Credit card customers fight back
By Lucy Lazarony • Bankrate.com

Fire off an angry letter. Hire an attorney. Refuse to use credit cards ever again.

These are ways Bankrate.com readers are striking back against credit card companies. These folks are fed up with paying late fees for on-time payments and being slammed with interest rate hikes. And they're doing something about it.

Send it off in a letter
Cindy Rivera of Brooklyn, N.Y., put it in writing.

For five years, Rivera has been a Capital One customer and for five years she had no problems.

All that changed this summer. For three straight months she was charged late fees even though she paid her bills on time.

"I'm the type of person, when I get the bill I send it out right away," Rivera says.

To make matters worse, the late payments showed up on her husband's credit report and the couple is planning to buy a house. She tried calling Capital One but each time she called she was told, "A supervisor will get back to you." Nobody ever called.

By the time month three rolled around, Rivera had had enough. She was charged a $25 over-the-limit fee in addition to a $25 late fee. The reason? The previous late fees had pushed her over her credit limit. She wasn't too thrilled about paying all that extra interest either.

"That's over $100 and I had no idea why," Rivera says. "I was so fed up at them. So I wrote a letter. I was so angry."

She explained in detail how dissatisfied she was with Capital One and why she wanted her account closed immediately.

Two weeks later she got a call from Capital One. A customer service representative offered to wipe out the fees and remove the late pay status from her husband's credit report.

"Everything is straightened out, finally. I hope it won't happen again," Rivera says. "It's just crazy."

The Capital One rep even offered to increase Rivera's credit line and lower her interest rate. Rivera took the lower interest rate.

"She was being very nice and I thought, 'Finally,' " Rivera recalls.

Her experience has left her wary.

"I'm going to see how it goes for the next few months," Rivera says. "But if it starts up again I'll just close it."

Her advice for people who are having run-ins with credit card companies over fees?

"Calling doesn't change anything. Write a letter as soon as possible to avoid the hassle," Rivera says. "If you let it wait, nothing's going to be solved."

Checking it once, checking it twice
Michael Martin of Myrtle Creek, Ore., learned the hard way. Things just kept getting worse and worse with his Visa card from MBNA America.

The card promised a 3.9 percent rate on balance transfers that would last until the balance was paid off and a 3.9 percent teaser rate for purchases that would bump up to 9.9 percent after a couple of months.

Martin received his first billing statement in October 1999. By January 2000, he was being charged 5.99 percent for balance transfers and 12.99 percent for purchases. In April, the annual percentage rate for new purchases bumped up to 13.99 percent.

The real rate shocker came in July. The interest rates on balance transfers and new purchases were raised to 19.98 percent.

"The interest rate went crazy," Martin says. "At that point, I called them. When I asked them why they did it they said it was because the Fed had raised interest rates."

MBNA offered to lower his interest rates on balance transfers and purchases to 15.99 percent.

"As soon as I get my bill this month I will pay off the balance. Needless to say I won't be dealing much with them," Martin says.

"Then again, they don't care. They got what they wanted."

While Martin hung on to his monthly statements, he cannot find any notifications from MBNA about the jumps in interest rates.

"That must have been the little thing inside that everyone throws out because I definitely don't have it," Martin says. "They've hidden it. You and I both know that's exactly what they did. They hid it so they could raise interest rates without anybody noticing it."

He now reads every single word of every piece of correspondence sent to him by a credit card company and advises others to do the same.

"The most important thing right now is to read everything that you've received from a credit card company and save it ... If you have questions, contact the credit card company.

"You just have to be careful. I can say that 100 times but how careful have I been? You would think at 50 years old I would learn by now ... They just come up with new ways to bite you in the a--."

Let the lawyers loose
Cory Fine of Jacksonville, Fla., decided to sic "pit bull" attorneys on credit card issuers that kept charging him fees.

"I have found that the best credit card insurance is a pre-paid legal service. For a small sum each month I can have a group of pit bull lawyers send my credit card issuers a nasty, threatening letter every time they try to illegally reap late fees and over-the-limit fees," explains Fine in a recent e-mail to Bankrate.com.

Each time an issuer received such a letter they would claim "inadvertent error" and drop the fee.

"We've used that a number of times with one credit card in particular -- Cross Country Bank," Fine says.

He has had a credit card with Cross Country Bank since 1997. While those nasty letters from attorneys got fees waived, new fees were waiting the next month.

"It was every single month. It got to be ridiculous," Fine says. "These are games. It's incredible that they do these things."

It all came to a stop about a year ago when Fine signed up for online bill pay with his bank -- Key Bank. The next time Fine was charged a late fee, Key Bank stepped in. Key Bank informed Cross Country Bank that it knew when Fine's payment was sent and that it was going to initiate an investigation. Fine's payments have been posted promptly ever since.

"All of the sudden the day they got it, it's deposited," Fine says. "Last week I called them up and paid off my balance and said, 'Forget it.'

"As long as banks and credit card companies play these kinds of games they deserve to be sued."

Fine found some comfort in reading a recent Bankrate.com article about fed-up credit card customers.

"It really hit home," Fine says. "In a way it makes you feel good, in a perverse sort of way. You're not the only one out there."

Never again, that's that
After her experience with First USA, Lauri Kraus of Denver has vowed to never use credit cards again.

"Never. Never. I was so stressed. It just isn't worth it," Kraus says. "The best advice I can give is avoid them at all costs."

In 1996, she moved from Minnesota to Colorado. That's when the problems started. Some of her payments were tagged as late even though she mailed them on time.

"I sent a letter saying I had moved and I thought seven days was plenty of time to mail the payment," Kraus says.

First USA did not respond.

"Then I had the bad fortune to have someone steal my identity out here," Kraus says.

In 1997, a thief opened a bank account with her name and wrote all kinds of bad checks, damaging Kraus' credit.

"It's like you're helpless," she says of identity theft. "The first one that came in was from Kentucky Fried Chicken and I'm a vegetarian. I just went berserk."

Through all of this, Kraus continued to pay $150 a month on her First USA card.

"It was extra so I could get it paid off," Kraus says.

But the $150 did not even cover the minimum payment once First USA jacked up her interest rate to 24 percent about a year ago.

"When they raised the interest rate it was impossible to keep up. It was so frustrating. I was so angry."

To her relief, she managed to pay off the card in May 2000. She paid off the balance two weeks before the due date.

"The next month I got a bill for $29 for being over-the-limit and my balance was zero," Kraus seethes.

Still, she is doing her best to put her experience with First USA behind her.

"I'm getting less stressed about it as we go," Kraus says.

A fresh wave of anger hit her when she read about other people's battles with credit card companies in a Bankrate.com article.

"As I started reading about what happened to other people it was like, 'These people are evil.'

"I think people need to find out they practically give their lives over if they get into trouble with a credit card company. You're just a number in the computer. They don't care."

Dana Horne of New Haverhill, N.H., has had it with credit card companies.

"Even as I read the article relating to consumer fraud with credit cards, my anger was boiling," Horne writes in a recent e-mail to Bankrate.com. "As a consumer I am sick of being taken advantage of by credit card companies. I am tired of having to take my bill and scrutinize it, and spend valuable time on the phone clearing up charges that should not have been applied in the first place .... So, in my effort to fight back, I will not have a credit card again."

Ten years ago, Horne, a single mom with three children, cut up her credit cards. She had racked up almost $10,000 in debt.

"You're enslaved to payments with interest," Horne says. "I got really irate thinking some guy was lining his own pocket on my interest."

She has whittled down her credit card debt to $1,500. She has not used credit cards in a decade. Instead, she pays with debit cards and layaway plans.

"Do not under any circumstances apply for a credit card. There are other ways of getting what you want," Horne says. "If there's a material thing you really want, save up for it. Buy it outright. Don't pay interest on it. It feels a whole lot better."

-- Posted: Sept. 8, 2000