(MONEY Magazine) – Q. When we got a home-equity line of credit in 2003, my wife had a "stellar" credit score of 804, but mine was only a "good" 699. To qualify for the best rate, I'd need 700 or higher. We were told we could reapply in a year for free, so I paid down my cards and worked on my score. When we went back to the bank, they said it would now cost us $500 to reapply. Can they do this?
WALNUT CREEK, CALIF.
A. Sure they can. But in your case, they won't. When we called Washington Mutual, we found they had added a new $500 "early termination" penalty for home-equity lines of credit (HELOCs). This would affect, for instance, anyone who wanted to cancel a loan and then resubmit an application in hopes of snagging a lower interest rate. Like you. After our call, Washington Mutual chose to waive the fee "in light of the very specific representations" that you said were made to you, and your loan was reprocessed in December.
Back in 2003, you qualified for a HELOC at the prime rate plus 1.74 percentage points. After your diligent credit-score work, you qualified at prime plus 0.74%, a full percentage-point improvement. Give yourself a pat on the back.
Now brace yourself. You could have qualified for an even lower rate in 2003 if you had made your "stellar" wife the primary applicant on the loan. "Listing the person with the higher credit score as the primary borrower," counsels Keith Gumbinger of HSH.com, a mortgage-information website, "may knock as much as two percentage points off the interest rate."
Wow. Why no mention of this during your two applications? Washington Mutual says federal law prohibits creditors from offering advice that could discourage any person from applying for credit for any reason. So if you don't ask, they're not going to tell.
Because you were dissatisfied with your new rate in light of this information, Washington Mutual agreed to waive the cancellation fee yet again. You're now eligible to reapply with your wife as the primary applicant, allowing you to lock in the most favorable rate they offer—prime plus 0%.
Moral of the story? Always lead with your strength, which in this case (as, no doubt, in many others) is your wife.
Q. Our family had a big reunion at a resort hotel in Florida. We spent more than $1,700 for a local photographer (a hotel employee had given us his name) and were told to wait 10 weeks for the photos to arrive. Nothing! He has never returned our calls; now his phone is disconnected. It's been nearly five months. What can we do?
A. Seems other customers have had similar problems with the shutterbug, judging by complaints filed with the local Chamber of Commerce, the Florida Better Business Bureau, a local complaint blog and the Florida attorney general's office. But you do have some recourse because your family paid for the photos by credit card (actually, four different cards) and because most cards offer vendor-fraud protection.
Typically, the card issuer attempts to negotiate a solution with the vendor. "It's best to let us know immediately if there's a problem, even before you pay your bill," says an American Express spokesperson. Since that's not always possible, some issuers may refund the money as a good-will gesture. And there's usually a 60-day window in which you can file a dispute.
It's understandable that you'd accept a recommendation casually given by a hotel employee, but always ask any outside vendor for three recent references. "Also, ask to speak to a customer who didn't have the best experience," suggests Alan Mowdy of the Florida AG's office. "You can tell a lot just from how open someone is." And never pay in full up front. "A 50% deposit is standard for a business like this," says Mowdy. "Anything more is a red flag."
At press time, American Express had credited one account; Bank of America and Capitol One were expected to follow suit. The AG's office was folding all the gripes from the various sources into its main consumer-complaint directory (800HelpFla.com). And the hotel made extra nice by offering your family a $1,700 credit (talk about classy). So make some new memories—and, uh, consider home movies.