AmTrust Canceling my HELOC. Goodbye, safety net!

A few months ago I wrote a post about AmTrust Bank trying to bribe me to close my Home Equity Line of  Credit (HELOC).  They only offered $50, and I passed.

But I worried that they’d cancel the HELOC anyway, and I was right to worry.

Yesterday I got a call from Mary at AmTrust, telling me that they would indeed be canceling the HELOC.  She again offered me the $50, as I “may as well take the money since you’re going to lose it anyway, ” because AmTrust is “getting out of the HELOC business.”    I was unhappy to hear this news, and told her I’d call her back.

I discussed it with Husband, and  even he really doesn’t see why I’m unhappy about losing the line of credit.  It’s not that we need the money.  My balance is zero, and has been since about 6 months after I opened it (I took it out to pay off my car loan so I could deduct the interest, then paid it off quickly anyway).

And we have a healthy savings.  Very healthy.  And a few other investments that could easily be turned back into cash with little lag time in the event of an emergency.  And we pay $25 a year for the privilege of not using it.

But I like knowing it’s there. I like it an awful lot.  It’s a $10,000 safety net.  Just in case.

So, instead of just being a proverbial  sheep, I  called Mary back today and asked for documentation that they had a right to do this.  After all, it was my understanding that this was a 15 year mortgage, which would give me 7 more years.  I want to see, in writing, the situations in which they are able to pull the plug.

I also want to know what happens if I take the money, and perhaps put it into another investment which would give greater returns than the interest I pay.  Would they call the loan?  Would they let me keep it until it’s paid off?

I must be the only person who has balked at all, because Mary was surprised by my request.  She then told me that if I’d like,  the bank next store would be happy to take my application for a new HELOC.

Not the  point, Mary.  I already have a HELOC.  And I’d like to keep it, thankyouverymuch.  I certainly don’t want to apply for any new credit, and I don’t want to pay any additional fees.

Mary didn’t know the answers, but promised to get them for me.

But, honestly, chances are slim to none that I’ll get to keep it.  So I’ll likely take the $50 buyoff.

And I’ll try to look on the bright side.

I’ll be saving $175 in yearly fees.  Add that to the $5o buyoff  and that’s a very real $225 more in my pocket.  So, if I do have an emergency, lets pray it’s an easily doable $225 hummingbird variety and not a $10,000 poop-my-pants Bigfoot.

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AmTrust says, “We love you! Really! But will you please cancel your HELOC? We’ll give you fifty dolla!”

I just got a really weird phone call.  But first a little background…

AmTrust Bank is one of the banks with which we do business.  It’s the bank where I purchased my mortgage, and a week later took out a $10,000 Home Equity Line of Credit to pay off my car loan.   The HELOC is actually a second mortgage of sorts.  I don’t recall right now if it was a ten or fifteen year agreement, but I do recall that they gave me a $100 Home Depot gift card for opening it, and they charge me a $25 fee to keep it, with no penalty if I close it as long as I keep it open for at least three years.

I took out the HELOC so I could deduct the interest, and made the car payment to my HELOC instead of a bank until I paid it off six  months later.  I’ve not used it since, but that $10,000 is available if I need it.

I may not use that credit line, but I like knowing it’s there if I need it.  Despite having a five-figure emergency fund, one never knows when one will have a really big emergency, does one?  That’s why we decided it was worth $2 a month to keep it open.

Since the most recent financial crisis began I’ve been reading and hearing stories about some of the things banks are doing to reduce their exposure to debt – good and bad.  Credit card interest rates are being hiked while credit limits are being slashed.  HELOCs are being canceled and/or closed, whether people are carrying a balance or not.

I’d hear things like that and wonder if any of the companies with which I do business would take these actions.  I’ve not really worried about it since we pay our balances off every month, and we don’t need the credit to survive.  We have excellent credit, so I understand that if a company makes one of these decisions that affects me that it isn’t about me at all – it’s about them.  I have my financial house in order – they’re scurrying to do the same.

So today I get a phone call from said bank, asking me if I’d yet received the letter about my HELOC.  No, I had not.  But already I’m thinking that they’re closing it, and calling to lessen the blow.  I’m already composing my reply in my head when what she is staying starts filtering through.  I heard a few phrases – “we’ll pay you $50” and “if you want to” and “no penalty” and “just stop by to fill out the paperwork“.

Whoa.  “Let me get this  straight,” I say.  “AmTrust is willing to pay me $50 if I close my HELOC?”

“Yes, and there’s no penalty.”   Well, there’d be no penalty anyway, chica.  But I held my tongue.

“But I don’t have to if  I don’t wanna?”

“No.  You may keep it open if you wish.”

Uh huh.

I end the conversation and hang up, thinking that AmTrust really, really, really wants to close the HELOCs but really, really, really doesn’t want to piss off their customers.

Huh.

Well, I’d like to keep my HELOC.  But I have to figure out AmTrust’s next move.  What will they do if not enough people voluntarily surrender their  HELOCs?  Are cancellations next?

Am I better off taking the $50 now, or waiting, hopeing they don’t cancel it?  Waiting and getting nothing.

I’m feeling the love!

4/9/09 9:52 pm Edited to add:

I just ran across this article which describes a classs action lawsuit against AmTrust accusing them of illegally suspending these types of accounts.  No wonder they are looking for a kinder, gentler way of getting rid of that risk!

Credit Card Reward Gives Surprise Bonus!

I have had a Capital One Visa card for many years, and it’s one of the ones that mostly sits idle in my drawer.  I used it recently just to keep the card current, as it will hurt my credit score if they decide to close the card.

Today I read that Capital One is raising the interest rate on thousands of their customers, so I signed into my online account to see what my interest rate is.  For me it doesn’t really matter, as I always pay off my cards every month, but if I ever did need to carry a balance I want to make sure I do it smartly…

I couldn’t  find my interest rate, but I did notice a rewards section, and clicked on it just for giggles.  I do have rewards on my other credit cards, and I’m always very aware of how close I am to redeeming points – usually for cash.  After navigating the Capital One Rewards section for a few moments I saw that I had enough points (just over 20,000) to redeem then for a $100 gift certificate from one of numerous retail outlets, use it for travel, shopping, make a donation to charity, get a statement credit or have them send a check.

$100 buckeroos!

They must have offered a 20,000 bonus for signing up for the card, so this money has likely just been sitting there for years.  I’m kicking myself for not taking advantage of it before, but I’m thrilled that I’ll be getting a check for $100 of “found money” in just a few weeks.

Check your rewards programs, folks.

Didn’t Get Your Economic Stimulus Payment? Maybe the IRS Has the Wrong Address!

The Internal Revenue Service owes nearly $4 million to South Florida residents alone, courtesy of unclaimed tax refunds and economic stimulus checks.  I don’t know what the nationwide number is, but it’s got to be huge.

I cannot for the life of me understand why someone who hasn’t gotten their payment yet isn’t jumping up and down screaming, and trying to find the reason.    For many of those people it’s a pretty stupid reason, too.

Bad mailing addresses.

Come on, people!  We’re talking hundreds, and in some cases thousands of dollars!  If you’ve moved in the past few years MAKE SURE THE IRS KNOWS YOUR ADDRESS!

Excuse me.  Stupidity makes me insane.

And if you’re one of these people, you have Just four days remain to correct an address with the IRS so that the agency can reissue the checks.  Taxpayers expecting an economic stimulus check must have their addresses updated with the IRS by Friday so that the checks can be reissued by Dec. 31. Taxpayers expecting regular refunds have more time to claim their refund but must contact the IRS to update their addresses.

There are ways for taxpayers to update mailing information:

1. Via the IRS Web site: www.irs.gov. Taxpayers without Internet access should call 1-800-234-2942.

2.  Visit your local IRS office.

3.  Check with the United Way in your area to see if they offer taxpayer assistance.

Please, go get your money folks!

Edited to add some helful links:

My Economic Stimulus Check Didn’t Arrive When Promised!

My Economic Stimulus Check Didn’t Include Money for My Kids!

Your Economic Stimulus Check Didn’t Include Money For Your Kids? You’re Getting Another Check!

Didn’t get the amount you were supposed to get for your kids? You may be getting another check! Click here for info!

When will your economic stimulus payment arrive?

Frequently Asked Questions: Received the Stimulus Payment?

Economic Stimulus Calculator – Or How Much to Expect

Financial Instability Aftershocks Affect Your Credit, Too

In the wake of the ridiculous goings on in the financial world you could see some aftershocks right there on your credit card statement.

Credit card companies are tightening their belts, and reining us in, too.  Doesn’t matter how long you’ve been with them, how good your credit is, how many payments you’ve made on time.  According to the Wall Street Journal they are starting to reduce credit limits across the board.

If you’re like me you’ve seen a credit limit of $3,000 balloon to a limit of $25,000.  I’ve never paid much attention, as my strategy of paying of my balance each month has meant that I don’t pay a whole lot of attention to my limits and interest rates.

Many people are seeing their credit limits slashed with little notice, and those like me who are not diligent about checking those parts of their statement may find themselves dangerously close to their credit limit, and dangerously close to those over-the-limit fees.   When’s the last time you looked at your credit limits?  That would be a very, very nasty surprise, wouldn’t it?

Not only that, because your buying power is reduced your debt to income ratio goes up.   According to CNN “The debt-to-limit ratio is calculated by dividing what consumers spend each month by their credit limit, and it’s a key component of credit scores. If your limit drops to $1,000 from $2,000 and you continue spending $500 a month, your debt-to-limit ratio immediately jumps from a favorable 25% to an unfavorable 50%.” That means it’s harder to buy that car or that house, making your life less comfortable and making it harder for our economy as a whole to recover.

This just keeps getting better and better, doesn’t it?

What can you do?  The Wall Street Journal article had some great suggestions:

1.  Reduce your outstanding debt. Bigger balances make consumers prime targets for credit-card companies looking to reduce credit lines, since the banks worry that you may not be able to pay your tab.

2. Watch the mail. When credit-card issuers lower credit limits, they must notify you. Typically, that will be done by mail (unless you’ve agreed to online-only notification). You should also review your monthly statement for changes, including a lower credit limit, interest-rate spikes and new penalties.

3 Check your report. Credit-card issuers review consumers’ credit reports for red flags, like late payments to other credit cards, a sudden buildup of debt or high credit-utilization rates. Check your credit report for free online at AnnualCreditReport.com. If it includes any errors, report them to the three major credit bureaus, Equifax, Experian and TransUnion.

4 Get online alerts. Ask your credit-card issuers if they offer online alerts that notify cardholders when they’re nearing their limit.

5 Shop around. If your credit limit gets slashed, don’t cancel your credit card. That will decrease your credit score. Instead, shop around for more attractive credit-card offers.

I’m going to add a few of my own:

6.  Check your account online at least twice a week. This  way you can have the latest updates, keep track of your balances and limits and catch errors early.

7.  Curb spending. Stay home, don’t shop.  Just buy what you absolutely need to so you have less to pay back.

8.  Pray. Whether you believe in a Higher Being, the power of positive thinking or your faith is in humanity, put your positive energy out there and pray.

Free (If you don’t count that your privacy was already violated) Credit Reporting for up to Nine Months…

Transunion Credit Reporting Agency was very naughty.  If you held a credit card between January 1, 1987 to May 28, 2008 they sold our information to businesses without our permission.  As a result people filed lawsuits, which were combined into a class action, and a settlement has now been worked out.

Since we weren’t the ones who filed the lawsuit, or lawyers for either side, we are not going to get a brazilian dollars.  Dadgummit.

We can, however, get free credit monitoring for up to 9 months, depending on the option we choose, beginning after the case and appeals is settled.

You can choose one of these options:

1.  Free credit report monitoring for six months, plus cash if there’s any money left over in settlement fund and you still get to sue them if you want;

2.  All the benefits of option one but you can’t sue them any further, or

3.  Nine months of credit monitoring, access to some free credit scores, and free use of TransUnion’s mortgage simulator service – but no cash payment.

Today is the last day to register to take part, so head here to register or call 1-866-416-3470.

Costco American Express Card Holders Can Get More Rebate Cash Back!

We got a lovely little piece of mail the other day that’s going to put money in my pocket, and money in yours if you took my advice and signed up for the TrueEarnings card from Costco and American Express.

Enroll in the program and spend $1,000 on non-Costco purchases and you will get an additional 1% cash back on every eligible purchase (up to $200 extra!) between September 1 and October 31st!

That means I’ll be getting 4% cash back on gas, 3% on travel and 2% for every other non-Costco purchase.

And you know what else? I don’t have to wait for my rebate check to receive the extra cash back. It comes as a statement credit to my account 6-8 weeks after the promotion ends.

You have to be invited to participate. If you’re worried that you may have mistakenly tossed your invitation go to http://www.americanexpress.com/costco1000 and you can enter your login and password to see if you’re invited.

There’s lots of fine print, so check that out, of course.

It’s a great deal for me. I hope you can take advantage, too!

Deal of the Day July 17, 2008

In today’s world it pays to know your FICO score.  You can order your credit reports free from annualcreditreport.com, but they don’t give you your actual score.

At MyFico.com, you can find out what your score is and actions you can take to make it higher. A higher score can mean lower interest rates on home and auto loans. Use coupon code SUMMER20 when checking out at MyFico.com to save 20%. Expires 07/31/2008.

Check back tomorrow for another great deal!

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The IRS Increases Business, Moving and Medical Expense Mileage Rates

I may faint.

The IRS actually saw a need to provide some tax relief and it didn’t take an act of Congress to implement it.

Starting July 1st, the IRS is increasing the the allowable business deductible for business vehicles from 50.5 to 58.5 cents per mile.  The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The IRS is also going to raise the rate for calculating computing deductible medical or moving expenses from 19 cents to 27 cents a mile, also starting July 1st. The rate for charity services, requiring an act of law to change it, remains at 14 cents per mile.  Hey, nobody’s perfect.

Mileage Rate Changes

Purpose	Rates 1/1 through 6/30/08	Rates 7/1 through 12/31/08
Business	50.5	58.5
Medical/Moving	19	27
Charitable	14	14

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

For more information read the IRS press realease.

As always, please remember that I am not an expert on finance, or an accountant. I’m just an accountant’s daughter. So, please, please, please contact your accountant for expert advice.

Your Economic Stimulus Check Didn’t Include Money For Your Kids? You’re Getting Another Check!

The IRS has updated it’s FAQ’s to provide information for those whose Economic Stimulus Check didn’t include money for their kids, or sent the incorrect amount.  This is right from the IRS website:

Q. I received my stimulus payment and it didn’t include money for my kids. Does the IRS plan to send me an additional check?

A: Yes. The Internal Revenue Service will mail out approximately 350,000 additional economic stimulus payments starting in early July after discovering that some tax returns were improperly filed and did not capture the information needed to generate the $300 in qualifying child payments.

In some instances, taxpayers did not check the proper box to trigger the $300 child payment. In other instances, a few tax software products primarily used by tax professionals did not capture the proper information needed for issuing the child stimulus payment.

To fix the problem, the IRS is taking extra steps to identify the affected taxpayers and send them separate checks to cover their qualifying children. The IRS emphasized that the corrected checks will be mailed automatically, and taxpayers don’t need to call or take any additional steps.

The vast majority of tax returns with child payments were completed accurately by taxpayers, tax professionals and software providers. The IRS estimates that more than 99 percent of nearly 36 million returns eligible for child stimulus payments were filled out accurately by taxpayers, meaning that less than 1 percent will need the additional check mail-outs.

The additional payments involving qualifying children will be made starting in early July. These payments will be made by paper check, even if people received their regular tax refund or initial stimulus payment by direct deposit.

Taxpayers in this situation received — or will receive in the next few weeks — stimulus payments falling $300 short per eligible child.

The additional checks will be mailed as the regular weekly round of stimulus payments wrap up in early July. The regular stimulus payment timetable will not be affected by these additional checks.

The issue with the child payments involves the Child Tax Credit checkbox on line 6c, column (4) on Form 1040 and Form 1040A.

For the stimulus payments, IRS systems look for information in the checkbox area to generate the $300 qualifying child stimulus payment. In instances involving paper returns, taxpayers did not check this box when completing their return. In some instances, tax software may not have checked this box, meaning the $300 payment was not triggered.

The IRS has worked closely with the two affected software vendors on this. The IRS appreciates the willingness of these firms to help identify the problem. They have reported to the IRS that their software has been corrected.

The majority of the tax software issues involve commercial versions used by tax professionals and tax preparers. Included are Petz Enterprises’ professional and on-line software as well as ProSystems fx Tax software and on-line CompleteTax software from CCH.

Taxpayers with questions about whether they are affected can contact their tax preparer or software provider.

For taxpayers who haven’t filed a tax return yet, the IRS urges them to update their tax software before filing to ensure proper handling of their economic stimulus payment. Paper filers should make sure to review the eligibility requirements for qualifying children and check the box on line 6c, column (4) if appropriate.

I understand that kinks have to be worked out, and mistakes happen.  But mistakes cost money, both to the government (and, ultimately, you and me) as they correct them, and to the taxpayers who took the word of their government and counted on the money being there when their government said they would.

This is why I don’t count my chickens before they’re hatched.