Direct Merchants Bank

Secured Credit Cards

Direct Merchants Bank •Application Fees •Change of Address Policy •Collection Policies •Customer Service •"Credit Protection" •Interest Rates •Late Fees • Late Posting of Payments •Over-Limit Fees •Preying on the Disabled • "Rate Reward" •Secured Credit Cards •Security Policies •Disappearing Funds •Telemarketers •An Insider's View

Michael of Ft. Lauderdale FL (1/25/03):
I have a secured Mastercard with Direct Merchants Bank, secured with a deposit sent in by me. I have not been at my Florida address for some time, having been staying with my father who is ill. I have been making regular timely payments on my account via the bank's web page. Any correspondence that I have sent them has been ignored, and in the past, their web site has been down, thus preventing me from making a payment on time. I avoid the late-payment fee, due to THEIR computer problems, only after several lenghtly phone calls to them.

Anyway, I attempted to make a purchase about a week ago, and it would not go through, causing me much embarrassment. After spending at least five minutes on hold with them (on an outdoor pay phone on a frigid day in January where I attempted to make the purchase), the representative informed me that the bank had decided to discontinue all of their secured card accounts, and had closed them.

On Sept. 11, 2000, Jon of Miami wrote:
I currently have a secured Platinum Mastercard account. Some time ago (about 4 months ago) found out that anytime I make a payment towards the balance on my account, Direct Merchants waits a full 15 days before fully crediting the amount of my payment towards my available credit. In other words: My credit limit is $500.00. If I've made a $50.00 purchase my credit limit is understandably reduced by the same amount so that my available credit becomes $450.00. However, as per Direct Merchants' policy, if I mail my $50.00 payment and it is received before the due date, they acknowledge the payment, but my available credit remains at $450.00 for a FULL 15 DAYS AFTER THEY HAVE ALREADY RECEIVED MY PAYMENT.

At first I was told that this is because of the fact that it's a 'secured' account and they establish that waiting period to make sure the check clears the bank. Well, that was an outright lie because I recently registered for their 'on-line' service which would enable me to make DIRECT ON-LINE PAYMENTS. This means they money is electronically transferred from my bank account DIRECTLY into their payment center. Naturally, I thought this would eliminate that 15 day waiting period, which I was told was to ensure that all checks cleared.

Well much to my disappointment, I was informed that the waiting period STILL APPLIED! Even though they already have my payment with electronically tranferred funds, they STILL will not release the amount towards my available credit. When I complained about it and asked for a reasonable justification for that policy they were unable to give me any kind of satisfactory, or even semi-intelligent answer. The person with whom I spoke just listened to my complaint then said something to the effect of: "Uh-huh, I see." "Okay, thank you for calling Direct Merchants Bank."

I think this is another form of usery. Their APR finance charge is obscene enough at 21.49% for purchases and 25.49% for cash advances. They add further insult and injury by keeping my money 'on hold' for 15 days. I don't know how they can get away with this. I realize they're probably too smart to do anything patently illegal, but this is really disgusting and abhorrent behavior from a financial institution which professes to 'help' consumers by assisting them in the rebuilding of their credit. The only thing they're doing is TAKING ADVANTAGE of consumers who are in a poor credit situation. It reminds me a lot of the South Florida 'vultures' that were selling bottled water and other badly needed supplies in Miami at super inflated prices to the victims if Hurricane Andrew in 1984.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.