Don’t Let the Credit Card Companies Spoil Your Next Trip

by brian on May 21, 2009

Here in the United States, the legislative bodies have passed laws preventing credit card companies from suddenly raising interest rates to loan shark levels if you are late with a payment. Credit card companies are suppose to give you 45 days notice before they raise your interest rate.

Here is a list of the rules credit card companies must abide by: What the Credit Card Bill of Rights Means for Consumers

I didn’t see anything about CUTTING credit limits – or canceling cards!

Trying to take care of all my bills before I left on my round the world trip, I decreased my credit debt to $0. Apparently I am now a credit risk to some companies because when I got back I used a Visa card issued by HSBC.

Staying on top of it, I decided to pay it off as soon as I charged the item and called for the mailing address. The automated system said I had $245 of available credit!

Wasn’t my credit limit $3000???

They lowered the limit to $300 from $3000 because of inactivity. Ok fine. But you never warned me and when I called to complain they said they sent a letter. Only the letter I saw was postmarked AFTER I made the complaining call.

What can you do? Not much from what I can see. If you have $0 balances try to use your card for small items and pay it off immediately. Credit card companies feel that if they are not making any money off the interest you owe them, you are a risk.

If you’re taking a trip, you should be proactive and call. Tell them you are traveling and not to lower your credit limit. Not sure if that will make a difference, but it can’t hurt.

Some cards are being canceled outright without any prior warning because of inactivity. How ridiculous is that?

You don’t want to be in a foreign country, think you can use your credit card and then have it denied because you are suddenly over the limit. Especially if the credit card is needed for a emergency situation. Bring two credit cards and hope that their respective credit limits don’t get cut or canceled at the same time!

Anyone else have any suggestions?? Would love to hear them.

{ 11 comments… read them below or add one }

Brook May 22, 2009 at 5:03 PM

Wow, I need to check with my bank before leaving! The last thing I need is my credit lowered or rates hiked or credit ruined because I pay my bills on time.

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brian May 22, 2009 at 8:48 PM

@Brook
Yes please check before you leave. It may or may not help but you can at least be aware.

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M May 23, 2009 at 2:01 AM

We called our bank and credit card companies before leaving the US to tell them we’d be traveling for 8 months because we didn’t want them to feel someone had stolen our card and put a hold on it.

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brian May 23, 2009 at 7:41 AM

@M
That has happened to me too. They suddenly see activity from Thailand or Brazil or Kenya and they think the card has been stolen. That’s all fine and good because with a call your card is released.
When they cut the credit limit, at least in my experience with two different cards, they are NOT putting you back at the original limit.

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Kymbugs May 26, 2009 at 6:21 AM

While we are on the topic of credit cards, I thought I’d mention my experience. I
A week into my round the world trip, my credit cards were stolen in Uganda (East Africa). I’d planned to take advantage of their introductory 0%APR on new purchases for 10 months, and use the cards for all my spending. I phoned up the credit card companies (Morgan Stanley and Barclaycard), explained what had happened and
asked them to send me replacements. They agreed to do this BUT TO MY HOME ADDRESS IN LONDON! I told them I was in UGANDA, and could they not send them to me there. NO THEY COULDN’T! Result was that for my entire trip I used my debit account (I think it’s called check in account in the USA) for the entire trip. Luckily I’d extended my overdraft to £3000 before I left London, so was okay… ish
Moral of this story is
1) Don’t lose your credit cards
2) If you do, then make sure there is someone who can forward important mail(like replacement credit cards)

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brian May 26, 2009 at 6:16 PM

@Kymbugs
Acutally I can understand why they wouldn’t send your new card to Uganda or another foreign country other than the one listed for your mailing address. Too much fraud going on to risk your card going where it shouldn’t.

But you bring up a great point. Folks need a trusted neighbor or relative to take mail and store it or forward it as needed. That would certainly make life easier when you’re away from home.

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M May 26, 2009 at 6:28 PM

I just saw a Credit Card commercial no longer than a week ago for the HSBC Premier Mastercard. The whole commercial stressed the simplicity of replacing the credit card in case your wallet is stolen while you’re traveling. “Emergency cash advance of US $2,000 and next-day card replacement in the event of theft or loss.”

I have no idea if it’s actually that simple or if it’s a good travel card at all, but it was a pretty amusing piece of advertisement. =)

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brian May 27, 2009 at 4:46 PM

@M
Sounds great but the next day replacement probably won’t get to you in a location other than your home address. Credit card companies are just too wary of fraud, and rightfully so.

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M May 27, 2009 at 5:03 PM

@Brian – Actually, the commercial implies that they will deliver it to anywhere you are! The commercial ended in a scene where the credit card and money is being hand-delivered to the couple while they are on a tour of the rain forest. A few seconds later, a monkey steals the just-replaced wallet and the woman calls the HSBC again. Like I said previously, it’s an amusing commercial. =)

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brian May 27, 2009 at 6:25 PM

@M
You are right! I called HSBC (1-888- 662-HSBC) and asked. They said they can send the card to an alternate address. There is an option for travelers. Thanks for bringing it to our attention. I think the credit score and account balances requirements are higher for this ‘Premier’ credit card, so find out what they are if anyone is interested.

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Ben June 6, 2009 at 10:52 AM

Even though it's tempting to have a $0 balance and pay the bill in full every month, it's not the best choice in terms of building credit. Maintaining a somewhat substantial balance and keeping up with the monthly payments shows the credit companies that you have the ability to manage money properly, etc. I'm not saying I necessarily agree with this practice, I'm just relaying their thought process. Also, a lot of this just has to do with the financial crisis. As in your case, they are reducing or eliminating the credit available to customers that aren't profitable (people that don't use their cards) b/c that reduces their potential risk (aggregate credit available to all customers). But, yeah, the consumer gets the short end of the stick as usual.

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