Part of having resiliency in your career is having your financial house in order. The reason is that good personal finances keep desperation away when you are laid off and allows you to make job and career choices because they are right for you, not because you are overwhelmed with bills.
Right now, credit card companies are all upgrading their credit policies. Failure to read the fine print means you can get yourself into a penalty phase on your credit — and that will hit your credit report making it more difficult to get the fabulously expensive credit you get right now.
Just now, I received an update from American Express on their terms. Now, I’ve been an American Express customer since 1978 — yes, 31 years — and I’ve never had a balance nor have I ever been late. Yet, this is my new version of credit from them:
The standard APR for Features is the Prime Rate plus 11.99%…The Penalty APR is the Prime Rate plus 23.99%.
Of course, they calculate “the default penalty rate is 1/365th of the APR rounded to the nearest one ten-thousandth of a percentage point.” (Emphasis added…). Let’s get every penny we can.
But even though I’ve been a long-standing customer, they are modifying the terms of my card so that:
We reserve the right to deny any request for authorization for a Charge, even if your Account is current and not in default.
So I’m not going to reveal my credit score here to the world. Let us just say that most people would seriously trade their score for mine. But this is what passes for credit for consumers in a time where we bail out banks with taxpayer money.
American Express is not alone. This also happened earlier in the year with Bank of America, where I haven’t even charged anything on their card for over a year because of their outrageous interest rates even though I’ve had that card for a very long time. The killer is that closing accounts and opening new ones to take advantage of credit card company offers — and giving us some relief on interest payments — is now viewed as weakening your credit score.
Yup, you can’t switch because it makes your credit score worse. But you can’t charge anything unless you want to pay 12% on top of prime. And hope and pray you don’t miss a payment by accident or you’ll hit 24% plus prime (30% interest anyone??). And that’s assuming the company will even authorize a charge even if you are current and always have been.
Seriously, the mafia never had it so good.
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