CIBC credit card bullshit

[gusl]

This month I got charged $20 for going over my credit card's limit and not paying the difference before the billing date (how was I to know that I was over?!). This was apparently in the small print of the cardholder agreement.

I called them and asked them to make sure my card gets blocked before I went over (rather than $15 after), in order to spare me from unnecessary fees. They said that this isn't possible, which essentially forces me to monitor my balance. Ah, the anger!

What annoys me most is that when I was signing up, I discussed it at length with the bank lady, asking if there were any other fees I should be aware of, etc, and she said no.

Here's a really simple idea for helping customers: simulation games. Simulate using your credit card over some time, and see what happens at the end. Don't just talk about the future abstractly... simulate it in detail, and see what issues come up. This one certainly would have.

If their goal isn't to trick me out of my money, they should listen to ideas like this.

My credit is still perfect, however.

Comments

[gustavolacerda.livejournal.com]

yes, I read it, but as with most contracts of this sort, to actually understand everything in it and its consequences would have taken me far too long. There's all the legalese and boilerplate, etc... which is why lawyers exist.

I pay my balance every month, and have a pretty small credit limit. If they prevented me from going over (which is what I assumed), this would never be a problem. But instead, they block the card right after I go over the limit! Just so they can charge me this silly fee.

[leigh-a.livejournal.com]

I understood that when I read it the first time.

What I still don't understand is why you think you're entitled to not keep track of your balance. I feel the same way about people who rage about overdraft fees in the US. Yeah, they suck, but it's up to the consumer to know the guidelines and take care of his/her own money. People are not entitled to bank accounts! That's why they come with fees.

[leigh-a.livejournal.com]

*people are not entitled to bank accounts/credit cards

[gustavolacerda.livejournal.com]

Entitlement? I'm bitching because I think this is absurd... I'm not claiming legal entitlement.

I'm happy to pay for banking services. I'm not happy if the "payment" is in the form of trickery that keeps me on my toes. And I'm also unhappy that they very conveniently make it hard for the customer to know the rules beforehand.

[leigh-a.livejournal.com]

I'm not sure when using the word "entitlement" changed to automatically having legal connotations? But what I meant is that people often seem to treat bank accounts and credit as some sort of human right when it's not at all!

Banks don't make it hard to know the rules beforehand. The only banking fee I've paid in the last decade was a transfer I initiated between two credit unions because I was willing to pay for the luxury of having it happen faster than doing things through cheques. You seriously just need to read the fine print and follow the rules. It's not up to banks to baby their customers unless it will attract so many customers that they'll make a better profit.

[altamira16.livejournal.com]

Without banks, you wouldn't have a world economy. Banks are fairly necessary and anyone should be able to get one. Now they have to have more proof of identity than in the past, but this is a security measure.

[leigh-a.livejournal.com]

<< Everyone should be able to get one. >>

I never suggested that people should be restricted from bank accounts if they want them. I merely suggested that consumers have a responsibility to take care of their own interests.

[altamira16.livejournal.com]

Your argument that banks are not a human right was fairly non-sensical. There are very few things that are human rights. As a society gets wealthier, it expands its definition of human rights. In the lowest forms of society, might makes right is the only human right.

[bhudson.livejournal.com]

Why is it wrong to feel entitled to good and honest service from industries that offer services? And to feel annoyed when you get ripped off?

The banks used to block purchases beyond the credit limit. In the US, that changed early this decade when they quite explicitly decided they could increase their income by putting in fees. I don't know when that happened in Canada, but probably about the same time (although Canadian banks were already raking in fees back then to a much greater extent than in the US).

In the US, we have legislation in the works that would force banks to make it easy to know the rules beforehand. That suggests that many people find it hard to follow those 6-page, tiny-font documents full of legalese.

[leigh-a.livejournal.com]

Why is it wrong for banks to strategize to make a profit?

I don't think it's wrong to feel entitled to good and honest service from a bank, I merely think it's naive to expect a corporation to have your best interests in mind if you're not one of its shareholders.

[bhudson.livejournal.com]

I believe it is indeed wrong for a company to rip people off, just as it is wrong for a company to destroy the environment or somesuch bad behaviour. It may well be legal, but when wrong things that are legal start to happen, we should (a) get angry, then (b) change the laws.

[gustavolacerda.livejournal.com]

Entitlement is a very subjective notion, so the only meaningful meaning for me is the legal one.

[stepleton.livejournal.com]

Yeah, but again, why couldn't they just refuse to clear the charge that goes over? Do you really believe that scaring people into financial responsibility with overage charges is a useful strategy? Sure, we should be careful around ledges, but we still install railings.

[stepleton.livejournal.com]

Do you really believe that scaring people into financial responsibility with overage charges is a useful strategy?

On reflection given what you've written, I can see you clearly do not. But it shouldn't be wrong for people to assume that the bank is acting in good faith. I can't reconcile this overage charge with that assumption.

[leigh-a.livejournal.com]

I don't think the goal is to make people financially responsible. The goal is to make money off consumers who refuse to be smart and follow the rules, which I think is entirely reasonable. Since when are banks supposed to have altruistic intentions?

[stepleton.livejournal.com]

I think they have a moral responsibility to deal fairly. To you, hiding overage charges in an enormous, convoluted contract likely designed to overshoot the reading comprehension skills or patience of most its signers is fair: the information is there, after all. To me, it's deceptive and wrong. *shrug*

[leigh-a.livejournal.com]

I love it when people put words in my mouth. It's fun to watch. That was more a consequence of my main point: it's up to consumers to be responsible. You can avoid or at least intelligently minimize service fees without reading the contract just by knowing how much money you have, only spending what you have, and looking at the little menus of accounts and fees.

So, yeah, I also think that if someone doesn't follow this basic idea, or one like it and gets hit with a fee that they didn't bother to read about that they had it coming, but mostly I just wish consumers would be responsible in the first place.

[stepleton.livejournal.com]

Ha ha! Fair play is important! I wag my finger at you! PS: Here is what you think. I wish I had done it on purpose. Ah well, too dumb for irony, too dumb for long credit card contracts.

[altamira16.livejournal.com]

In the past, you would just simply get denied if a transaction was going to go over your limit. Hitting you with a huge fee that does not correspond to the cost of anything other than the fact that you went over some limit that the bank allowed you to go over seems silly.

These fees are essentially very short term loans at very high interest. The only real way to minimize the interest charged on this extra line of credit is to just make that last transaction something ridiculously huge.

Recently a couple of the major banks in the US quit some of the scams they were playing with the overdraft fees because banks are not very popular right now and putting a stop to this nonsense where a loan is not a loan is very popular right now.

I don't care what the policy is, but reordering checks that go over the limit in a way that allows a bank to collect the most overdraft fees is not in anyone's interest but the banks. They should put them through in the order that they receive them.

Banks are not entitled to ridiculousness. They are part of the essential infrastructure, and there should be some expectation that they work fairly and are secure. When the expectations of fairness and security go away, most everything else in the economy is on shaky ground.

[leigh-a.livejournal.com]

<< Banks are not entitled to ridiculousness. >>

I'll accept this. However, expecting customers to track their balances is not ridiculous.

I'm not going to claim to be an authority on US banking, which sounds like some sketchy stuff that you'd need to track your balance on paper like a granny to avoid. In Canada, however, you can avoid any fees just by checking your balance online because transactions go through immediately. Your balance displayed is always your true balance unless you write a check (and who writes cheques anymore aside from rent cheques or something?) or make a purchase somewhere where they process things manually (this is rare, obvious when it happens, and will show up on your account in a couple days if it happens).

They are still working fairly if they operate according to the contract they have with their client. Clients should not agree to contracts they can't follow. I don't think having to avoid overdrafts makes me feel like my money is less secure. Can you elaborate on that point?

[bhudson.livejournal.com]

Clients should not agree to contracts they can't follow.

According to this, most people should be homeless and shouldn't live in whatever country they live in (nor in any other). Also, it should take a few days to buy a plane ticket and at least a few hours to decide whether to upgrade iTunes from 9.0 to 9.0.1.

[leigh-a.livejournal.com]

I'm going to start picking out statements in a specific contexts and demanding that they be generalized now. What a brilliant debate technique!

[bhudson.livejournal.com]

Well, your argument certainly does appear to be that it's Gustavo's fault for not reading the deliberately unreadable legalese and trusting the banker's word, and in particular, he shouldn't be pissed off that the bank is ripping him off like it said it may do on page 3 of the agreement.

I am indeed generalizing to show that applying this principle in other fields means that society doesn't work. Perhaps you can enlighten me as to why credit cards are special and their contracts should rightly be read carefully, whereas other contracts that we customarily enter into on a daily basis don't demand such scrutiny.

[altamira16.livejournal.com]

Expecting customers to track their balance is asking them to invest more time to be diligent about something that they did not have to be diligent about if they paid in cash. You immediately know how much cash you have and whether or not you can spend it. If your credit card has a limit, it should be a true limit, not a "we will let you break this limit to charge you a fee" limit.

Reading legalese carefully does not help you when dealing with credit cards or cellphone contracts because these contracts are typically non-negotiable. The issuer of such contracts can modify them at any time.

I am not sure if it works like this in Canada or not, but I know that checking your balance at an ATM that is not affiliated with your bank is treated as a transaction, and you are charged a fee by the ATM you are using to check your balance at some places in the US.

[gustavolacerda.livejournal.com]

Thanks for your comments. I've declared this thread unproductive, and would people to stop replying to it.