Listen: Watch out for credit card companies lowering limits
"I've got a foul up for you on something that has really emerged. It's just a problem going back to this last spring and is intensifying here in the summer and that is where credit card companies are either without notice closing your account or reducing your credit line and it's because the rate of delinquencies with credit cards is zooming right now and the number of charge offs s where people just aren't flat out paying their bills anymore has gotten really bad again with is credit cards so the credit card companies are really freaking on this and they're punishing people who have not caused a problem but they're just worried and trying to dial back their portfolios our our producer Kim got a letter from one of her credit card companies in this case American Express and American Express did not write him to tell her they love her in fact this letter is pretty eighty cold from American Express to you. It shows that bankers exist is bankers only with artificial hearts. It felt that way yeah so they told you your spend activity on your account listed above has been significantly lower than your credit limit in order to align with your spending we have lowered the credit limit on your account and goes on from there very warm and friendly early and Fuzzy American Express Yeah Super Fuzzy considering they are my oldest line of credit and I've been with them for about twenty-three years this very disappointed but you did get one. Please in the letter your nor options if you would like us to review our decision. Please please hey there. It is call us at the number on the back of your car that I thought was particularly Kinda Lane that they couldn't hadn't just type out the number that I had to get out my card and look at the little bit on the back. I'm like really not encouraging me to call you so I'm not specifically picking on American Express even though that was really harsh but this same kinda banker mentality with a complete lack of sense of loyalty to a customer has been loyal the coldness the <hes> I mean why do people hate bank so much because this is the way they behave you know the artificial heart was developed as a way of saving lives of people whose human heart was not functioning but when the banks came up with the idea of having all their employees and planted with artificial hearts they've been thrilled with it and this is a perfect example so American Express warm and fuzzy warm and fuzzy <hes> this could have been from any of the other big issuers because this is going on so no this is y it is very important from a defensive standpoint that you have a minimum to credit cards from two different issuers because at least Kim didn't get the other nasty gram that so many people receiving which is we are closing your account and this is not for somebody. Who's been a problem? I that's just the way it's playing right now and I've talked before and we did something a video and Clark Dot com about why probably in this circumstance having four credit cards from four different issuers may be the right defensive posture with the behavior of the banks right now and that would be a major credit card which is visa mastercard American Express discover never more than one thinking of it as a defensive position from the same issuer like if you have a couple of cards with chase peace and that's it. You're going to have a really bad day. Chase decides you're out all at one time. That's why you WanNa have them for more than one place and I really liked for you at this time to go to a credit a union. You're a member of and get a credit card from them. Credit Unions are because they're owned by their members. Don't just throw people overboard Willy Nilly when things get a little rough out there because they're there to serve serve their members. They're not looking at you as just a data point and a profit center I apologize if I missed this but did you <hes> share the punch line that I was able to call an appeal well. That's why said in the letter you could you could and it wasn't that hard conversation. It was a little obnoxious going through the same story with them over and over but they updated my income stuff which they hadn't done since two thousand and five and reviewed it and then restored. Would it back to the other one so for anybody else at this happens to. I think it's definitely worth the phone call at least and the person you spoke to at American Express. Did they have a real heart or an artificial. They sounded exactly like your imitation of the letter her so strange they really. It was obviously scripted. Yeah everything they said was obviously like reading from a script even after they transferred me to a manager he was reading from a script. It's just you know it's not a warm fuzzy situation but you by advocating for yourself you got it reverse and now your credit isn't going to be harmed by that. Credit Limit Reduction Yep good job P._J.. Is With us on the Clark Howard Show Hi P._J.. How are you hi Clark Great? It's a pleasure to speak with you well. It's great to have you here and you have a suggestion for something that has been a terrible problem for so many parents teenagers and that is that it costs about as much to ensure a teenager as it costs to buy a building yeah you had a recent caller who mentioned they were going through a similar scenario similar to what my life and I just went through with their son turned sixteen and and they contacted their insurance company about putting them on their policy for their vehicles and that caller it was about four thousand dollars a year more in our case. It was wasn't that much but it was quite a bit so in talking to the Insurance Company Company we <hes> we're agent came up with a way to take the sting out. It's actually worked well with something. We were thinking about doing anyway. <hes> what I learned was that the the insurance company will rate. You're young driver on the highest cost vehicle you have and both far vehicles are currently fully insured and therefore that that increase costs however if I were to purchase a vehicle and carry only liability he could be listed as a primary driver on that vehicle in doing so we pay substantially less in fact the difference for us was about nine hundred dollars a year less and given the cost of the vehicle that we were purchasing we would almost have it paid off over the two years that he was in that higher risk so very clever idea. So what were you able to buy so inexpensively we actually bought a nineteen ninety six Ford Ranger pickup and <hes> he you know he would drive it just to work. I did confirm with the insurance company. There's no problem within driving or other vehicles if we wanted him in a safer for vehicle for a longer distance or something he's free to drive those vehicles but so long as he's primarily driving that used vehicle <hes> he's he's able we're able to get into that lower rate. I appreciate your strategy so much catch and there's something you said I wanNA point out. You said that <hes> it was the person at the insurance company who helped you figure out a workable strategy. Is that right that's right. It was our agent. We have a really good relationship with our agent. Will that is great right. You know <hes> fewer and fewer people today have an agent who even though they are the agent or the insurance company historically psychologically. They've really been an advocate for their customers and yours is a perfect example sample of where an agent advocated and saved you a lot of money. That's really wonderful to hear and it will keep the keeping miles awesome are other vehicles. There were a lot of advantages to the whole thing well that is such a good story and differences from state to State Insur to ensure but on love suggestions like yours is ways of trying to reduce the cost of insuring teenage driver and <hes> <hes>. You may have heard what we've done that our teenage daughter is in college in an area where there's a lot of Uber and lift and what she's spending per month on Uber and lift is less less than what the auto insurance was for her to be a driver and now somebody else has to put the wheels on the road and drive her which she loves lots of ways to get around the auto insurance for a teen thing. Dan Is with us on the Clark Howard Show Hi Dan Dan what's going on. I have a six month old. We are planning on putting into into a private school finally when they're three or four and we're seeing if there's any kind of five twenty nine plan <hes> that we can use tax advantage of that to pay for the private school so do each state establishes what they permit as far as money going through into use for private school in usually is considered to be K.. He threw twelve <hes> traditional kindergarten is when states have generally allowed five twenty nine money to be used for a private school that before that you know historically that was called pre k. a nursery school and I'm not aware of there may be a state here or there. That's allowing that but to my knowledge it's kindergarten through twelve and you're allowed to take in the states states that permit it typically up to ten thousand dollars in annual tuition can go towards private school tuition kindergarten through twelfth. That's going to Max out at about ten thousand. In a year anyway so that could that could work out well for you. GotTa you gotTa put in a big chunk to be able to really make it work for you because you need several years of tax free growth and tax free spending thing before the it's really worth it to us the five twenty nine money for private school. Is your child likely to go private school all the way K. through twelfth. Most likely yes sir so what I've recommended in that case is that you use the child's young years to keep piling money into a five twenty nine. Give it several years to grow and then maybe about middle school age is when you start are using it to pay tuition so that you've had enough years where you've had tax free growth in tax free spending because if you turn around when a child is really young you put money on you. Turn right around. Take it out. There's just not enough earnings to make it worth worth doing all that so it is a new tool for people and I think that in the time that it's been legal in many states to use five twenty nine money for a private school before college I could probably count on one hand the number of calls I've had about it so most parents are still thinking of five twenty nine is principally for college. Ari Is with us on the Clark Howard Show Hi. How are you today great? How are you good? You have a question about something that the answers have gotten so much better in the last couple of years hit me with it great well this goes along along with the spend less idea because I have looked around and I did a little internet searching and I found I wanted to well. Let me start with where I'm trying to accomplish. Daughter is going to be spending a year in a different country and we have to pay for the program that she's going to be going to. It's a gap year so she'll be finishing high school which is graduating in a in a month and before college. He's GONNA spend a year studying in a different country and the school wants it and their currency currency and so I looked at a few different companies one of them on your website but then as I'm doing some Internet searching I found a website that did a comparison engine which I'm not sure is legit so that's part of my question and then Kinda different company that look less expensive so of course I wanNA spend less but you're so worried about scams and if you transfer money and you wire money I feel like there's no way to ever get that back. If it's a mistake absolutely we now I am so glad that there are these alternatives because not that many years ago the only choice we had if we needed to send money overseas was to do it through a bank and banks in the United States have used this as away to just eat people's wallets up and they're not competitive at all in the marketplace when the banks had a monopoly. It was just ridiculous how much they ripped us off but now that option. It's the why isn't it crazy how much the banks teach you and is a cheat. It's not even charge you but the big players in it or oh F._X.. And Transfer Wise. I don't know if you've looked at either of them. I didn't look at the facts I looked at transfer wise and that's the company that I found is seems to be less expensive but the big mystery is how do you know whether you're dealing with a legitimate company even if they have a website and say they've been established Bush since nineteen seventy nine or whatever they're saying who are they go ahead and ask me currency transfer dot com. I'm not familiar with them and I found them on finder dot com which was a website that compared urge currency transfer websites. How much cheaper are they then <hes> the two that are the best known transfer wise no F._X.? I would say that it was about and percent cheaper ten percent really yeah so you mean ten percent less of the fee not that that's ten percent to send money okay right right if I if I was sending you know a thousand dollars I had they were nine hundred versus a thousand from the other companies right okay. If it's much cheaper you're going to be making multiple tuition payments do a test with them and see what you can find with reviews put in the name currency transfer and then put in the word rip off as a search see if there are people have gripes with them if everybody's happy with them and it works with a small transfer. Give it a try. Maybe you've found another other that is cheaper than the two that are most established. If it is a problem then you know who you should"