I fell for it. The lure of a 20 percent discount on the spot and the promise of more coupons in my mailbox convinced me to open a Macy’s credit card even though I knew better. What I didn’t know is that I was opening two credit cards in one.

My new credit card is used as a Macy’s card when I shop at the department store. But it can also be used as a Visa card anywhere else.

How did I find this out? I paid my bill online, only to get a paper bill saying I hadn’t paid. I was charged a late fee and an exorbitant interest rate on the “unpaid” balance.

 When I called Macy’s, the customer service guy said I paid the Visa bill, but not the Macy’s. Can we say, confusion? I didn’t even know I had a Visa bill. And with a very high limit too.

The guy transferred my payment to the Macy’s bill. But I have to say I’m still a little peeved. Like a lot of people, I’m not using much credit these days. And I definitely don’t want that much open credit.

It just reminded me to be very, very careful with credit cards. Credit card companies are raising interest rates and cutting limits as they prepare for more stringent rules to take effect in February. Banks also say they are seeing higher default rates because of the economy. Read what my colleague Eileen Ambrose recently wrote about one man’s experience. 

Here are tips from Consumers Union about credit card traps to avoid.

(Photo courtesy of AP)

Posted by Andrea Walker at 9:13 AM | Permalink | Comments (1)
Categories: Banks, Consumer protection, Credit cards, Debt, Shopping
        

We told you yesterday about skimming, just one of the potential threats users of credit and debit cards face with every swipe.

On the other hand, paying with plastic definitely offers users a lot of advantages: you get the convenience of not carrying cash (which can be stolen) as well as multiple records of your purchases. These forms of electronic payment allow you to take advantage of lower prices on the Internet --- although we've told you about alternate payment methods such as Billeo and BillMeLater that are also available.

In some situations, you need a credit card to secure a reservation --- for hotel rooms or rental cars, for example.

And with credit ... 

Continue reading "Credit versus debit cards: what's in your wallet? " »

Posted by Liz Kay at 9:27 AM | Permalink | Comments (0)
Categories: Banks, Cheap/Frugal, Credit cards
        

Put your haggling skills to work in these three situations and you might get what you need for a lot less.

What's the key to negotiating? Be nice, respectful and realistic, said one business owner in a Marketplace Money story about bargaining in retail stores:

She says start by asking if there's any flexibility on the price. And don't forget to smile and maintain eye contact as you wheel and deal.

But where is it wise to negotiate a price? Americans are accustomed to haggling when it's clear there's a commission involved, such as on a new car or furniture. But what about ...

Continue reading "Negotiate in 3 unexpected places: Cheap Trick Thursday" »

Posted by Liz Kay at 7:41 AM | Permalink | Comments (3)
Categories: Banks, Budgeting, Cheap/Frugal, Healthcare, Personal finance, Shopping
        

The Heartland data breach resulted in credit card fraud for only a small number of consumers, according to the company --- though they won't say how small is small. But dozens of banks and credit unions had to alert their customers to the potential that they, too, could have been affected, in some cases issuing new credit and debit cards, just in case. Provident Bank sent out new cards and put transaction limits on debit cards and Sovereign Bank will send customers a new card at their request.

Tom Field of bankinfosecurity.com pointed out the largest examples of similar data breaches weren’t banks themselves. For example, hackers used malware to capture millions of card numbers from the Maine-based Hannaford Bros. supermarket chain last March. And just two weeks ago, T.J.Maxx and Marshalls offered a 15 percent off sale to apologize to customers for a similar hacker attack in 2007.

"None of these happened to a bank and yet the banks are left having to explain to their customers, and to bear the cost of replacing the cards."

Unlike banks, which must have federally mandated security systems, companies such as Heartland aren’t held to the same standards, even though they handle TONS of financial data, Field said.

So how can you protect yourself?

Continue reading "Data breaches and credit card fraud: protecting yourself" »

Posted by Liz Kay at 10:02 AM | Permalink | Comments (0)
Categories: Banks, Consumer protection, Credit cards, Identity theft, Naughty businesses/NBotW
        

Some Provident Bank customers have been impacted by a data breach at Heartland Payment Systems, a Princeton, N.J. processor of credit card payments.

Apparently, hackers used malicious software -- 'malware' -- to steal credit and debit card numbers from the card payment processing company last year. Some estimate that the Heartland breach could affect tens of millions of cardholders nationwide.

Only customers who received a new card in the mail and a letter from Provident had their card numbers compromised, company officials say. If you got the new card, activate it and destroy the old one. 

Then, watch your statements --- and check old ones --- for problem transactions, because according to this Washington Post blog, Heartland doesn't know how long the malware was reading the numbers.

Some Provident customers thought the letter was a hoax or a scam,

Continue reading "Provident customers affected by Heartland data breach" »

Posted by Liz Kay at 1:30 PM | Permalink | Comments (1)
Categories: Banks, Consumer protection, Identity theft, Naughty businesses/NBotW
        

For this Consumer Web Site of the Week, we want to know: how are you going to stick to your financial New Year's Resolutions this year?

Sometimes it's good to tell other people about your goals, so that they can help keep you honest by asking about them --- or helping you avoid temptation.

For example, if you want to spend less money eating out, your friends might help you by suggesting other activities than meeting for dinner.

Or you might consider a wider audience: some people start personal finance blogs to post their progress toward reducing debt, saving for something important or just changing their personal habits.

If you're too shy to tell your compatriots how much you owe, you could blog or participate in an online community anonymously or with a handle and get some support from strangers. One option is NetWorthIQ, where you can see where you stand and publicly --- but anonymously --- post your net worth.

You could also ...

Continue reading "CWSotW: help to keep your financial New Year's resolutions" »

Posted by Liz Kay at 7:06 AM | Permalink | Comments (0)
Categories: Banks, Budgeting, Consumer Web Site of the Week
        

The FDIC survey of overdraft fees released today confirms what consumer advocates have been saying for a long time: automated overdraft programs are big money makers for banks.

These are programs where banks automatically cover you if you overextend yourself, but hit you with a sizable fee for doing so. It used to be that lenders would just return your check or wouldn't let an electronic transaction go through if you didn't have enough money in your account.

The FDIC surveyed 1,171 banks. It found:

- Overdraft fees range from $10 to $38, with the median fee at $27.

- Banks earned $1.97 billion in 2006 from overdraft-related fees, making up 74 percent of the service charges collected on deposit accounts. Put another way, overdraft-related fees accounted for about 6 percent of the banks' total net operating revenues.

- Most of the banks that automatically cover overdrafts when customers make ATM withdrawals of debit-transactions at stores only told customers they didn't have enough money in the bank after their transaction was done. Only a small percentage notified customers beforehand, allowing them to cancel the transaction and avoid the overdraft fee.

- Consumers age 18 to 25 are most likely to trigger automated overdraft protection.

Banks say consumers like overdraft protection because it prevents embarrassment. But given the stiff fees and the fact we're in a recession where every dollar counts, a little embarrassment is worth saving as much as $38.

The FDIC says it conducted the survey so it can get information that can help shape public policy.

Posted by Eileen Ambrose at 1:27 PM | Permalink | Comments (5)
Categories: Banks
        

So remember when I told you earlier this week that your bank checking account fees are going up?

You know, the one where I said:

• ATM surcharges moved to $1.97 while the cost of using an outside ATM reached $1.46, bringing the total average cost of using an out-of-network ATM at $3.43.
• Bounced check fees rose 2.5 percent this year, up to $28.95.
• For interest bearing accounts, monthly service fees hit a new high at an average of $11.97. Minimum balances also set a record with an average balance of $3,461.84 needed to keep an account open.

Continue reading "Bank Fees vs. Credit Union Fees" »

Posted by Dan Thanh Dang at 5:00 PM | Permalink | Comments (2)
Categories: Banks, Budgeting
        

Here's something that shouldn't be too surprising. Bankrate's 2008 Checking Study, which was released this morning, showed that checking account fees have risen to record highs this year.

On average, Bankrate found that:

* ATM surcharges moved to $1.97 while the cost of using an outside ATM reached $1.46, bringing the total average cost of using an out-of-network ATM at $3.43.

* Bounced check fees rose 2.5 percent this year, up to $28.95.

* For interest bearing accounts, monthly service fees hit a new high at an average of $11.97. Minimum balances also set a record with an average balance of $3,461.84 needed to keep an account open.

Continue reading "Service Fees Increase for Bank Checking Accounts" »

Posted by Dan Thanh Dang at 1:34 PM | Permalink | Comments (2)
Categories: Banks
        

Remember when we told you we liked 1st Mariner Bank's new customer-friendly Web site and a nifty feature it offered to talk to customer service reps any day of the week online? Well, I'm even more jazzed about Provident Bank's new Web site, too.

It doesn't have 7-day access to a rep online like 1st Mariner's, but it's far more customer friendly than it used to be.

Spanish speaking customers will be able to find more information on the Web site on Provident's products and services. There are financial calculators to help you save for retirement, college, a car, or budget. You can learn how to apply for a loan by phone, in person or online.

Continue reading "Battle of the new local banking Web sites" »

Posted by Dan Thanh Dang at 10:50 AM | Permalink | Comments (0)
Categories: Banks, Computers, Technology
        

1st Mariner Bank debuted its new Web site recently.

We're not choosing this as our Consumer Web Site of the Week just because it's a local bank and we're not picking it just because it's got all those cheezy commercials showing local people saying nice things about the bank. (We sorta like those ads, by the way, for the cheese factor.)

We're picking 1st Mariner's site because it features a live online chat with a customer service rep seven days a week. How cool is that? Instead of waiting for Monday to roll around, you can talk to a live rep over the weekends, too. While 1st Mariner is at the head of this banking trend to make reps available for instant messaging and chats, they've also started reaching out by marketing and connecting to customers through Facebook, too.

Continue reading "Talk to 1st Mariner Bank service reps online, on Sundays, too!" »

Posted by Dan Thanh Dang at 7:00 AM | Permalink | Comments (0)
Categories: Banks, Consumer Web Site of the Week
        

If you have ever gone over the limit on your bank account while, say, using your debit or ATM card, your bank may have automatically covered the transaction but charged you an overdraft fee.

But is it worth it to have the bank cover a purchase that might be much smaller than the $30 or more you will be charged for the overdraft? Keep in mind, if you’re using your card throughout the day, you can be hit with several overdraft fees.

Regulators are now looking at overdraft programs. And consumer groups and the American Bankers Association are at odds about what’s best for people.

Consumers pay at least $17.5 billion a year in overdraft fees, according to the Consumer Federation of America. The group wants consumers to be able to opt-out of banks automatically covering you with overdraft loans and then charging stiff fees.

According to the CFA:

 - The typical highest fee for an overdraft is $34.65, a 15 percent increase from three years ago.

 - Sixty percent of the biggest banks will tack on another fee if you don’t repay the overdraft loan and the fee within a certain time. Some charge $6 to $8 per day until you pay up.

- Less than a third of the largest banks set a limit on how many transactions in a single day can trigger an overdraft fee. For instance, Bank of America customers can find themselves triggering up to seven overdraft transactions in a day and paying a total of $245 in fees.

The American Bankers Association says 80 percent of consumers have not paid an overdraft fee in the past year. That shows most people manage their accounts well, the trade group says.

And of those that paid an overdraft fee, 85 percent said they were glad their bank covered the transaction while only 14 percent wished the bank didn’t, the ABA says.

Put another way, though, that means 20 percent of consumers did pay an overdraft fee. That’s a significant number.

Of course, consumers should be responsible and make sure they have enough money in the bank to cover their purchases. But fees are getting out of hand and consumers should have a say whether or not they want transactions automatically covered or not.

Your thoughts?

Posted by Eileen Ambrose at 11:40 AM | Permalink | Comments (0)
Categories: Banks
        

Hate those overdraft fees and ATM fees? Hate calling your bank only to listen to an automated voice? Hate the hoops you have to jump through to resolve a banking problem?

Join the angry crowd.

The third annual J.D. Power survey on banking, which was released yesterday, found that overall satisfaction in retail banking decreased considerably since last year — down 26 index points on a 1,000-point scale to 737 in 2008.

Contributing to the banking industry's image problem in particular is the growing dissatisfaction with fees. Fees are the most commonly reported problem by customers, as well as the second-most common reason for switching financial institutions, the survey says. Customers are also less than happy with a rise in the number of problems experienced and problems that go unresolved, increases in wait times to see tellers or speak to phone representatives, and declines in the ease of accessing branches all contribute to the drop in satisfaction.

Continue reading "Consumer satisfaction in retail banking drops" »

Posted by Dan Thanh Dang at 6:45 AM | Permalink | Comments (3)
Categories: Banks