Watch out for credit cards asking you to “opt in” to over-the-limit fees.
Yeah, it’s seems like a no-brainer to say “no” to that one.
When the Credit Card Accountability Responsibility and Disclosure Act takes full effect on Feb. 22, it will protect consumers from some of the industry’s worst abuses.
Penalties for exceeding your credit limit is one of them.
But we’ve heard of at least one bank that’s using a misleading sales pitch to see if it can get customers to accept this punitive fee.
Credit cards can simply decline any purchase that pushes customers over their credit limit.
But they’ve been more than willing to let cardholders overspend by a few hundreds dollars so that they could impose an over-the-limit fee every month until their balance was back in line.
The Credit CARD Act forbids credit cards from automatically allowing you to go over the credit limit and then hitting you with a big fee.
It requires issuers to contact each cardholder and ask them to “opt in” to the privilege of exceeding their credit limit — and paying a fee for doing so.
That involves so much work, and is such an obviously bad deal for cardholders, that American Express and Discover have already decided it isn’t worth the hassle.
They’re just dropping over-the-limit fees.
But it appears some banks are hitting the phones and asking their customers to “opt in” to over-the-limit fees.
Capital One, for example, is trying to get its sell opting-in as a money saver. If you say “yes,” it will drop the over-the-limit fee from $39 to $29.
In the sales pitch described to us by one unhappy cardholder, Capital One doesn’t promise to accept any over-the-limit charges you might make.
We asked Capital One if there would be any advantages for customers who opted-in to the fee. Would they be able to make more over-the-limit charges than customers who opt-out, for example?
The bank never called us back with an answer. We’ll take that to be a “no” until it does.
If you already opted-in, call Capital One back and opt out. The customer service reps will give you grief but you have the right to change your mind.