Should I "Opt-In" or "Opt-Out"?

iVillage Member
Registered: 03-17-2003
Should I "Opt-In" or "Opt-Out"?
Wed, 12-23-2009 - 10:46am

Many of us are receiving phone calls or notices from our credit card companies about over limit fees and "opt-in".

What's going on? A lot of new protections for us who have credit cards!

Remember earlier this year the banks were in a downward spiral with the rest of the economy and in response to the financial crisis, Congress enacted several pieces of legislation, including laws to clip the wings of lenders for many of their outrageous charges and rate jacking practices. Rate jacking, lowering credit limits to below the amount you currently owe then hitting you with over limit fees and new interest charges on those fees? All sorts of nasty tricks were pulled by our credit card companies. The 2009 piece of legislation was entitled the "Credit Card Holder’s Bill of Rights", Credit Card Accountability, Responsibility and Disclosure Act (referred to as the CARD Act). This was to help the consumer (you and me). Among other provisions the CARD Act eliminates the flat over limit fee credit card companies charge.

Right now credit card company will slap you with a flat over limit fee for each transaction that puts you over your limit. This fee can be $25 to $39 or more: whatever the credit card company wants to charge.

How this expensive penalty works. Let’s say you make a purchase that puts you over your credit limit by $10. That little $10 will cost you $49: $39 for the over limit fee plus that little $10 charge.

The good news is this comes to a screeching halt in February 2010. Because of the CARD Act, this nasty over limit fee will disappear at the end of February 2010. Unless, of course, you agree to "opt-in"!

A ha! That’s what these "opt-in" phone calls are about.

The phone call I received from one credit card company made it sound like they would decline the purchase that put me even $1 over my limit unless I decided to "opt-in". I was led to believe I would need to "opt-in" should an emergency arise and I must temporarily go over my credit card limit. But if I want to have the ability to go over my limit and "opt-in" an over limit charge would be approved but, of course, would have that over limit fee charge. "No change to your account provisions Ma'am." So what’s the harm?

Trouble is they can still decline a charge to go over your limit whether or not you agree to "opt-in". They always could. In reality the standard practice is to allow a card holder to go over their limit by 10% of their account. So if I have a credit card with a $5,000 limit I will be allowed to go over my limit by $500. That’s what is ordinarily allowed. So deciding to opt-in doesn’t guarantee that you will be allowed to go over your limit. It only gives them the right to sock you with the old over limit fee.

The hope, obviously, is your credit card company will persuade you and me to agree to "opt-in". I am not going to "opt-in".

I hope you think twice before agreeing to "opt-in".

Has anyone been contacted by their credit card company about this "opt-in" feature?


iVillage Member
Registered: 06-15-2004
Tue, 12-29-2009 - 4:36pm

I've have to make an Opt-In/Opt-Out decision by 1/31/2010 on my AT&T Universal Card (Citibank). I received a letter stating that they were increasing my interest rate from 13.24% to 29.9%, the letter states that rate increase will allow Citibank to “continue to provide our customers with access to credit.” From what I read on-line this is just Citi's way of gouging customers before the new legislation takes affect in Feb 2010.

I'm in the re-building process in regards to my credit and still carry about a 4k balance on this card, I'm concerned that if I opt out it will negatively affect my credit. I've had the card for 17 years!

I'm out-raged that my interest is doubling...not sure what to do!

iVillage Member
Registered: 12-30-2009
Wed, 12-30-2009 - 3:43am
I am getting opt out letters that if I do not opt out and close my accounts I will get a huge finance charge increase. Capitol on is one of them. I am over $$40,00 in debt and I just lost my job. Most of my cards are closed except 2. I use my citicard with points for cash and I pay it every month so I do not have to pay the finance charge on my new purchase. I have a deal for 14% on the old balance and 24% on new purchases. They had me at 29%. Every opt out is different. Even people with good credit are getting interest increases. In February they can no longer give you an over the limit finance penalty until you do it twice. I found if you have problems with the cards some times you have to call 6 times to get satisfaction.
iVillage Member
Registered: 03-17-2003
Mon, 01-04-2010 - 2:41pm