by Joe Shea
American Report Correspondent
January 31, 2006
DISCOVER THIS: THE MAIL IS SLOW AND INTEREST IS 26% AND RISING
BRADENTON, Fla. -- I was almost beginning to believe in the people at Discover Card. Even though I had been four days late with one payment and then was 11 days late when my brother died and my life turned momentarily upside down, they forgave my late payment of $35 and didn't boost my interest rate.
But when I mailed a $175 check on Jan. 19 for the January payment due on Jan. 24, their kindness came to an end. A new bill came demanding $402, along with a $39 over limit and $35 overpayment fee, and a new rate - 26.24 percent, up from 15 percent the month before.
It was pointless to argue with the "understanding" young man at the other end of the Discover 800 number. He said he "was right there with you," having to pay 24 percent himself on a competing Visa card. But as long as I make an additional $300 in payments over the next six months and all are in time, my rate will go back to 15 percent, he promised.
I wasted a lot of breath, because he was in fact a pretty nice guy. He was kind enough to once again forgive the $74 in late and over limit fees, but I would have to pay the $227 minimum payment plus another $35 that I was over limit - whether because of the self-same over limit fee or what, I don't know - to avoid being over limit this time. 8798.44
You see, if I have an $8,800 balance, as I did, and my previous balance was $8,749, and you spent $12.58 at Wal-Mart and $36.86 (a total of $49.44) at Winn-Dixie to put some food on the table, as I did, I was not still within my credit limit even if it seems as though (at $8798.44) was $1.56 under it. When the finance charges are applied, you go over limit, and that costs $35.
Discover Card consider its own charges as your charges, you see, so the credit limit is really well under what they say it is. Banks aren't allowed to charge overdraft fees when their own fees put an account in the red, but Discover, Chase, Citicard, Capital One and the rest do it all the time.
If you are that close to the credit limit and you make the minimum payment due on time, as I believe I did - more about that in a moment - you still become a violator of their internal policies and they get to rob you blind. It seems to me that if you use no more than your credit limit, they should charge you only what the payment on that limit would be, or they should tell you, "You can't use your available credit without going over limit when we get around to charging the finance fees." Instead, at 26.24 interests per month, they let you figure that out for yourself.
If kids can't even do long division, and many can't these days - read about the tragedy of high school-age boys at www.th-record.com, and of all our kids when it comes to math in the Los Angeles Times series now at www.latimes.com - who does Discover think is going to pay their bills a few years from now? I can only pay them by selling off the depressed stock I have counted on for "retirement" money - I'll never retire, but my wife may - and that can only go on for so long.
I tried to point out the folly of Discover's ways to the young man who answered the phone, but he insisted it was just me. It wasn't because Discover saw an opportunity to collect a minimum of $300 from tens of thousands of their customers by the simple artifice of declaring they received their mail a day late. Oh, no, he said: "I got it on the 26th and I processed it on the same day," he said repeatedly, as though he had done it all himself.
But I mailed the Discover bill and my payment on Jan. 19 at the central mail processing center for all our area post offices at about 8 p.m., and their pickup was at 8:30 p.m. All the other bills I sent with that one arrived on time. Discover's bill, going to Delaware, had the same extensive coding and special box identification that all such mail has these days, and machines run it through at lightning speed.
Moreover, the processing center sits in a vast warehouse facility at the edge of Sarasota-Bradenton International Airport, and the mail that is received by 8:30 flies out of there the same night. It gets to Delaware the next day. It is processed over the following day; huge bins devoted to Discover's mails are filled with checks from people like me two days after they are mailed.
Discover got the mail on time, I believe, but like a lot of other companies - Enron, Tyco, Arthur Andersen and all the rest - maybe they saw an opportunity for profit in handling some checks differently than others. Maybe there's a little bit of code there that tells the processing machines this is a check from a guy who has been late twice, so it needs to be seen by a supervisor - at his leisure, please. Or some such dodge to prevent it from arriving on time.
Discover is probably not required to keep the envelopes the money comes in, which would show the date of postmark. That is a law that I think ought to be passed to prevent just such skullduggery, whether it's happened here or not. Mail posted before the due date should be accepted without over limit fees, and was formerly the universal practice. Get your Congressman on it, please.
I asked the nice young man how much longer he thought millions of Americans struggling with mountains of debt and unable any longer to declare bankruptcy without making things worse would continue making these payments of 26.24 percent, a rate that is greedy and usurious and used to be against the law in virtually every American state until credit card companies threatened to quit lending money (and then where would they be, pray tell?) in those states.
Yeah, Discover is off my Christmas list. I will do my best to keep making the payments, but the loan is uncollateralized. If I can't make them any longer, they'll have to eat the difference between what I could have paid had they been honest and fair and what they greedily wanted me to pay; well, actually, they'll have to pay the difference and everything else.
They must be hoping and praying every night that the politicians who write credit card laws will stay safely in their pockets. God knows it's tough to make an honest buck, as they will Discover soon enough.
This is the fourth in a series of articles about credit card debt by Joe Shea, the Editor-in-Chief of The American Reporter.