Comments on: Marketman’s Credit Card Series 2011, Part II – Credit Limits…

By: Abcd

Abcd — Tue, 21 Jun 2011 16:40:52 +0000

I have 2 credit cards. One from Eastwest and another from Allied Bank. I did experience overlimits with Eastwest but they always call me to settle the excess before my statement date. Now for Allied bank, I have never experienced it. And it seems that Allied bank fraud analysts are very good. I once charged a ticket in Hongkong and the terminal they charged my card to belonged to a gasoline station. The following morning, they called me to inform me that they suspect my card was compromised and had it cancelled and that a new one was on the way. When they mentioned a charge at a gasoline station, I told them that I didn’t buy anything from a gasoline station only to realize later that the airline ticket i bought inside the airport was swiped in a terminal under the name of the gasoline station. I later called to inform them that the transaction was legit. I really felt secure with them cause they do look after your welfare. In fact they are the only credit card in the country where you can insure your CC and ATM in case of theft or unauthorized charges for just PhP 10.00 per month. Also, the dual currency feature is also excellent. You get to pay in dollars what you buy in dollars. Some banks have as high as 5% conversion fee for foreign currency transactions which is another cash cow for them. Imagine if you bought something at 1000 USD. You actually pay them an extra 50 USD for converting it to PHP.

And by the way, Eastwest bank takes 18 months before you get a credit limit increase. For Allied, you only need to request it. My only gripe with Eastwest Bank, poor customer service .

By: Marla

Marla — Wed, 18 May 2011 04:59:42 +0000

I took your advise on the earlier post and lowered my credit limit. Lo and behold, several months later, it was higher that what I requested. Apparently, you have to send the credit card provider notice every 6 months because the “system generated increase” eventually takes over.

By: present tense

present tense — Wed, 18 May 2011 00:38:10 +0000

I have personally complained to the BSP about some CC predatory practices, and the CC shaved off several thousand. The wording used by CC is quite different from a layman’s understanding of the same word. And there is a legal aspect to it I understand. Remember that your call is being monitored or recorded and agreeing to the CC terms will be construed as proof of your acceptance and conformity. Even if such a word has a different meaning altogether to both yourself and the CC.

By: Marketman

Marketman — Tue, 17 May 2011 12:54:07 +0000

Gigi, yes, I am pretty sure your credit card company should be able to lower your limit to WHATEVER you want, after all, it is YOUR account and your RISK. I have heard of companies that claim they have to get approval from superiors, to check with others, and frankly, I find that utterly absurd. To protect yourself, send a letter with the credit limit you want directly to the bank or your account officer if you have one, and have it received. That way, if something bad happens, you have proof that you had only agreed to XXXXX credit limit. That’s what documentation I had with the situation described in the post above, and I suspect that was one of the main reasons the bank credited us with PHP42,000+ after they allowed serious and repeated breaches to the credit limits… If that fails, and you have multiple cards, try telling them you will cancel the card if they can’t lower the limit. If you are a desired client with good payment history, they will be loathe to lose you… Wait till you read what cards I just picked up for our crew (supplementary cards), and what limits they have, and no fees to boot… all the result of recent run-ins with a credit card provider.

By: Gigi

Gigi — Tue, 17 May 2011 10:56:12 +0000

MM, I didn’t know that! Whenever I ask for the lowest possible limit, they give me a 6 digit number. Do all banks allow a cardholder to downgrade to 5 digit amount?

By: eric

eric — Tue, 17 May 2011 06:19:55 +0000

@Gabby, very well said. But very unlikely to happen here in the Philippines and that is why i think MM is offering an “alternative” solution for now – it’s actually a preventive measure of sorts if you think about it.

interestingly, i am actually handling a case now where my aunt’s card was stolen in HK and swiped for 100k php worth of goods (LV bag, etc.) We obtained the charge slips and showed how drastically different the signatures were but the credit card company avoids this fact and simply points out the terms and conditions (reckoning point when not liable which is only AFTER reporting) that you agree to upon getting their card. I have replied telling them that even if they sue my aunt, we will inevitably file/implead the merchants/stores involved since they did not ask for identification and did not bother comparing the signatures (a sample of which is found at the back of every card). So in the end, we told them to go after these negligent stores instead to fast track recovery and payment. No reply yet so we will see.

another related topic, card companies are now issuing virtual cards specfically only for online transactions since online fraud/identity theft is getting rampant . basically these are akin to “extensions” of your principal card but with a much lower limit (like 20%) so if you fancy buying small things on auction sites or buy airline tickets your exposure will be much lower. i think this is more of a tool to protect the companies instead of the consumer since online credit card fraud is much easier to defend – i know this from experience and the credit card company simply writes it off and change your card (to get a new number) in the hopes of preventing future hacking.

By: Marketman

Marketman — Tue, 17 May 2011 01:35:32 +0000

Mart, you are right, identity theft is increasing. But at least for some of those cases, I have seen that some credit companies eventually DO NOT insist on holding clients liable if they still had their cards, the signatures on the slips are forgeries, etc. This is particularly true I think if the abuses occur in one place, say a particular store or gas station or charges on the internet… But you may still be seriously hassled as you try to sort that out and prove it was indeed identity theft…

By: Marketman

Marketman — Tue, 17 May 2011 01:28:03 +0000

Gabby, exactly right. If there were limited liability, then banks would be VERY CAREFUL about increasing credit limits, and reviewing who they issue cards to, and in that case the credit limits are more balanced. The credit limits per se are NOT the problem, it is that the balance of risk has been shifted to the consumer, where it is with the issuer in most developed countries. If the balance of risk were shifted more to the issuer and to the merchants, THEN merchants would be more careful when checking signatures and cards, or asking for identification or checking with credit card companies in very high value transactions AND banks would be restrained in limits. A form (legislated or self-regulated) limited liability is definitely a potential solution.

Most Filipino cards have an annual fee, meant to cover some of the overhead or administrative or other costs associated with having the card. Therefore, it is not UNREASONABLE to expect that the credit card company would carry some of the risk. In this case, much of it lies with the hapless consumer, who in most cases, doesn’t even REALIZE the potential RISK they carry in their wallets…

It is my personal guess and only my opinion, but if limited liability were introduced, it would be harder to obtain a credit card issued locally, and perhaps as many as 500,000-1,000,000 credit card holders (out of 4,000,000+) might not be able to renew their cards due to higher risk profiles for banks, and the rampant credit limit increases clients have been receiving would probably slow dramatically. You would also find salespeople more vigilant about checking credit card signatures or identification cards on instructions from their bosses/business owners who may stand to lose if the transaction is fraudulent.

It is perhaps a positive sign that stores/chains such as Rustan’s now seem SERIOUS about checking identification against credit card purchases, and I LIKE that they do that for both my and their safety. I wish credit card companies would start to think more along those lines rather than pushing almost all risk onto the consumer…

By: GabbyD

GabbyD — Tue, 17 May 2011 00:34:32 +0000

i dont understand the problem.

if the card company is willing to offer you more credit, why is that a problem per se?

if the problem is loss protection, wouldnt the solution be legislated limited liability (as you said at the top), as opposed to credit limits?

By: Mart

Mart — Mon, 16 May 2011 20:58:30 +0000

Actually, you don’t even need to have the card stolen. With credit card readers becoming cheaper and accessible (heck, you could buy a kit off the internet), a cashier that is in on the scam can swipe your card twice; once at the real register and one on a credit card reader.
Or a slight more savvy/sophisticated crook would rig the store’s card reader so they can get a copy of the card info as it is being swiped for the transaction. Then they can make a duplicate card later on which they can use just like the original card. And you’d be none the wiser because you have your card in hand and think you’re safe.

Slightly off-topic, Here in the US, a couple of years ago there were even a few ATM machines that were rigged with form fitting card reader that went on top of the card receptacle in the ATM machine. Then the perps would collect a day’s worth of ATM access at night.

Another avenue is online transactions and compromised computers (i.e. virus/trojan infected).

If you must use a card, make it a debit card and live within your means. If the card is used illegally, at least the money you’ll lose is only what you’ve deposited in the debit card and nothing more.