Post of the Day
May 8, 1998

From our
Credit Cards Board


Today's Post of the Day is really three posts, all from our Credit Cards folder. Sometimes one thing just naturally leads to another, in life, and in finances. The first post deals with kids in debt, while the next two illustrate a company that seems eager to exploit them.

Subject: Re: Oprah & Citibank
Author: SmartConsumer

It's still up to the individual to take personal responsibility; just because you're offered all those credit cards (some of these kids admitted to having 10+) doesn't mean you have to take them.  

I watched the Oprah show too and it broke my heart as well. Here were kids way over their heads in debt and some of them weren't even willing to admit they had a problem. One young woman in particular (I think her name was Keke) was $50,000 in debt (at 24% interest rate!) and thought as long as she was making the minimum payments and maintaining an "A1 credit rating" (her words) she didn't have a problem.

Another young woman said that she saw her parent's income statements on her financial aid forms and thought she should be able to live with the same standard of living even though she was a college student with little or no income! At least one woman was willing to admit that they were into instant gratification and didn't even think about what the consequences were. These kids were buying their friends dinner and themselves new cars all with credit that they had little or no income to pay off. Whatever happened to living on macaroni and cheese and taking the bus when you're in school? I worked myself through college and didn't have my first car until I was 23 and had two college degrees. This may be extreme to some, but someone with no income should not be buying a brand new, $18,000 car either (as one kid on the show said she did). Let's hope these kids don't behave in the rest of their personal lives with the same lack of responsiblity or being in major debt could become the least of their problems!

There also seemed to me to be too much blame placed on the credit card companies and the universities for providing these kids with too much credit. The credit card companies are just marketing their product like anyone else; they are not responsible for maintaining our personal financial health (though I agree some of their practices are reprehensible as evidenced here on this board). I don't think it's any different then any of the other temptations we face in college (excessive consumption of alcohol comes to mind). It's still up to the individual to take personal responsibility; just because you're offered all those credit cards (some of these kids admitted to having 10+) doesn't mean you have to take them. However, I do feel that more education needs to take place. These kids seemed to have no idea how bad their behavior concerning credit was. Someone (and we could argue all day with whether this should be the parents or the schools) needs to teach these kids how to handle their finances (including credit) BEFORE they are on their own in college.

I do agree that they could have had someone on the show that could have provided better advice to these kids and the viewers in general, but if Oprah's show convinces people to admit they have a problem and to seek help then I'd be happy with it's outcome.


Subject: AVANTA *ALERT*
Author: Violetta
I spoke with yet another customer service representative who had no idea of what I was talking about. Finally, I got a supervisor on the phone, who told me he was going to take the first rep to task for not having entered the appropriate notes on my account.  

In an effort to pay my way out of debt as soon as possible, I transfered a large credit card debt to Avanta Platinum Card, at 6.9% for six (6) months, no transfer fees. When I received my first statement, the interest rate said....21.39%!!! Shocked, I phoned and waited, a very long time, until I reached a customer service representative. Told him what had happend and he explained, well the first month there isn't any room on the statement to show 6.9% but, your next statement will show the 6.9%. These words always frighten me, DON'T WORRY! True there wasn't any interest accrued. However, the March statement did show accrued interest. This is when I heard the echo of... DON'T WORRY... 21.39%! I spoke with yet another customer service representative who had no idea of what I was talking about. Finally, I got a supervisor on the phone, who told me he was going to take the first rep to task for not having entered the appropriate notes on my account. I asked if he would send me a letter stating that I had a 6.9% rate for 6 months and he told me he could not do so. BUT, NOT TO WORRY, ON MY NEXT STATEMENT, APRIL WILL SHOW THE PROPER INTEREST RATE OF 6.9% WITH A CREDIT!!

IF YOU HAVE AVANTA CARD WITH A SPECIAL RATE OF 6.9...
WORRY!!!!


Subject: Re: AVANTA *ALERT*
Author: spewbug���
  What Advanta National Bank does to people is unethical and, in my opinion, close to illegal.
This is my first day on the Motley Fool website, so I may be responding too late to help you, but I had to try...

I work for Advanta Bank Corp in our small business MasterCard division. I am disgusted but not surprised at the problems you've experienced. Advanta sold its consumer card division (the one you and the rest of the world has had problems with) to Fleet Bank last fall. The name has not changed, nor has the service (it was horrible when it was Colonial Bank in its pre-Advanta days, it's horrible as Advanta, and it will probably be horrible when it's Fleet Bank).

Although the consumer card division was completely separate from our division, and in fact was across the country (they're in PA and we're in UT), I still had plenty of interaction with it, unfortunately. The good side of that is I know a few good people there who should be able to help you, if your interest rate problem hasn't already been resolved.

What Advanta National Bank does to people is unethical and, in my opinion, close to illegal. Your situation certainly seems to have bordered on the illegal. They are in a serious financial predicament stemming primarily from huge write-offs caused by extending credit to people who were poor risks, and also by having too much of their portfolio tied up in teaser rates. They got nailed for it, and now they seem to want to slap every kind of hidden fee possible on people who actually make payments. By the way, since they're a publicly held company, I'm not divulging anything here that can't be found in their financial statements.

Although I despise having been associated with the Advanta consumer card (who's consuming who, by the way? They seem to be consuming the consumers), I would like to help if at all possible. Please let me know if you have any more problems with them, and I will do everything I can to get them resolved.

On behalf of credit card issues everywhere, please accept my apologies for the treatment you received. When used properly and when all involved parties are treated fairly, credit cards can be a good thing for consumers, issuers, and merchants, but they should not be used as a means for attempted financial rape.


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