantic American Express Card
11. Cap One Platinum Prestige
12. Cap One Standard Platinum
13. Cap One No Hassle Miles Rewards
14. Chase Freedom SM Visa
15. Chase Perfect Card MC
16. Chase Platinum Visa
17. Citi Platinum Select MasterCard
18. Citi Diamond Preferred Rewards
19. Citi - AT&T Universal Platinum
20. Digital FCU Visa Platinum Rewards
21. Discover Miles Card
22. Discover More Card Platinum
23. Discover Open Road Card
24. Everbank Visa Platinum
25. First Command Platinum Visa Card
26. Golden 1 Visa Platinum Reward
27. HSBC Platinum-Cash or Fly Rewards
28. HSBC Visa Classic
29. Iberia Bank Visa Classic
30. Navy FCU MasterCard goRewards
31. Pentagon FCU Visa Platinum
32. Pulaski Classic Visa
33. Simmons First Visa Platinum Card
34. Town North Bank TNB Platinum MC
35. US Bank Flexperks Select
36. US Bank Visa Platinum
37. US Bank Travel Rewards
38. Wells Fargo Cash Back
39. Wells Fargo Visa Platinum Card

Card fundamentals

ANNUAL FEE: What is the annual fee?

• 31 cards had no annual fee
• 8 cards had annual fees
  • Average fee: $62.75
  • Range: $18 (Navy FCU go Rewards)-$150 (American Express Delta Skymiles) Note: A version of the Delta Skymiles has an annual fee of $90.
• Of the eight, 2 cards might impose an annual fee on certain customers (Town North Bank, HSBC)

HSBC imposes not only annual fees, but also one-time “processing fees” of up to $49 on certain cardholders.

Is the annual fee waived the first year?

Of the eight (8) cards with annual fees, none would waive the fee for the first year.

What is the Grace Period?

• 1 - 6 days (Everbank)
• 3 - 20-25 days
• 14 – 20 days
• 18 - 25 days
• 1 - 28-31 days (American Express Clear Card)

On the two surveyed HSBC cards, we were not able to determine what the grace period is.

What is the APR for purchases?

• Range of rates: 4.25% (Platinum Visa, First Command Bank) – 22.99% (high rate* on US Bank) *Rate is dependent on credit rating.
• 12.83% Average all cards
• 13.20% Average Variable cards
• 10.03% Average Fixed-Rate cards
• 27 cards featured a range of rates
• 12 cards quoted one rate

Is the APR for purchases fixed or variable?

5 fixed and 34 variable (VRCs)

If variable, what is the margin APRs for purchases?

APR formulas on VRCs ranged from Prime + 1% (First Command Bank) to Prime + 19.45% (Capital One Standard Platinum).

What index is the purchase APR rate tied to?

All surveyed cards with Variable Rates were tied to the Prime Rate.

If the Index changes, how quickly would my rate change?

28 out of 34 Variable Rate cards surveyed changed it each month in which the Index changed (but we could not determine the answer for two HSBC cards). Five (5) cards adjust the rate Quarterly if the Index has changed in that quarter.

Cash advances

What is the APR for cash advances?

4.25% (First Command Bank; Variable: Prime + 1%) to 23.99% (Town North Bank; Variable: Prime + 17.99%)

Is the APR for cash advances Fixed or Variable?

8 Fixed, 31 Variable

If variable, what is the margin APR(s)for cash advances?

1.00% to 17.99%

What index is the rate tied to?

All Variable Cash Advance Rates (31 out of 39) were tied to the Prime Rate.

What is the Cash Advance Fee?

No fee (6 cards). 1 card, 5.00% (Iberia Bank Visa Classic). 5 cards - 4.00%. 23 – 3.00%¹ , 2 – 2.5-% (Everbank and Amalgamated Bank of Chicago) and 1 – 2.00% (Golden 1 Credit Union). One card (American Airlines FCU) had a flat fee of $1.25.

¹ Bank of America raised its cash advance fee from 3%, to 4%-5% (June ‘09).

What are the minimum and maximum cash advance fees? Note: Many issuers did not report a maximum.

Minimum: $2 (Golden1 FCU) to $15 (HSBC)
Maximum: $30 (Amalgamated Bank of Chicago) to $100 (Iberia Bank)

Introductory rates

Is there an introductory APR for purchases? If yes, what is the rate? How long does rate last?

Introductory rates on purchases

Issuer	Card name	Introductory rate on purchases	Length of introductory rate
American Express	Blue Cash Card	Zero Percent	6 or 12 months
American Express	Clear Card	Zero Percent	6 or 12 months
Bank of America	Virgin Atlantic American Express Card (white card)	Zero Percent	6 months
Capital One	Standard Platinum	Zero Percent	Until 8/09
Chase	FreedomSM	Zero Percent	3 or 12 months
Chase	PerfectCard Mastercard	Zero Percent	6 months
Chase	Platinum Visa	Zero Percent	12 months
Citi	Platinum Select MasterCard	Zero Percent	Not available
Discover	Miles	Zero Percent	6 months
Discover	More Platinum Card	Zero Percent	Not available
Discover	Open Road	Zero Percent	6 months
Town North Bank	TNB Platinum Mastercard	Zero Percent-4.99%	6 months
U.S. Bank	Travel Rewards Visa Platinum	Zero Percent	6 months
Wells Fargo	Cash Back Platinum Card	Zero Percent-5.90%	6 or 9 months
Wells Fargo	Visa Platinum Card	Zero Percent-5.90%	6 to 9 months

Is there an introductory APR for Cash Advances? If yes, what is the rate? How long does rate last?

Only one surveyed institution, Bank of America, offered an introductory rate on cash advances—but not on ATM or teller cash advances. The offer applies to convenience checks or direct deposit cash advances arranged with the issuer.

This offer, available on the Bank of America Virgin Atlantic American Express card, was Zero% APR for 6 months.

Is there an introductory APR for Balance Transfers for this card? If yes, what is the rate? How long does rate last?

Introductory rates for balance transfers

Issuer	Card name	Introductory rate for balance transfers	Length of introductory rate
Bank of America	Platinum Plus Cash Reward Mastercard	Zero Percent	15 months
Bank of America	Platinum Plus Visa	Zero Percent	6 months
Bank of America	Accelerated Cash Rewards American Express Card	Zero Percent	15 months
Bank of America	Virgin Atlantic American Express Card (white card)	Zero Percent	6 months
Chase	PerfectCard Mastercard	Zero Percent	6 months
Chase	Platinum Visa	Zero Percent	3 or 12 months
Citi	Platinum Select Master Card	Zero Percent	9 months
Citi	Diamond Preferred Rewards Cards	Zero Percent	6 or 12 months
Citibank N.A.	AT&T Universal Savings Platinum	Zero Percent	6 or 12 months
Discover	Miles	Zero Percent	6 months
Discover	More Platinum Card	Zero Percent	12 months
Discover	Open Road	Zero Percent	12 months
HSBC	HSBC Cash or Fly Rewards Mastercard	Zero Percent	12 months
Iberia	Visa Classic	Zero Percent	3 months
Pulaski Bank and Trust	Visa Classic	Zero Percent	6 months
Town North Bank	TNB Platinum Mastercard	Zero Percent	6 months
U.S. Bank	Travel Rewards Visa Platinum	Zero Percent	6 months
US Bank	Visa Platinum	Zero Percent	12 months
Wells Fargo	Cash Back Platinum Card	Zero Percent-5.90%	6 or 9 months
Wells Fargo	Visa Platinum Card	Zero Percent-5.90%	6 or 9 months
American Express	Clear Card	3.99%	12 months
American Express	Blue Cash Card	2.99%	12 months
Pentagon FCU	Visa Platinum Reward	2.99%	Life of balance

What is the Balance Transfer fee? (May vary by card from a given issuer.)

No fees — 11 cards: Addison Avenue Credit Union (Visa Cash Back Platinum Card), American Airlines FCU (Visa Platinum Rewards Cards), American Express (Clear Card), American Express (Delta Skymiles Platinum), Capital One (Standard Platinum), Capital One (No Hassle Miles Reward), First Command Bank (Platinum Visa Card), Iberia (Visa Classic), Navy Federal Credit Union (MasterCard goRewards), Pulaski Bank and Trust (Visa Classic), Simmons First National Bank (Visa Platinum Card)

No answer obtained: Amalgamated Bank of Chicago and Digital Federal Credit Union

3% fee - 11 issuers (24 cards) (American Express, Bank of America, Capital One, Chase (up to 5% in August, 2009), Citi, Discover, Everbank, HSBC, Town North Bank, US Bank, Wells Fargo)

2.5% fee - 1 issuer: Pentagon Federal Credit Union

2% fee - 1 issuer: Golden1 FC

What are the minimum and maximum balance transfer fees?

On surveyed cards with balance transfer fees that also had minimums or maximum fees, the range of fees is:

• Minimum fees ranged from $2 (Golden 1 FCU Visa Platinum Reward)-$15 (HSBC – both surveyed cards)
• Maximum fees ranged from $50 (Everbank and Golden1 FCU Visa Platinum Reward) to $100 (Pentagon Federal Credit Union)

Are balance transfer fees waived during the promotion?

For new customers (typically for a balance transfer made at the time of application or in the first 90 days) the balance transfer fees would be waived on two surveyed cards:

• Capital One Standard Platinum (3.00% fee/$10 min./No max.)
• Golden 1 FCU Visa Platinum Rewards Card (2.00% fee/$2 min./$50 max.)

Is there a monthly maintenance fee on low-rate promotional balances? (Chase had implemented a $10 per month fee in early 2009, but dropped the practice almost immediately in response to public outcry.)

Representatives from Discover (1) Miles and (2) More Platinum Cards said that yes, there could be a monthly maintenance fee on low rate promotional balances.
Our surveyors could not obtain an answer to this question from Everbank, HSBC and Simmons First National Bank.

Are there any conditions I need to meet to keep the lower rate? If yes, explain.

Based on the issuers’ fine print and oral answers, we received responses to this question for 26 cards:

1. American Airlines FCU, Visa Platinum Rewards Cards: If 30 days late or past due twice in 12 mos. APR goes to 18%
2. American Express, Delta Skymiles Platinum: Pay on time
3. American Express, Clear Card: Pay on time
4. Bank of America, Platinum Plus Visa: Pay on time & do not go OTL (over limit)
5. Bank of America, Accelerated Cash Rewards American Express Card: Do not pay late, do not go over the limit
6. Bank of America, Virgin Atlantic American Express Card (white card): If payment is late or OTL rate goes to standard rate also no defaulting, no missing payments
7. Bank of America, Platinum Plus Cash Reward Mastercard: If you go OTL or are late on a payment you will go to stand rate of 11.99-19.99%
8. Chase, FreedomSM card: If you don’t pay by due date & time, if go OTL, or have returned check
9. Chase, Platinum Visa: Don’t pay late (payment must be received by date & time due), no return payments, no OTL, keep other (affiliated) accounts in good standing
10. Chase, PerfectCard Mastercard: You must pay bill by due date & time, no OTL & no returned checks
11. Citi, Platinum Select Master Card: Not paying late, not going over limit, no returned checks
12. Citi, Diamond Preferred Rewards Card: Not paying late, going over limit, or returned check
13. Citibank N.A., AT&T Universal Savings Platinum: Don’t pay late, go OTL or have check returned
14. Discover, Miles: Keep in good standing pay accounts on time.
15. Discover, Open Road: Not miss a payment or go OTL twice
16. Discover, More Platinum Card: Pay on time and do not go OTL
17. Golden 1 FCU, Visa Platinum Reward: Keep payments up
18. HSBC, Platinum Visa with Cash Back: Make timely payments
19. HSBC, HSBC Cash or Fly Rewards Mastercard: Pay on time, no OTL (over limit)
20. Iberia, Visa Classic: If at the end of billing min pay has not been made from preceding billing period go to default rate
21. Pentagon FCU, Visa Platinum Reward: Not miss two payments
22. Pulaski Bank and Trust, Visa Classic: Not miss a payment
23. US Bank, Travel Rewards Visa Platinum: Pay at least minimum payment on time (by payment due date); don’t exceed credit limit; don’t close your account.
24. US Bank, Visa Platinum: Payment must not be late, OTL or close your account
25. Wells Fargo, Cash Back Platinum Card: Lose low rate if go over limit for 2 billing periods, or do not make minimum payment by due date
26. Wells Fargo, Visa Platinum Card: If payment is late or account closed you lose low rate & go to standard rate

Rewards

Is this a Reward Card? (Miles, cash, etc.) Type of reward? Please explain the reward. What are the limits, caps, restrictions on rewards on this card?

Of the 39 surveyed cards:

• 9 offered no reward (23%)
• 30 offered rewards (77%)

Of the 30 rewards cards:

• 17 offered hybrid awards (“cash back” on purchases, travel, merchandise credits, etc.)
• 10 offered “cash back” on purchases
• 3 offered travel rewards

Rewards - Cash Back

Card (Bank)	Explain reward	Limits on reward (if any)
Visa Cash Back Platinum Card (Addison Avenue Credit Union)	1% cash back for every dollar spent
Blue Cash Card (American Express)	Earn up to 5% unlimited cash back rewards. Up to $6500 of everyday purchase (supermarket, gas, drug store) earns 1%. Over $6,500 in purchase earns 5%/ All other purchase earn .5% (up to $6500) & 1.5% (over $6,500)
Clear Card (American Express)	Earn 1% cash back on purchases & get a $25 gift card every time you spend $2,500 & free credit report & score every 12 months & no fees
Platinum Plus Visa (Bank of America)	Earn $25 for every 25 points earned (up to 600 points/yr). 1 point=$100 in new purchases	Points expire in 5 years
FreedomSM (Chase)	1% cash back on purchases, 10-20% back when shop online thru Chase, 3% cash back on gas, home improvement & dept stores & $50 cash back after first purchase
PerfectCard Mastercard (Chase)	1% cash back on all purchases 6% cash back on gas purchases for 1st 90 days then 3% back. Auto receive cash back reward monthly in statement	No expiration, no earnings cap
AT&T Universal Savings Platinum (Citi)	Unless you are participating in a limited time promotional offer, you will earn 5% on each dollar you spend on eligible AT&T purchases that is matched by the amount you spend on other purchases. For the first 12 months of membership you will earn 10% on each dollar you spend on eligible AT&T purchases that is matched by the amount you spend on other purchases	Rewards earned as long as card is open & current; max savings per year $350, up to 50,000 pts earned per yr.
Visa Platinum Reward (Golden 1 FCU)	1% cash rebate available on qualified purchases, excluding cash advances and purchase credits OR receive a lower fixed rate 6/19. Can receive 1-14% cash back. Receive payment when reach $25	Primary cardholders must be an active member and maintain a Golden 1 regular savings account with the required minimum balance. $3 rewards check fee—unless you direct deposit into Golden1 account
Platinum Visa with Cash Back (HSBC)	Unlimited 1% cash back on every purchase.
Cash Back Platinum Card (Wells Fargo)	Earn 1% cash back on all credit card purchases

Rewards - Travel

Card (Bank)	Explain reward	Limits on reward
Standard Plus Mastercard (Amalgamated Bank of Chicago)	Optional “Amagamiles” rewards program. Travel discounts or toward an airline ticket ($29 year option) (in addition to annual fee)
Delta Skymiles Platinum (American Express)	Earn 1 mile per dollar for Delta flight or with 15 airline partners earn annual complimentary companion ticket with no blackout and no min fare requirements. Redeem miles starting at 10,000 mi for $100 off Delta flight	No limit
Virgin Atlantic American Express Card (Bank of America)	Customers earn 20,000 Flying Club bonus miles after 1st purchase & 7,500 more if you spend $15,000 your first year on card (spend $25K and earn companion airline ticket at half the # of miles it normally takes) 3 miles per $1 spent directly on Virgin Atlantic purchases.1 mile per $1 spent on everyday purchases (was 1.5) Up to 7,500 bonus miles every anniversary. Up to 2,500 bonus miles when you add an additional card member to your account.	No annual mileage cap. miles do not expire.

Rewards – Hybrid Awards (good for gas, travel, merchandise, etc.)

Card (Bank)	Explain reward	Limits on reward
Visa Platinum Rewards Cards (American Airlines FCU)	5,000 Connection points when first used; Earn points for travel and merchandise
Platinum Plus Cash Reward Mastercard (Bank of America)	Build points for cash back and merchandise; 1% cash back for purchases	Rewards start at $2,500 in purchases
Accelerated Cash Rewards American Express Card (Bank of America)	1.25% per $1 of purchases - all purchases eligible for reward points; Redeem in increments of $50	Rewards expire in 5 years
No Hassle Miles Reward (Capital One)	$1=1 mile (2 miles earned for monthly purchases above $1,000); Miles don’t expire until account is closed. To redeem add 2 zeros to cost, example: $180 = 18,000 miles. No blackout dates, no seat restrictions; can use reward for cash, gift cards, merchandise	No annual caps. If you pay bill late you lose that month’s reward
Diamond Preferred Rewards Card (Citi)	$1=1 thank you point redeemable for gift cards merchandise, travel, sporting events, electronics, etc; $1 spent at drugstores, supermarkets, gas=5 pts. For 12 months.	Earn up to 75,000 thank you points per year. Points expire 5 years from end of month they are earned.
Platinum Rewards (Digital FCU)	2 points earned per dollar spent on gas, groceries & restaurants. 1 point earned for all other purchases; 20,000 points & up earn for merchandise, travel, & Visa gift cards	Points expire after 4 years cash advances and Visa checks don’t qualify for points
More Platinum Card (Discover)	5% cash back bonus in categories that change like travel, gas, groceries etc & 5-20% cash back on Discover online shopping & up to 1% cash back on other purchases; Redeem cash back for bigger rewards of gift cards & e-certificates for online shopping at 100 partners
Open Road (Discover)	Cash back bonus: 5% cash back on $1200/yr ($100/mo) on gas, automotive purchases; 5-20% cash back on Discover online shopping, up to 1% cash back other purchases; Redeem bigger rewards thru Discover gift cards & 100 partners	No limits on cash rewards
Miles (Discover)	Earn double miles on 1st $3,000 of travel & rest purchases, & 1 mile for every $1 of other purchases. Plus 1,000 bonus miles each mo. you make purchases the 1st year. Redeem miles for travel credit, gift cards, or cash	Earn unlimited miles on purchases
Visa Platinum (Everbank)	Services redeemable online (travel, merchandise, gift cards, etc.)	Optional- $49 per year
Platinum Visa Card (First Command Bank)	Air Travel, hotels, vacation packages, cruises, rental cars, merchandise
Cash or Fly Rewards Mastercard (HSBC)	Earn 1 point for each dollar spent on card purchases. Redeem 1.5 miles for every point for travel reward or .75 for cash back. 25,000 points earn 1 round trip ticket worth $400 max or 1% cash back option.
MasterCard goRewards (Navy Federal Credit Union)	Earn up to 1.7% return on each dollar spent. 2,000 to 120,000 points earns you cash back, $25, 50, $100 retail gift cards, or airfare discounts, hotel stays or Broadway theater tickets.	Points expire after 4 years. Start redeeming at 3,500 points
Visa Platinum Reward (Pentagon FCU)	2% cash back supermarket; 5% cash back gas; 1.25 all other purchases & 1,000 free points when join; 1 point every dollar for travel and merchandise	Cash advances, balance transfers don’t earn rewards
FlexPerks Select Rewards Visa Card (US Bank)	Earn 1 flexpoint for every $2 in purchases to apply toward air travel (thru Travelocity) 20,000-500,000 pts ($400-$10,000 value) OR toward merchandise, gift cards or hotel, car rental, cruises (Redeem at 5,000-50,000 points)	Flexpoints expire 5 years form when earned
Travel Rewards Visa Platinum (US Bank)	1 point per net purchase dollar. Redeem points starting at 25,000 points- toward round trip ticket in 48 contiguous states at 5,000 points can redeem for merchandise, restaurants, travel accessories.	Points capped at 120,000 per year; points expire in 5 years from date earned.
Visa Platinum Card (Wells Fargo)	Choose reward program (airfare, gift cards, cash rebates, merchandise, etc.) This is an optional rewards program & annual is waived	Annual rewards program fee may apply & $24 processing fee for airline tickets. Balance transfers are not eligible for rewards points

Default rates

Is there a default rate on this card? (By institution)

38 – Yes (97.4% of all surveyed cards)
1 – No (First Command Bank)

Is there more than one default rate on this card? (By institution)

4 - Yes (American Express, Bank of American, Capital One, Everbank)
18 - No

Note: Although some banks have more than one default rate, we only collected the highest default rate from each institution in our 2009 survey.

What is the highest default rate? (By cards)

Highest: 31.99% (HSBC) - Lowest: 12.75% (Amalgamated)
Average: 25.28% (38 cards)

1 - No default rate: First Command Bank

Are your penalty rates APR fixed or variable? If variable, what index is the rate tied to?

9 cards have fixed default rates

28 cards have variable rates. All are tied to the Prime Rate index.

1 card has no default rate

Note: We could not obtain an answer to this question from Iberia Bank.

If variable, what’s the margin for the highest default rate?

Note: The highest margin provided does not correspond with the highest default rate provided:

• Prime + 27.99% (Discover More and Open Road cards) At the time of the survey, Prime was at 3.25%

The variable rate formula given for the highest default rate (HSBC, 31.99%) at 31.99% could not be obtained.

What would cause you to raise my rate to the default rate? Is there anything else I might do that might raise my rate to the default rate?

• Addison Avenue Credit Union: Two or more late payments
• Amalgamated Bank of Chicago: Two or more late payments
• American Airlines FCU: Two or more late payments
• American Express: One late payment; Two or more late payments; Going over limit; Returned payment (bounced check)
• Bank of America: Two or more late payments; Going over limit; Returned payment (bounced check)
• Capital One: Returned payment (bounced check); Two or more late payments
• Chase: One late payment; Returned payment (bounced check); Going over limit
• Citi: One late payment; Returned payment (bounced check); Two or more late payments; Going over limit
• Digital Federal Credit Union: Two or more late payments
• Discover: One late payment; Going over limit; going OTL (over the limit) twice; payment history
• Everbank: One late payment; Two or more late payments; Returned payment (bounced check); Going over limit
• Golden 1 FCU: Two or more late payments; Returned payment (bounced check)
• HSBC: Going over limit; One late payment
• Iberia: If late on a payment by a full billing period
• Navy Federal Credit Union: One late payment
• Pentagon FCU: Two or more late payments
• Pulaski Bank and Trust: Two or more late payments; Returned payment (bounced check); One late payment
• Simmons First National Bank: Two or more late payments
• Town North Bank: One late payment
• US Bank: One late payment; Two or more late payments; Returned payment (bounced check); late 15 days, or 5 days late twice in 12 months, or OTL twice in 12 months.
• Wells Fargo: Two or more late payments; Returned payment (bounced check); Going over limit; if you don’t make minimum payment for 2 consecutive billing periods, or you are over the limit for 2 consecutive billing periods

Is the default rate tied to a certain number of late payments?

Only one company used such a fee structure:

American Express

18.24% (default) and 27.27% (serious default) Variable. (Prime Rate + 12.99% and 21.99%.) Considered in “default” if minimum payments are not paid on time, one time. “Seriously default” — if minimum payments are paid late two or more times, your account is over limit three or more times, or your payment is returned by your bank or financial institution.

Note: This fee structure does not apply on the American Express Clear Card

Could I ever get back to my regular APR? (By issuer*)

*Note: Bank of America provided different answers on its American Express card than it did for its own card, so the total of all answers is 23.

20 – Yes (Amalgamated Bank of Chicago, American Airlines FCU, American Express, Bank of America, Capital One, Chase, Citi, Digital Federal Credit Union, Discover, Everbank, Golden 1 FCU, HSBC, Iberia, Navy Federal Credit Union, Pentagon FCU, Pulaski Bank and Trust, Simmons First National Bank, Town North Bank, US Bank, Wells Fargo)

1 – Don’t Know (Addison Avenue CU)

1 – Not applicable (First Command Bank)

If I maintain a good payment record will you reduce my rate?

20 – Yes (Amalgamated Bank of Chicago, American Airlines FCU, American Express, Bank of America, Capital One, Chase, Citi, Digital Federal Credit Union, Discover, Everbank, Golden 1 FCU, HSBC, Iberia, Navy Federal Credit Union, Pentagon FCU, Pulaski Bank and Trust, Simmons First National Bank, Town North Bank, US Bank, Wells Fargo)

If yes, how many on time consecutive payments will I need to make before you reduce my rate? (To what rate?) If a card is not listed below, we were unable to obtain answers to this question. Note: If an actual rate is given, it may be variable and subject to change—see ques on APR

• 12 months: Capital One (11.90% Platinum Prestige), (13.99% No Hassle Miles Reward)
• 9 months: Discover (to standard, regular rate)
• 6 months: Addison Avenue FCU (9.49% Visa Cash Back Platinum), Amalgamated Bank of Chicago (current rate), American Airlines FCU (7.27%-13.24%), American Express (varies), Bank of America (varies from 2 percentage points lower to the current standard rate), Chase (varies), Navy Federal FCU (9.40%), Simmons First (7.25%), Town North Bank (9.99%), US Bank (original or regular rate), Wells Fargo (approximately 6 months and “return to” rate varies)
• 3 months: Pentagon Federal Credit Union (13.99%)
• When account is current: Iberia National Bank (6.25%-8.25%)

Would you ever reduce my credit limit? Under which circumstances would you reduce my credit limit? (By issuer)

Issuer	Circumstances in reducing credit limit
American Express	Case-by-case basis
Bank of America	Returned payment (bounced check); Economy; Paid late once Paid late two or more times Went over limit
Capital One	Paid late two or more times; Returned payment (bounced check); Went over limit; If I take cash advances
Chase	Returned payment (bounced check); Went over limit; Economy
Discover	Went over limit
Golden 1 FCU	Economy
US Bank	Paid late two or more times; Went over limit
Wells Fargo	Paid late two or more times; Returned payment (bounced check); went over limit; Economy

No answer could be obtained form Iberia Bank and Everbank.

Other fees

What is the late payment fee? (By card)

94.9% of all surveyed cards had late fees

Two cards had no late fees (American Express Clear Card and First Command Bank Platinum Card)

Average late fee overall on cards with late fees: $28.19
Overall late fee range on cards with late fees: $15-$39

9 cards had flat late fees:

• Range: $15 (Golden 1 FCU) to $39 (Pentagon FCU)
• Average flat fee: $29

27 cards had tiered late fees tied to the balance:

Average of all tiered late fees: $27.88

5 cards had two tiers of fees tied to the balance (American Express and Discover cards) with an average late fee of $28.80.

• American Express tier ranges: $19<$400 balances and $38>$400 balances
• Discover tier ranges: $19<$250 balances and $39>$250 balances

23 cards had three tiers of fees tied to the balance with an average late fee across all tiers of $27.88.

When will I be charged a late fee?

28 cards (76%) indicated the late fees would be charged immediately if the payment was not received by the due date.

2 cards with no late fees (Amex Clear and First Command Bank Platinum) indicated that no late fee would be assessed but that severe late payments of 30-60 days would be reported on the cardholder’s credit report.

Capital One, Town North Bank and Pentagon FCU reps said their institutions have a leniency period of 10 days after the due date in which no late fee is charged.

Iberia Bank reps said that late fees were not charged on payments received after the due date but before the next billing cycle, roughly 25 days.

Would a late fee be charged if the due date falls on a Saturday or a holiday? (By institution) Note: New laws coming into effect in February 2009 will prevent this practice.

10 – “Yes”

• Amalgamated Bank of Chicago
• Bank of America
• Chase
• Citi
• Digital Federal Credit Union
• Discover
• HSBC
• Simmons First National Bank
• US Bank
• Wells Fargo

7 – “No”

• American Express
• Capital One
• First Command Bank
• Golden 1 FCU
• Navy Federal Credit Union
• Pentagon FCU
• Pulaski Bank and Trust

2 – No response could be obtained (Everbank and Iberia Bank)

3 – “Don’t know” (Addison Avenue Credit Union, American Airlines FCU, Town North Bank)

On the due date, at what time does my payment need to be there to avoid a late fee? (Specify Time and Time Zone: Example: 5 p.m. PT)

17 financial institutions answered the question. See table below for a breakdown.

The earliest cut off time was 2:30pm ET (Golden1 and Pulaski Bank & Trust). Chase had a cut off time of 4 p.m. ET. (Capital One reps said it does not assess a late fee until 10 days past the due date.)

Financial Institution	Cut-off time on due date
Addison Avenue Credit Union	12 am ET
Amalgamated Bank of Chicago	4:00 PM
American Airlines FCU	12:00 AM
American Express	Midnight
Bank of America	5 pm ET
Capital One	3 pm ET/noon PT
Chase	4 pm ET
Citi	5 pm ET
Digital Federal Credit Union	5 pm ET
Discover	5 pm EST
First Command Bank	6:00 am local time
Golden 1 FCU	2:30 pm EST
Navy Federal Credit Union	5 pm ET
Pulaski Bank and Trust	2:30 p.m ET
Town North Bank	5 pm ET
US Bank	6 pm CT
Wells Fargo	12 midnight
Everbank	No answer obtained
HSBC	No answer obtained
Iberia	No answer obtained
Pentagon FCU	No answer obtained
Simmons First National Bank	No answer obtained

What is the cut off time for online payments?

The answers, where available, agreed with previous question.

What is the cut off time for phone payments?

The answers, where available, agreed previous question, except for American Express reps, who said that phone payments must be received by 8 p.m. to be credited on the day they are made.

If I pay by Phone will I be charged a fee? (The question is only for non-expedited payments.) If so, how much? (By instititution)

15 institutions reported having a phone payment fee. (See table below).
Fees ranged from $2 (Pulaski Bank) to $15 (Bank of America, Citi)

Agent assistance: Capital One and Chase charge $14.95 for making a payment with a representative (their automated phone payment fee is about $10.) Discover charges a $10 fee for making a payment with a representative; the automated system is free. Wells Fargo charges $12 for making a payment with a representative; and $8 if you are paying with a non-Wells Fargo account. Navy Federal FCU charges $5 for phone payments when paying with a non-Navy Federal FCU account.

HSBC said it had a fee but would not provide the amount.

Payment Fees (pay-to-pay fees)

Financial Institution	Pay by phone fee (non expedited)	Expedited payment fee	Deadline (if any)
Amalgamated Bank of Chicago	$3.00
Bank of America	$15.00	$15.00	48 hours before due date
Capital One	$10; $14.95 to pay while speaking to a rep.)	Same	Before 3 p.m. online, 6 p.m. by phone
Chase	$14.95 for speaking to an advisor; $9.95 (automated)	$14.95	Same day posting
Citi	$14.95	$14.95	Same day posting
Digital Federal Credit Union	$5.00
Discover	$10 if you speak with a representative		$5
HSBC	No answer could be obtained.
Navy Federal Credit Union	$5 if paying from an account with another bank
Pentagon FCU	$5.00
Pulaski Bank and Trust	$2.00
Simmons First National Bank	$12.00
Town North Bank	$10.00
US Bank	$10.00
Wells Fargo	If paying with another bank, $8; Speaking with a representative, $12

If I pay Online will I be charged a fee? If so, how much?

None of the surveyed cards had a fee to pay online (unless it is a “rush” or expedited payment, see next question).

Is there an expedited payment fee? For expedited payments by phone, how much?

Bank of America ($15), Capital One ($10), Chase ($14.95), Citi ($14.95)

For expedited payments online, how much?

Bank of America ($15), Chase ($14.95)

How many days before the due date does the expedited payment fee apply?

All institutions mentioned in previous questions allowed expedited payments to be made on the due date, except Bank of America, which said that online payments made within 48 hours of the due date will be charged the fee in order to be credited as on time.

What is the fee for being Over the Credit Limit?

36 of the 39 surveyed credit cards have over limit fees

• Average over-limit fee on these 36 cards: $31.89

No fee: American Express Clear card (although Amex does charge over limit fees on its other cards of $35), Capital One No Hassle Miles Reward card (other Capital One cards have fees of $19-$39 depending on the cardholder’s balance), and First Command Bank.

Flat fees: 27 cards

• High fee: $39 (Addison Ave. FCU, Chase, Citi and US Bank)
• Low fee: $10 – (Golden 1 FCU)

Tiered fees tied to balance: 9 cards

What is the Returned Payment Fee? (By issuer)

Fee is charged if your payment check to the credit card company bounces.

• All issuers had this fee. (However, the American Express Clear Card has no fees.)
• The average fee at issuers with a fee is $31.58.
• Fees ranged from $8 (Golden 1 FCU and Navy FCU) to $39 (numerous banks)

Do you charge a fee if I buy something while in a foreign country? These may be called foreign transaction fees or foreign currency conversion fees. If yes, what is the fee? Does this amount include the 1% fee from MasterCard or VISA or is it just your bank fee?

Range: 1%-3%. (This includes—or is—Visa and MasterCard charge a fee of 1% of the purchase amount to convert purchases made in a foreign currency.)

American Express is an exception to this because it uses a “ foreign currency conversion rate mark-up of 2.7%.”

First Command Bank and Capital One have no fee. (37 of 39 surveyed cards have this fee)

Foreign transaction/currency conversion fees

(Issuers marked with a star also charge this on purchases made in foreign currency, from a foreign-based company or involving a foreign-based bank.)

Issuer	Fee (Percent of Amount Converted from Foreign Money)
Addison Avenue FCU	1.00%
American Airlines-FCU	1.00%
Everbank*	1.00%
First Command Bank	1.00%
Golden 1 FCU	1.00%
Navy FCU	1.00%
Pentagon FCU*	1.00%
Digital FCU	2.00%
Discover*	2.00%, but cannot generally be used overseas
Iberia Bank	2.00%
Pulaski Bank and Trust*	2.00%
Simmons First*	2.00%
American Express3	2.70%
Amalgamated Bank of Chicago*	3.00%
Bank of America*	3.00%
Chase*	3.00%
Citi*	3.00%
HSBC Bank	3.00%
Town North Bank	3.00%
U.S. Bank*	3.00%
Wells Fargo*	3.00%
Capital One	No fee
First Command Bank	No fee

³ Foreign currency conversion rate mark-up of 2.7% applies to any transaction submitted by a merchant to American Express in a currency other than the currency of the country in which the cardholder’s card is based. The company increases the conversion rate by 2.7% and uses the resulting marked-up rate to convert the merchant’s foreign currency to US dollars.

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Do you charge this fee if I purchase items on line or by phone from a business in a foreign country? (By institution)

12 – Yes. (Amalgamated Bank of Chicago, Bank of America, Chase, Citi, Discover, Everbank, Pentagon FCU, Pulaski Bank and Trust, Simmons First, Town North, US Bank, Wells Fargo)

3 – No. (First Command Bank, Capital One, Golden 1 FCU)

1 – American Express: The “foreign currency conversion rate mark-up” of 2.7% applies to any transaction submitted by a merchant to American Express in a foreign currency.

6 – No answer could be obtained from the remaining institutions either because reps said they did not know the answer or we could not reach a person to ask the question. Note: This information is rarely disclosed on online solicitations/applications.

Finance charges

What balance calculation method do you use? (Financial institutions)

All (22) surveyed companies use the Average Daily Balance Including New Purchases method of balance calculation. Note: We did not find any cards using “double cycle billing,” which will be prohibited after July 2010.

How do you calculate minimum monthly payment (% of balance)? Does the minimum monthly payment include: [Check all that apply] Please provide any other monthly minimum payment formula if not covered in check boxes.

1. Addison Avenue FCU: 2% or $20, whichever is greater (all new interest and fees included in payment)
2. Amalgamated Bank of Chicago: Not able to determine exact formula
3. American Airlines-FCU: 1% of balance, and all new interest, late fees and over the limit fees.
4. American Express: 1% of balance, and all new interest, late fees and over the limit fees
5. Bank of America: 1% if have late fees or finance charges, or 2% if higher
6. Capital One: Higher of 1% of outstanding balance with interest and fees, or $15
7. Chase: Higher of 2% of new balance, or 1% of balance with interest and fees, or $10
8. Citi: (Varies by card) 1.5% of balance, plus past due amounts or late fees, or $20.
9. Digital FCU: 1% of balance, with all interest and fees
10. Discover: Higher of 2% of balance or $15
11. Everbank: Unable to obtain answer
12. First Command Bank: 2% of new balance, or entire new balance, or $50, whichever is greater, or amount past overdue plus over credit limit
13. Golden 1 FCU: 2% of balance
14. Iberia Bank: Unable to obtain answer
15. HSBC Bank: Higher of 1% of new balance plus interest or fees, or $15
16. Navy FCU: 1% of balance plus all interest and fees
17. Pentagon FCU: Greater of $15 or 2%
18. Pulaski Bank and Trust: 2% of balance
19. Simmons First: 1% of balance
20. Town North Bank: 1% of balance, with all new interest and fees
21. US Bank: $10 minimum or 1% of balance
22. Wells Fargo: 1% of outstanding balance or $15

Residual interest: If I had a balance for a couple months, but then paid it off in full, would you charge me any more interest in the following month on the balance I just paid in full?

8 – Yes (American Express, Bank of America, Capital One, Chase, Citi, Town North Bank, US Bank, Wells Fargo)
2 – Not answered (Everbank, Iberia)
2 – Don’t Know (Addison Avenue Credit Union, Digital Credit Union)
10 – No (Note: This question is generally misunderstood by reps, so we believe the practice of residual interest is much more common than can be verified among surveyed banks.)

Change of terms

Can you increase my APR or change my terms “any time for any reason”? (Note: Answers based on 22 financial institutions.)

15 – Yes
6 – No (Addison Avenue Credit Union, Digital Federal Credit Union, Golden 1 FCU, Navy Federal Credit Union, Pulaski Bank and Trust, Simmons First National Bank)
1 – Don’t Know (American Airlines FCU)

If I pay my balance on time and in full every month, could you raise my interest rate? (Note: Answers based on 22 financial institutions.)

9 – Yes (American Express, Bank of America, Capital One, Chase, Citi, Everbank, HSBC, US Bank, Wells Fargo).
3 – No (American Airlines FCU, Discover, First Command Bank, Golden 1 FCU, Navy Federal Credit Union, Pentagon FCU, Pulaski Bank and Trust,Simmons First National Bank, Town North Bank)
2 – Don’t Know (Addison Ave Credit Union and Digital Federal Credit Union)
1 – Not answered (Iberia Bank)

Do you raise my interest rate because of my credit record with other credit cards or lenders?

2 - Yes
US Bank and HSBC

2 – Not answered (Everbank, Iberia)

18- No
(Chase*, Pentagon FCU, Town North Bank, Addison Avenue Credit Union, Amalgamated Bank of Chicago, American Airlines FCU, American Express, Bank of America, Capital One, Digital Federal Credit Union, Discover, First Command Bank, Golden 1 FCU, HSBC, Navy Federal Credit Union, Pulaski Bank and Trust, Simmons First National Bank)

*Chase does not use information about a cardholder’s performance with other creditors as a reason to initiate an increase to a rate. However, an individual’s overall credit profile is used for other decisions such as approving or declining an application, and for setting appropriate credit lines.

Which, if any, of the following situations might cause my interest rate to go up? (Check the reasons listed in the fine print. Ask about any not listed in the fine print.) Are there any other reasons why my rate might go up?

1. Addison Avenue Credit Union: Credit score got worse
2. Amalgamated Bank of Chicago: Credit score got worse
3. American Airlines FCU: Market conditions; Because of the economy; Never unless in default
4. American Express: Because of the economy; Credit score got worse; Defaults with other creditors; Market conditions; Competitive factors
5. Bank of America: Credit score got worse; Paying another company late; Defaults with other creditors; Too much debt; Increased use of my credit line; Because of the economy; Market conditions; Too many inquiries on credit report
6. Capital One: Credit score got worse; Too much debt; Too many inquiries on credit report; Market conditions
7. Chase: Late payment with Chase; 1 x 30 days late with Chase; 2 x 30 days late with Chase; 1 x 60 days late with Chase; 1 x 90 days late with Chase; Over limit on his/her Chase account (where over limit fee is actually assessed); A payment returned NSF (Non-Sufficient Funds)
8. Citi: Market conditions; Paying another company late; Defaults with other creditors; Credit score got worse; Too much debt; Increased use of my credit line; Too many inquiries on credit report; Competitive factors
9. Digital Federal Credit Union: Credit score got worse; Increased use of my credit line
10. Discover: Market conditions; Because of the economy
11. Discover: Late once; over limit twice; Paying Discover late; Miss payment
12. Everbank: No answer could be obtained
13. First Command Bank: Golden 1 FCU; Because of the economy
14. HSBC: Too much debt; Too many credit cards; Credit score got worse; Defaults with other creditors; Paying another company late
15. Iberia: No answer could be obtained
16. Navy Federal Credit Union: Credit score got worse; Dramatic change to credit score and it plummets.
17. Pentagon FCU: Credit score got worse
18. Pulaski Bank and Trust: Defaults with other creditors; Too much debt
19. Simmons First National Bank: No answer could be obtained.
20. Town North Bank: Credit score got worse
21. US Bank: Paying another company late; Defaults with other creditors; Credit score got worse; Too many credit cards; Too much debt; Increased use of my credit line; Too many inquiries on credit report; Market conditions; Because of the economy; Competitive factors; Paying another company late.
22. Wells Fargo: Paying another company late; Defaults with other creditors; Credit score got worse; Too much debt; Too many credit cards; Increased use of my credit line; Too many inquiries on credit report; Market conditions; Competitive factors; Because of the economy

Would you notify me before you change my interest rate? Note: As of Aug. 20, 2009, companies will be required to provide 45 days advance notice of certain changes in terms, including interest rate increases outside of changes in variable rates tied to an index that changes.

16 institutions said that, yes, you would be notified in advance of a change in the interest rate (outside of changes in variable rates tied to an index that changes).

3 did not answer ( Navy Federal Credit Union, Simmons First National Bank and Iberia Bank)

3 answered No. (Chase, First Command Bank and Amalgamated Bank of Chicago.) Note: Despite the No answer for Chase, the company reps said that the company would send a letter “3 months in advance” of a rate change, which may mean that the representatives are being educated about the new law.

How would you let me know if you applied a different rate to my account? (By bank). How far in advance would you notify me about a higher interest rate?

Most companies said they would provide advance notice in a letter or bill stuffer, and that the advance notice would be given before the next billing cycle. (Under current law, until Aug. 20, 2009, no advance notice of rate changes is required.)

Could I ever get back to my regular APR? What do I have to do to get back to the lower rate?

American Airlines FCU and HSBC said that cardholders can never get back to a lower rate.
9 institutions (Amalgamated Bank of Chicago, Bank of America, Capital One, Chase, Discover, Pulaski Bank and Trust, Town North Bank, US Bank) would consider a lower rate eventually if the cardholder asked for it. See table below for more details

“Map to a Lower Rate”

This is the ability for a cardholder who has been penalized with a higher interest rate to return to the previous rate.

Issuer	Can I get back to old APR after a rate increase?	What do I have to do to get back to lower APR?
Addison Avenue Credit Union	Don't Know	Not sure
Amalgamated Bank of Chicago	Yes	Pay on time for 6 consecutive months
American Airlines FCU	No
American Express	Don't Know	Unable to obtain answer
Bank of America	Yes	Pay on time for 6 consecutive months & will reduce rate by 2% or as much as back to [original] rate.
Capital One	Yes	Maintain payments on time
Chase	Yes	Depends on customer performance and the market rate.
Citi	Don't Know	You can always ask for promotional rates
Digital Federal Credit Union	Don't Know	Unable to obtain answer.
Discover	Yes	9 consecutive billing cycles paying on time.
Everbank	Unable to obtain answer.	Unable to obtain answer.
First Command Bank	Unable to obtain answer.	Unable to obtain answer.
Golden 1 FCU	Don't Know	Unable to obtain answer.
HSBC	No
Iberia	Unable to obtain answer.	Unable to obtain answer.
Navy Federal Credit Union	Unable to obtain answer.	Unable to obtain answer.
Pentagon FCU	Don't Know	Unable to obtain answer.
Pulaski Bank and Trust	Yes	Pay all fees
Simmons First National Bank	Unable to obtain answer.	Unable to obtain answer.
Town North Bank	Yes	Pay on time for 6 continuous cycles
US Bank	Yes	Ask for a lower rate, wait 6 months, if at next quarter your credit score improves then yes.
Wells Fargo	Yes	Good record, get back in good standing for 6 months or call and ask to lower it.

If I don’t agree to the new rate what are my rights? If Opt Out is checked, ask for a detailed explanation of how the Opt Out works. If I opt out do I have to stop using the card?

9 institutions (40%) (Bank of America, Capital One, American Express, Citi, Chase, Discover, Pulaski Bank and Trust, US Bank, Wells Fargo) allow cardholders to opt out of a rate increase, close the card and pay off the balance under the old terms. When notified, cardholders must reply to the bank in writing by the deadline provided to accept the offer.
In all cases, cardholders who accept the opt out to pay at the old terms must close the card.

Miscellaneous questions

What kind of credit do I have to have to get this card? [Based on pre-scripted choices, including “don’t know.”]

Most cards we surveyed required Good or Excellent credit in order to qualify for the lowest rate (“par rate”). The answers to this question are presented in the table below.

Credit score needed to get the best (“par”) rate on the listed card.

Issuer	Card Name	Credit rating to get card
Addison Avenue Credit Union	Visa Cash Back Platinum Card	Good credit (FICO 700-759)
Amalgamated Bank of Chicago	Standard Plus Mastercard	Excellent credit (FICO 760-850)
American Airlines FCU	Visa Platinum Rewards Cards	Good credit (FICO 700-759)
American Express	Blue Cash Card	Excellent credit (FICO 760-850)
American Express	Delta Skymiles Platinum	Good credit (FICO 700-759)
American Express	Clear Card	Okay credit (FICO 650-699)
Bank of America	Platinum Plus Cash Reward Mastercard	Don't Know
Bank of America	Platinum Plus Visa	Excellent credit (FICO 760-850)
Bank of America	Accelerated Cash Rewards American Express Card	Don't Know
Bank of America	Virgin Atlantic American Express Card (white card)	Don't Know
Capital One	Standard Platinum	Okay credit (FICO 650-699)
Capital One	Platinum Prestige	Excellent credit (FICO 760-850)
Capital One	No Hassle Miles Reward	Excellent credit (FICO 760-850)
Chase	FreedomSM card	Don't Know
Chase	PerfectCard Mastercard	No answer could be obtained
Chase	Platinum Visa	Don't Know
Citi	Platinum Select Master Card	Don't Know
Citi	Diamond Preferred Rewards Card	Don't Know
Citibank N.A.	AT&T Universal Savings Platinum	Good credit (FICO 700-759)
Digital Federal Credit Union	Platinum Rewards	Good credit (FICO 700-759)
Discover	Miles	Excellent credit (FICO 760-850)
Discover	More Platinum Card	Excellent credit (FICO 760-850)
Discover	Open Road	Excellent credit (FICO 760-850)
Everbank	Visa Platinum	Not-so-great credit is okay (Below FICO 650)
First Command Bank	Platinum Visa Card	Good credit (FICO 700-759)
		Excellent credit (FICO 760-850)
Golden 1 FCU	Visa Platinum Reward	Excellent credit (FICO 760-850)
		Excellent credit (FICO 760-850)
HSBC	HSBC Cash or Fly Rewards Mastercard	Good credit (FICO 700-759)
HSBC	Platinum Visa with Cash Back	Excellent credit (FICO 760-850)
Iberia	Visa Classic	No answer could be obtained
Navy Federal Credit Union	MasterCard goRewards	Good credit (FICO 700-759)
Pentagon FCU	Visa Platinum Reward	Good credit (FICO 700-759)
Pulaski Bank and Trust	Visa Classic	Excellent credit (FICO 760-850)
Simmons First National Bank	Visa Platinum Card	Don't Know
Town North Bank	TNB Platinum Mastercard	Good credit (FICO 700-759)
US Bank	FlexPerks Select Rewards Visa Card	No answer could be obtained
US Bank	Visa Platinum	Good credit (FICO 700-759)
US Bank	Travel Rewards Visa Platinum	Don't Know
Wells Fargo	Cash Back Platinum Card	Not-so-great credit is okay (Below FICO 650)
Wells Fargo	Visa Platinum Card	Don't Know

If my payment was not received by the due date, would you prevent me from using the card until my payment is received?

7 institutions indicated that this could occur on some accounts: Capital One, Chase, Citi, First Command Bank, Pulaski Bank and Trust, Simmons First National Bank, US Bank.

Authorized users: What is the minimum age for an authorized user on this account? Note: We could not obtain answers from Iberia Bank and Golden 1 Federal Credit Union. (Authorized users are people who are provided with a card in their own name as a sub account on a primary user’s account. Authorized users are not liable for any of the charges—the primary account holder is responsible for repayment.)

No minimum age: (Any age can get an authorized user card.) Bank of America, Citi, Chase, Discover, HSBC, Simmons First, US Bank

No answer could be obtained from Golden 1 FCU and Iberia Bank

Age 12: Pulaski Bank and Trust
Age 14: Addison Avenue Credit Union, American Express, Capital One, Navy Federal Credit Union
Age 15: American Airlines FCU, Digital Federal Credit Union, Pentagon FCU
Age 16: Amalgamated Bank of Chicago, American Express (Blue Cash), Town North Bank

How often do you report my account information to credit reporting agencies?

16 – Monthly
2 – Bi-annually (Digital Federal Credit Union, Navy Federal Credit Union)
1 – Varies (Iberia Bank)
2 – Yearly (Golden 1 FCU and Pulaski Bank and Trust)
1 – Weekly (HSBC)

Do you report my balance AND credit limit to reporting agencies?

Of the banks that answered this question, most answered “yes.”

Do you require arbitration to settle disputes?

Yes - (11 issuers) American Express, Bank of America, Capital One, Chase², Citi, Discover³, Golden 1 FCU, Pulaski Bank and Trust, Simmons First National Bank, US Bank, Wells Fargo

No - (7 issuers) Addison Avenue Credit Union, Amalgamated Bank of Chicago, American Airlines FCU, Digital Federal Credit Union, First Command Bank, Navy Federal Credit Union, Town North Bank

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² Chase has stopped filing new arbitration claims (as of 7/23) is re-evaluating its use of mandatory arbitration.

³ This notice is on Discover card solicitations and application materials: ARBITRATION: The Cardmember Agreement provides that we may choose to resolve a claim relating to your account by binding arbitration, in which case, you will not have the right to have that claim resolved by a judge or jury and you will not have the right to participate in a class action in court or arbitration. You may reject the arbitration provision with respect to your new account within 30 days after receiving your Card. For restrictions and details, write to us at PO Box 15192, Wilmington, DE 19886-1020.