New credit card penalties are outrageous

New credit card penalties are outrageous Until a few weeks ago, I was a happy (for the most part) TD Bank customer. That changed when I opened my TD Visa statement to learn that the bank is increasing penalties (21 per cent to 24.99 per cent and 27.99 p

Until a few weeks ago, I was a happy (for the most part) TD Bank customer.

That changed when I opened my TD Visa statement to learn that the bank is increasing penalties (21 per cent to 24.99 per cent and 27.99 per cent) and penalty durations (two months to 12 months) for missed minimum payments on credit card accounts.

The letter helpfully explains that for a balance of $2,500, this change will only cost $8.43/month. But that $8.43 is not the monthly penalty, it’s the increase. And it’s not for two months – it’s for 12 months. So the cardholder actually pays an increase of $101.16 for missing one payment, to say nothing of cardholders carrying far more debt than just $2,500.

This change is unlikely to affect me as I’ve rarely missed a payment entirely (though it has happened). Also, being allergic to bank fees, I chose the TD Emerald Visa with an interest rate of 12.9 per cent. I get no points, no cash-back, nothing but the ability to keep my finances simple. But this change applies to me too.

If I missed a payment on a balance of $2,500, my penalty would go from roughly $34 on the old system (21 per cent for two months) to over $260 (24.99 per cent for 12 months)! That’s more than seven times the original figure. And if I were to miss a payment again, the twelve month count would start all over!

I am angry on behalf of the many TD Visa cardholders who cannot afford what is a cash grab for stockholders on the backs of struggling families and other hard-working Canadians. There is no forgiveness, no understanding in this policy.

The TD Bank has posted quarterly profits in 2014 of $1.75 to $2.1 billion. That’s billion with a B! Comments in stockholder reports include “record earnings,” “outstanding,” “especially strong,” and “solid performance.”

Overall 2014 earnings of $7.88 billion (up 19 per cent over 2013) “surprised even its own executives,” according to a Dec. 4 article by the Globe and Mail.

So tell me, given these figures, where is the need to increase penalties and penalty durations?

Reading through the letter, I acted on the request to contact the bank before cancelling my TD Visa. The first representative explained that she couldn’t do anything about bank policy. I asked what other options may be available? She offered a low-interest Emerald Visa. I already have an Emerald Visa!

Then I spoke to her manager who agreed with my reaction, but again, couldn’t do anything about it other than recommend I speak to my local branch manager (who also can’t do anything about it) or to email TD’s customer feedback service.

So I did. They replied, and suggested I see their brochure about “problem resolution.” It directs me to follow the steps I’ve already taken.

Wouldn’t it be nice to hear about a bank lowering fees for a change?

Wendy Avison


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