Creepy credit card crawlies
By John Latta • Bankrate.com

Credit cards are everywhere, and almost everyone has at least one.

They're convenient and easy to use, but our readers have found that dealing with credit card companies can turn a cuddly puppy of a person into a raging werewolf when their credit rating is at stake.

We received a number of stories about "zombie accounts" -- cases where credit card users thought they had paid off their bill in full and were rid of their tormentors, only to find new charges appearing on those "dead" accounts.

There was the case of one man who thought he had paid of his credit card bill in full. But there were a few cents owing because of some interest added by his card company, First Witches Ghostbank, after they billed his total payment. He couldn't get the card company to agree that he had paid in full; there were still those pesky few cents they added. So now, he e-mails us, the only monthly activity in his card account is the $29 late fee, and the total bill is more than $200. Our advice: instead of eating your own flesh, cut off a pound and pay this vampire off.

What about the case of the man who paid off his card bill in full at Bank of the Living Dead and asked that the account be closed. He was assured over the phone it was closed. Then he got a letter saying his credit limit was now zero and would remain that way until he paid everything off. Then, he says, the bank hit him with a interest charge of three dollars and a few cents AND charged him a $29 over-limit fee because his credit line was zero.

One woman wrote to us with a tale of two credit cards. One of the card companies, Horrible Headless Horsebank, bought the other company's accounts. I don't want two cards, she thought, so she asked HHH to transfer her balance from the other company's card over to the new card. "No problem," said HHH with a cheerful cackle. But there was a problem -- the old card had been at 4.99 percent and suddenly our e-mailer found her transferred amount was being charged the cash advance rate of 19.8 percent at HHH. "This is at the same time they are offering a 3.9 percent promotional rate for balance transfers on my statement." Our writer skipped to a bank offering 2.9 percent.

What about the couple that went into credit management? When cardholder GraveyardCard found out, it doubled the couple's interest rate to 23.99 percent. "Now our finance charge is higher than our minimum payment every month," they write. And they aren't the only ones in this upside down relationship we've heard from.

One e-mailer who had a stellar record found his credit card interest rate at Vampire General leap by 50 percent, from 14.99 percent to 22.98 percent. So he contacted the card company about this ghoul card.

"No one knew why," he writes. "Everyone said that I have made payments on time, I am not past due, I am not over the limit and my balance is lower now than it has been in the past two years. The only comment they could make was that 'someone in our credit department saw something on your credit report and decided to raise your rate.' " Our writer checked his credit report. Clean. Then he went to try and find the person at the card company who had raised his rate. Do you think he ever found him? He was gone like a ghost in the night.

Consider the sad case of the cardholder who was left paralyzed from the hips down in a car accident. This e-mailer wrote the card companies about what had happened, and says, "They found that the right thing to do was to cut me off. It wasn't long after that we declared bankruptcy ... we would not have had to if we could have gotten some help from our friendly lender. My credit is a joke today ... it is so bad I can't borrow a cup of sugar from my neighbor."

Another cardholder tells an equally shocking story. After using a card from one company for more than seven years without ever paying a bill late or having any other credit problems, her credit card was canceled. "The reason: I called to explain that my husband is disabled, I am unable to work for six weeks due to surgery and asked if there was any help I could get ... (a lowered rate or anything) ... They closed my account with no notification and said, 'We are afraid you are going to file bankruptcy and we would lose that money.' "

We could provide New York City with enough paper for a blizzard of a parade simply by printing out all the e-mails that talked about late fees on credit card statements. One woman, however, summed up all the frustration with her letter:

"Their trick into charging late fees went something like this. The statement would arrive in the mail on the first. The bill would be due on the fifth. Even if you paid immediately as soon as the bill was received, you (would) be charged a late fee of, I believe, $29. If you called to complain, they would tell you that you need to send your payment at least 10 days prior to the billing date. You would argue that you only got your bill five days in advance so it would not be possible. They did not accept that argument. Also, there was no guarantee of getting your bills there on time with express mail because they would only give you a post office box for a mailing address and no one would sign for your letter."

Then there was the guy who used a credit counselor when facing cash flow problems. The counseling agency talked to credit card companies and in one case got payments cut in half. But the BooHooToYou Card Company, after agreeing to the cut, then reported the account as late because half the old due amount wasn't paid.

-- Posted: Oct. 29, 1999