GOLDILOCKS AND THE THREE BANKS
This is the story of Goldilocks and the three banks, whose names were Citi, Chase, and Of America. The bank named “Chase” had to change its name from “Washington Mutual”, or “WAMU”, about two years ago, due so some mismanagement issues.
Recently one evening, Goldilocks was sitting around half-listening to The Rachel Maddow Show, when she was reminded that none of these three specified banks had produced any corporate taxes this last year, and that they had all turned a mighty profit---one that was record-breakingly lucrative since the taxpayers throughout the land had given them enough of a little boost to keep them from failing entirely. She was trying not to feel victimized, but a nagging knot in her stomach kept reminding her of the spiraling monetary vortex into which she had descended.
Here is how it happened:
On 10/12/08, Goldilocks received a letter from Of America informing her that due to a late payment, her credit limit had been lowered from $7,000 to $3,500. This action lowered her credit score and put her debt to the bank over the new limit, causing more fees. She called the next day to explain the late payment to an Of America representative, who was very understanding, encouraging and helpful. Goldy explained that the bill got buried, was neglected for a month, and that a double payment was on the way. The representative researched it while Goldilocks was on hold. When she finally returned, she said that the actual reason (not stated in the letter) was that there was a problem with payments on a part of a HELOC (home equity line of credit) that Goldy and her husband had signed jointly, which had been taken out with Washington Mutual (aka Chase). She asked her to clear this up with WAMU, and that after that, they (WAMU) would get with the credit reporting companies to restore the rating. This is where it gets complicated, but the problem was caused by WAMU, as I will explain:
First, let me mention that the payments for the HELOC were taken out of a joint checking account from WAMU, though Goldy had a separate account from another local bank, and Hubby used the joint account. Hubby wasn’t the best at keeping track of his checking account balance, but he did receive a VA disability check every month for $2,700.00, and out of that, any monthly payments he was responsible for were automatically taken out before the 12th of each month. This was how they’d always set it up, and this included the house payment, the HELOC, and a truck payment. They did this so that no matter what, these payments would always be made.
On Mar. 19 of that year, he received a notice about a payment to WAMU that went into collections. This was without any prior warning from the Bank. It was for a total of about $600. Hubby was never able to explain what it was to Goldilocks’ satisfaction, but it was paid off. Goldy was angry because she thought it would affect her credit rating, and so she went to WAMU with him, where they closed their joint account and opened a new account just for him. At the same time they were informed that there was over $2000 available for a loan on the top of their HELOC. They were looking for funds to keep going on his project of building a shop, so he signed for that, and in their understanding, the payments were to be taken out of his new checking account.
Well, they weren’t . They were being drawn on from their closed account. When Goldy went to check on it, it was explained to her that the $2,000 loan was being treated like a revolving credit card, so the minimum that was due was the interest on it. So every once in a while, Hubby would get a notice that there was $40, $20, or $60 owing, and, because he was uncomfortable dealing with banks, Goldy would rush in and make the payment. She didn’t even know what she was paying for until she finally decided to get pro-active and get some counseling from a WAMU Associate, Misty. Misty looked over the letter from Of America, and since the letter indicated that the lowering of her credit rating was due to a late payment, Misty had a hard time understanding that really, it was due to the problem with the WAMU HELOC. At that time, they reset the automatic payment. Goldy then asked about Misty’s bank’s responsibility to restore her credit score. Misty wrote down some information and sent it to her supervisor; however, to Goldy’s perplexity, she didn’t sound too hopeful. She said she’d do what she could, and told Goldy to expect a letter from their credit department. About a week later, the letter arrived---a survey!! In the meantime, Goldy received a letter from Of America’s Customer Credit Department stating that, as she’d requested, they had reviewed their decision to reduce her credit line. Well, she had requested a review, but she was still in the process of hashing it out with WAMU, so it was too early to be considered at that point.
Finally, Goldilocks received a letter from WAMU dated 10-2, stating that after careful revue, her FICO score could not be restored. This was because the proportion of balances to credit limits was too high (partially due to the lowered limit). Also the time since her most recent account opening was too short, a number of accounts were in delinquency (which they were, since each affected the other). There was also another black mark based on the length of time revolving accounts had been established, which, since the loan was just established, would have only been a few days.
On 10/6, she received a phone call from Carrie at WAMU, asking her to bring in a voided check from her husband’s account so they could SET UP THE AUTOMATIC PAYMENT!!! “What???” thought Goldy. She garnered her civility and went in on 10/9, hoping that the third time was the charm.
From then on, her interest payments went up anywhere from 19% to 29%. At the same time, her own self-employment was dwindling, due, she surmised, to a failing economy.
Now, every month, Goldilocks was receiving maybe 15 credit card offers a month. She was in denial at this point, just trying to drum up the payments on the cards she already had. She had accumulated about $15,000 in debt, and was faithfully listening to Dave Ramsey in the afternoons every chance she could, hoping that his wisdom would impart to her. She did pay off her smallest card, the one with a $500 limit. That felt great, and kept her in denial about her monthly routine for about another year. Then she heard Arianna Huffington suggest that we should all be boycotting the Big Banks, and we could do so by talking to the credit departments of our local banks. “That makes sense”, though Goldy. She composed a letter explaining the situation top to bottom, and handed it to Eva, a very helpful gal in the right department to turn around her life, she thought. Eva read the letter and replied: “Wow!” She went right to work, trying to secure a loan at about 12%, which sounded good to Goldy. But when Goldy went in the next day, it turned out that her earnings ratio was too low for the debt she’d incurred. Goldy went home sad, but not mad. She knew that Eva would have helped if she could have.
Another year went by, and offers were forthcoming. Godilocks gave it some thought, but every time she considered it, her stomach would tighten up, so she just kept paying the money, which also made her stomach tighten. It was hard to tell which source of the stomach-tightening was worse.
Finally, an offer came from Citi, and though she’d heard terrible foul things about the big corporation, she bit the bullet and read through the paperwork. 0% interest for over a year. That would save a bunch. $300 transfer fee. Well, that would be ok, she guessed. 24% interest if a payment is missed. She promised on her mother’s grave that she’d never in a million years ever miss another payment. She figured out that presently her interest payments were amounting to almost $250 a month, and decided that she would take a new direction in pro-activity, and make the call. Pretty soon. Well, actually, it needed to be thought about some more.
Then, the final finally arrived. It was in the form of an “All Things Considered” report on NPR. This was the trusted source that put Goldy over the top and got her to contact Citi. They were interviewing a girl who avoided all interest charges by signing for the 0% cards whenever she needed to. She’d pay the transfer fee, but at the end of the story they summed it up as if she hadn’t paid anything. In her head, Goldy’s addendum to the story was “Yeah, but there’s a fee, so don’t forget about it.”
She called a couple of days later. There were three cards to transfer. After the information was taken for the second card, the Citi associate tried to sell her a few other things; insurance and the like, but Goldy stalwartly replied “no” to all inquiries. They tried to send her the free trial periods, and she clearly reiterated, “no, please don’t send me anything that I have to cancel”. She tried to remind the associate that there was another card to transfer, but the associate had selling on her mind. She forgot entirely about the third card. She then tried to wrap up the conversation, and Goldy interjected, “What about my third card?” It was too late, the associate explained, blaming Goldy for withholding the information. “You’ll have to wait until you get your card, and then you can continue with the transferring. There was that knot again, but Goldy was too worn out to pursue an argument, and replied, “Thank you, I’ll do that.”
The day came when her card arrived. Goldilocks took a breath and tried to quell her disgust for partnering with one of the Big 3 corporations. “Maybe they’ve learned their lesson”, she thought. She had to admit that it made her feel relieved----empowered, even. She was down to two credit cards, one with 0% for a year, and the other one, the one that was only 19%, was cut more than half. The evil 29.99% cards were history! So, “Hurray!!” she uttered. “Maybe I’m out of the belly of the Beast”.
Two days later she got the bill for the remaining card from Chase, and on it, there was another $300 transfer fee.
