Do you have bad credit? If so, you have a bulls-eye on your head. Those with a poor credit history are regularly targeted by unscrupulous credit card companies. I’m talking about the ones that charge consumers excessive fees and rates – and in return – all they get is a lackluster card with a credit limit that’s good for nothing and a customer service department that’s just as useless.
An example of one of these unscrupulous offers is the Salute credit card from Urban Trust Bank. During the latter half of last decade, they mailed out “Visa Gold” applications to targeted customers with bankruptcies and bad credit. To say the fees were excessive would be an understatement…
- Annual Fee: $150
- Account Maintenance Fee: $72 per year (billed monthly at $6 per month)
- Account Opening Fee: $20 (one-time fee)
- Account Maintenance Fee: $228 per year (billed monthly at $19 per month)
Both offers came with excessive interest rates. To add insult to injury, customers regularly complained about the suspiciously slow payment processing, which could lead to being hit with late fees. And from the sounds of it, reaching the U.S. President on his personal phone might have been an easier task than calling Salute’s customer service phone number.
Nearly 4 years ago, the jig ended when they sent customers this letter:
“We must regretfully inform you that we are discontinuing your Salute Visa gold Program. Consequently, we have closed your account to new transactions and may refuse to authorize any new transactions effective immediately.”
That would be the end of it, right? Not quite…
The ghost of the past
During the past 12 months, I have still seen posts from past customers who are being haunted with dubious collections efforts of their Salute credit card, back when they had it in 2008. Purportedly a new owner of the accounts, Jefferson Capital Systems, has been trying to collect on these old accounts.
Now if someone owes actual debt from purchases, I agree that’s a valid obligation of debt. But what’s really sketchy about these Salute cards is that even after they were closed, they purportedly kept incurring the applicable annual fees and monthly maintenance fees. Per the letter that Salute sent out when they closed the accounts:
“If you have a balance, you will continue to receive monthly Salute Visa Gold billing statements and to be assessed an account maintenance fee as set forth in your cardholder agreement.”
So fast forward to 2012 and 2013. Even if someone 0riginally only owed $100, given the excessive fees and interest, that debt might have ballooned to as much as $1,000 or more over this period of time.
Aside from being morally wrong, this continued billing practice also clashed with the FTC’s ruling from 2008 regarding these types of cards (there are now rules about fees relative to the card’s limit). Fortunately, I have heard success stories of consumers using that as ammunition to successfully convince Jefferson Capital to drop their collection efforts.
History doesn’t repeat itself, but it does rhyme
I’m hoping 2013 is the last year I hear about Salute Visa gold card coming back to haunt people. But I must warn you, even though that credit card is out of business, the root problem of milking customers with bad credit is still happening today. Don’t get ripped off, if you have bad credit please choose an affordable card like this one.