I sit at my desk completely frustrated with Advanta. I opened up a business credit card with them 3 years ago and made a purchase of $6500 to help build my business credit for Rapid Recovery Solution, my Collection Agency. I have paid more then the minimum every month, on time. November 2008 I noticed that my interest rate seemed a little high. No where on my statement did it say the actual interest rate so I called the company. After 10 min or so I get a live rep on the line and they tell me it is 36.1%. Are they kidding, this must be a mistake. I have over a 750 score and never missed a payment. They said they sent me a notice in Aug that they are doing this due to a change in there lending methods. It turns out this is the second time this year they did this. I went from 8.99% in Jan 08 to 18.99 in Feb 08 to 36.1% in Aug 08.

Now, being in the industry for over 10 years I know that I need to watch my credit. I look for charges I didn’t make and it is tough to scam me. I have seen it all but this takes the cake. They told me I am now at a high risk for default so that is why they raised my interest rate? That doesn’t make any sense. They should lower my rate if they think I will default on my credit card. How will an increase in what you are charging me keep me from defaulting. Luckily, I have the ability to pay off this card today but I want everyone to realize that these companies have you by the short-n-curly’s. Watch your statements and lookout for this scam.

FYI, In NY, the maximum interest rate is 30%. They are charging me more then the maximum allowed in my state. I will send a letter to the BBB, the NY Attorney General, the UT Attorney General and the Department of Consumer Affairs.

As a nation we are in deep trouble. If a credit card company can just raise my rate because they feel like it I am positive that 99% of their customers are also paying 36.1%. How many other credit card companies are doing this to innocent people? We need to fight back. I am going to tell as many people as I can.

Unfortunately, there is nothing we can do except payoff the card. I was told I am a high credit risk. I paid the bill in full after I realized the rate was so high and the next month I received another bill for more finance charges for about $255. I paid that bill in full. I just received another bill in the mail for $5.65 and my rate was changed to 37.99%. Another point higher.

Just for cookies and giggles I called again to see why the rate went up again and they said “Sir, you have been classified as a very high credit risk and as a company we can’t risk you not paying your bill with us.” I said “I just paid my bill in full with your company, I have never had a late payment with your company in three years, I have one mortgage on my house for $290K, 25 years left at a fixed rate of 5.375% and it is worth over $500k and almost zero credit card debt personally. I am in the fastest growing industry right now, CNBC expects the debt collection industry to grow at 25% a year for the next decade. What else would I have to do to receive a better rate?” The extremely rude lady said “Sir, you would need to send a letter to Santa Clause and maybe he can help you out.”

The Government should put a maximum rate in place for the next year or so on all credit card debt. If the credit card companies are truly worried about consumers defaulting on their obligations, wouldn’t it make more sense to lower the rate so we can continue to make the payments? By raising the rate, it only makes it harder to pay and more likely that a consumer will default. The credit card companies are preying on the weak right now hoping you don’t pay so they can pound you with the highest interest rate. When you do default, they now have a higher balance to sell to a collection agency. In my eyes, this is a crime.

The Government doesn’t care either. Instead of giving the banks 350 billion dollars, They could have sent $1151.98 to each US citizen to pay towards credit card debt. The banks still get the money but we the people get a little break on our bill. The average family of four would receive $4607.92 to pay off a credit card. They reason that the banks need the money so they can lend money again to us? Are they crazy? All the banks did was raise the interest rates on our cards and pocket the money without ever having to say what the money went towards. No accountability!

Now the geniuses in Washington are considering giving billions to the auto industry so they can produce more shit cars that we can’t afford. How about giving the money to everybody with a current auto loan so we can pay for the car we already have. The money would still flow to the banks and auto makers via we the people.

Good luck America, your gonna need a miracle.

I feel better now. I was very upset prior to writing this blog. I hope everybody reading this realizes that if it can happen to me it can happen to anybody.

John Monderine Rapid Recovery Solution, Inc.

John Monderine is the President of Rapid Recovery Solution, Inc. a Debt Collection Agency. If you need help getting your Accounts Receivable collected visit his Collection Agency website for a no obligation free quote. This article, Advanta Credit Card Scam is available for free reprint.

In my set of stories on mutual funds, I wrote three articles outlining the basics. I told you that a mutual fund is set up like a corporation or trust and pools money from many different investors and invests it into different types of securities. I also let you know that mutual funds have a fund manager that buys and sells the fund’s investments.

Like other companies, mutual funds come with their expenses. One expense is the management fee for the fund. Remember that fund manager that makes all of the important decisions regarding which investments to make for a mutual fund? This covers her paycheck. Administrative fees will typically be included in this fee as well. In addition to management fees are non-management expenses which most funds have to pay.

These include transfer agent expenses (this is the person you have to pay when you want to buy or sell shares of a fund), custodian expense (this is when the bank charges the fund for keeping its money in it), registration expense (when a fund files registration statements with the SEC it gets charged.) Other expenses include legal/audit expense, printing and postage expense (from when shareholder reports are printed and delivered), the board of directors/trustees expense (they enjoy getting paid also) and fund accounting expense.

Another expense that won’t be listed on the fund’s income statement and can’t be controlled by the investor is brokerage commissions. These are typically charged when securities are bought and again when they are sold and they will be reported usually four months after the fund’s fiscal year end. To prevent corruption, the advisers of the mutual fund companies need to make sure that the commissions charged to the fund will not be excessive and they must also try to find the best possible price when they buy or sell securities.

If you are looking to cut back on the cost of management expenses, one interesting concept worth considering is funds of funds. These are mutual funds that invest in other mutual funds. Usually a fund of funds will charge a much lower management fee than that of a fund directly investing in securities because it is less demanding to simply invest in mutual funds rather than individual securities. Most funds of funds invest in mutual funds that are managed by the same adviser, but some do not, and some may invest in both. If you are looking to trim down your management costs, try to look for funds of funds that invest in funds managed by the same adviser because the research that goes with finding different funds with different managers entails more money. To determine if investing in a mutual fund is worth your while, check out my next article “Is Investing in a Mutual Fund Worth Your While? Part One

Mallory Megan works for Rapid Recovery Solution and writes articles about credit collection agencies. Unique version for reprint here: Expenses Associated With Mutual Funds.

In article one in my series on mutual funds, I very briefly went over the essentials. I spoke about securities, which in layman’s terms is something that represents money. I wrote about two kinds of securities, stocks and bonds. I laid down the basics about stock markets and bonds markets, and noted that if you wanted to invest in or sell stocks and bonds you are going to need the help of a dealer or broker.

In article two, I got to the basics of mutual funds, which are set up like corporations or trusts. I let you know that mutual funds pool money from a number of different investors and invest it in different types of securities. I also mentioned that mutual funds have a fund manager that buys and sells the fund’s investments.

Mutual funds can invest in all kinds of securities, the most common being ones are bonds, stocks, other mutual fund shares, and things called derivatives (included in these are forwards, futures, options, and swaps.) A derivative is a security whose value is based on the underlying value of the stock it is based on. Take an option for example.

One type of option might be the right to buy additional stock from a company at a set price. If the value of the stock is high, and you have this option to buy stock for a very low price, you can see that this option is lucrative, and that it might not be so lucrative if the same stock plummets in value, a value even lower than you have the right to buy it for.

Certain types of funds are known as specialty or sector funds. These funds will go out and invest only in certain things. One fund may invest mostly in the shares of a certain industry, like technology or financial services. Some mutual funds may invest in mostly American securities, mostly foreign securities, or both. Most mutual funds are continuously monitored by someone called a portfolio manager and their assistants. These people will invest the funds’ assets according to its investment objective, trade securities in order to make the most money, and check on the ongoing performance of the current investments.

Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies. Check here for free reprint licence: Mutual Funds For Beginners Part Three.