Diane Lowe's story will
make you think twice about ignoring a balance on a credit card, even for only a
While shopping at the Hudson's
Bay Co., she decided to get a company credit card in order to get 10 per cent
off her purchases.
Though she paid off the
balance and cancelled the card last June, she started receiving monthly bills
for 3 cents on her closed account.
Lowe admits she did
nothing, thinking the small debt would be written off. This was a big mistake.
Large companies often
report an outstanding balance to the credit bureaus (Equifax and TransUnion),
which can downgrade your credit score and make it hard for you to qualify for a
In Lowe's case, she bought
a new house in November and tried to move her portable mortgage at 2.2 per cent
interest. But the bank turned her down.
"Now I'm paying 4.15
per cent interest with a secondary lender," she said.
"I have had multiple
mortgages for 20 years and I have been a landlord for 10 years. I have always
been in good standing credit wise."
That wasn't all. She
couldn't get a line of credit from the bank for a deposit on her new home and
had to refinance her existing house to pay the builder.
Capital One Canada, which
handles the HBC credit card business, apologized to Lowe after I forwarded her
emails. It also sent letters to the credit bureau and the bank that had refused
her credit applications.
Spokeswoman Laurel Ostfield
said credit card issuers had to report to the credit bureaus when payments
weren't made by customers.
"It is important to
review your statements every month to ensure you are not carrying an
outstanding balance, because even small amounts can still negatively affect
your credit score," Ostfield said.
"We encourage any
customer who is unsure about an amount owing to contact us right away, so we
can work with them to keep their account in good standing."
Lowe did call the Bay once
she found out her credit score had been slashed. She asked for forgiveness of
the balance — now grown to six cents — but nothing happened.
"I said, 'You guys are
spending 67 cents to mail me an invoice for six cents. No wonder the Bay is
going bankrupt.' I think I upset someone that day.
"Now I'm going to be
paying thousands more in interest. Two separate houses are affected by my