Household Credit Services - orchard bank ripoff charges $29.00 overlimit fees even when you do not go over your limit This has happened to me 4 times in the last 4 months Baltimore Maryland

One month I was near the limit and forgot that my Annual Fee would be charged that month too. When I got my statement I was over the limit and that over the limit made me over the limit the second month. I knew the only way out was to pay: the minimum payment + estimated finance charge + over the limit fee in advance to end this trap. I think all cards work like this not just the preditory cards ie: Household, Providian, some Capital One cards etc.

There are some legal restrictions on how late fees may be applied, but none on overlimit fees. So most banks take full advantage. If the balance is over the limit for whatever reason for even one day of the billing cycle, an overlimit fee is triggered. But it is not actually applied until the last day of the cycle.

So in the example above, the balance was over on the first day of the cycle, before the bill even arrived. An over limit fee will ALWAYS be applied on the last day -- NO MATTER HOW MUCH IS PAID! You need to pay enough to cover the fee that you may not realize is coming. That is on purpose to confuse the consumer and collect overlimit fees month after month.

In the example above, the consumer would need to pay at least $50.00 to break the cycle. This is $17 (amount over limit) + $29 (pending overlimit fee) + $4 (next month's finance charge). (Why are they only charging 4.8% APR on a subprime card that's over the limit? In the real world, finance charge would be more like $20.00.)

Pay enough to cover everything pending, and the balance on the next statement would end at $999, and you should be safe from another overlimit fee. If at all possible, pay a few dollars more to have a sure margin.

Asking the bank to forgive the fee may work the first time, but with an operation like Household, they are counting on the fees to make money. Going near or over the limit on any credit card is also quite bad for your credit score, even though you make all payments on time.

If this happens to you again, call them and request a fax number for their credit department and for their corporate office. Send them a letter outlining the problems you have had for the last four months. Include dates and times of telephone calls and long distance charges you have been billed for if applicable. CC the entire thing to your state Attorney General's office and their state Attorney General's office, along with a copy to the FTC and the credit reporting bureaus in case Household decides to try to show you as "late pay" for the months in question.