Insulting me was not wise.

[Demetz]

When I got back from visiting my parents for Thanksgiving I received a letter in the mail from my credit card company, which happens to be Chase Bank. Within this letter was a notice of change in terms to my account. There I learned that apparently Chase and I have very different ideas of what a fixed rate means. The card I signed up for was to have a fixed APR of 6.99%, now they were revoking this and replacing it with a variable rate which was already bumped up three points higher.

 

I realize and understand that a card with a 9.99% APR is still lower than the lowest rate around, but if that rate is not fixed, it means nothing to me and I will not trust the bank to leave it there. Furthermore, when I read along to the part which was supposed to explain why, it stated that it was to increase profit. That was all. I had not ever missed a payment, or even been late. I wasn't anywhere near the balance limit - in fact I had previously ran up a balance $700 higher and paid it off. I was furious and insulted by what amounts to a bait and switch... "here's a "fixed" low interest rate... okay now that you've bought stuff with the card we're taking that away to make more profit."

 

This is an abuse of their position of power as a large banking institution and it is a case of midirection in advertising. I would not stand for it, so I sat down instead. I tried calling their customer service line and what they told me was that it had nothing to do with me, it was out of my hands and due to the poor economy. I might have believed that a year ago when the banks were begging for taxpayer bailouts, but not now. When I told him I still felt this was ridiculous he told me I had the ability to "opt out" of the change in terms, in which case my account would be closed. I told him he needed to pass it up the line that instead of making profit their company was going to end up losing customers. I also told the customer service rep I would take a couple days to consider my options. Well, I've considered them. 9.99% is lower than the lowest rates being offered even for "good" cards so I've decided to pay off the card, but keep the account open. I may not make a lot of money, and its not very comfortable for me to pay off the card, but I did it anyway. I'm also cancelling the idprotection and credit report services I was paying for each month and was previously willing to pay for because of the low interest rate. They may be the big bad powerful bank but I'm not the helpless consumer they think I am. I was choosing to keep that balance due to my preference for having more available cash. Now the balance is scheduled to be paid off tomorrow morning and their ability to make profit off my account will be gone with it.

 

Righteously indignant as I am about all this, I wrote this letter to their customer service department:

 

I recently received a letter from your institution informing me that the fixed interest rate which I signed up for when I got this card was being revoked and a variable rate would soon replace it at three percentage points higher than was my fixed rate. Perhaps we have different ideas of what a fixed rate means?

 

I have no doubt your company has covered all of its bases to ensure what its doing is legal, but perhaps your company should re-evaluate whether what its doing is wise. I had never missed a payment, my balance was not approaching the limit... yet my rates were being raised and the stated reason in the letter was for the simple desire to increase the company's profit.

 

Let's talk about profit for a moment. I had a little under $1500 balance on the card. I have now scheduled this to be paid off. That $1500 was already paid out by Chase to those places where I used the card so my paying off the balance does not result in an increase in profit. However, now that I'm paying off that balance, company will be collecting a few percentage points more... of nothing, and no finance charges. What's more, I will shortly be cancelling the id protection and credit report services which I was previously willing to pay for because of the low rate on the card. If there was ever a pure profit service that was it. If it was your company's intention to increase profit by raising my rates, then suffice it to say this insulting change in the terms of my account has backfired and had the opposite result.

 

I am not, however, angry enough to close the account. Until now I have been very happy with the services provided by Chase Bank and had even considered switching to Chase from Bank of America for my checking account. The situation can be rectified; I'm not an ureasonable person. Should your company choose to return my account to the original terms and honor that agreement, I will be happy to start using your card again. Until that time I expect my account will remain open in name only, with no balance, and no profit for your company.

 

Your profit-source no more,

Ashton Rooks

 

In post script I would also like to say that I hope you are swamped with letters much like this one and that your company will soon see the error of punnishing those who have faithfully paid their bills.

[Tiger]

Ash, that's terrible. Credit card companies are always looking for ways to screw people over. They're will do whatever they can to make more money. They only care about the bottom line. Perhaps you should just tell them to shove it up their ass and cancel the card.

[KJames]

Ash, that's terrible. Credit card companies are always looking for ways to screw people over. They're will do whatever they can to make more money. They only care about the bottom line. Perhaps you should just tell them to shove it up their ass and cancel the card.

Actually, Tiger, he's wiser doing it this way...they have to keep the account open unless he either requests that it be closed, or he defaults on it, and then close it for breach of contract and non-payment.

 

This way it costs them money to maintain it on the rolls, and he still has a (relatively) cheap card to use in emergencies. He can still avoid high finance charges by logging into their site and using it to pay off his card whenever he actually makes a charge, since he'll be able to see it right away, and they post a payment the day that it was generated on their site, not the day it actually clears his bank. So, for example, he goes to dinner with me (I wish) and has no cash, he charges the $80 dinner to his ChaseVISA, goes home and logs in, goes to chase.com and logs in to his account, selects his account and sees the $80 charge. He goes to make a payment, and chooses the $80 payment, they generate an e-check to his bank account, wherever that may be, and when it clears, the payment is posted the same day he created it (if he generates it before midnight ET) or the day after the charge hits, resulting in almost no finance charge.

[thatboyChase]

I'll talk to my people Demetz.

[Demetz]

Tiger, in this case their bottom line will be eaten away at. Previously they were collecting money from me for indentity theft protection and credit score checking services, which were pure profit for them. Now they won't get that, so that will be drop in their profit. Additionally, like James said, my account is going to become a permanent loss to them, even if a very small one, because it will still technically be open and it costs to keep records for it even if there's no activity on the account.

 

 

Its not much and I know they're just going to brush me off... in fact i already got a reply telling me if i don't like it then they don't need me as a customer. I don't care... they can brush me off like an ant if they want to... I still get to bite them first, even if its just a barely noticeable sting to them.

 

 

[hombre]

Demetz - I am not totally sure what the details were , but there was a news story about this kind of thing a few weeks ago and Obama trying to put a stop to it and calling it illegal, I would check into it further if I were you.

 

[glomph]

Your original agreement no doubt had a clause that they could change the terms any time they wish with adequate notice, which they gave you. It is deceptive (because it was not a fixed rate, in the sense of never changing), and it may not be good business--they're counting on most people not to read the notice, but it as almost surely legal. It sounds like you took the best course of action. They were making a killing off of the ancillary fees, and these services were unlikely to be worth the cost to you.

 

I once got a notice of change of terms for a Master Card account that I'd had for almost 30 years. Not much changed except that they added a right to impose a $10 fee for canceling the card. I called customer service immediately and said that I wanted to cancel the card while I could do so for free. The representative said that they never really would charge that fee, so I kept the card. I got the impression that I was nowhere near the first call of its kind they had dealt with.

[MikeL]

my account is going to become a permanent loss to them, even if a very small one, because it will still technically be open and it costs to keep records for it even if there's no activity on the account.

Ash, I think your letter to Chase Bank was exceptionally well done. It will probably make no difference to them. They are experts on a little phenomenon called "customer inertia". They calculated months ago how many (how few) customers would be sufficiently irate at the change in finance charge terms to cancel or discontinue using their Chase credit cards. That was part of the calculation of how much their profits would increase when they raised the rates.

 

We all love you, Ash, but to a banking giant like Chase or Bank of America, you are a nobody. You may want to consider seeking a smaller bank that actually wants to provide good service at a fair price to its customers. Shop around. Check out Bankrate.com. Simmons First National Bank offers a Visa Platinum card at a 7.25% APR and no annual fee; excellent credit required.

 

My best advice is to kick the credit card habit altogether. Pay cash, write checks, use a debit card...no hassles, no debt. Getting out of debt is a monumental challenge for many people, but it is worth the effort. Remember this little rule of thumb: For every purchase you make with a credit card, if you pay only the minimum payment each month, you roughly double the cost of everything you buy. That's right, that 9.99% or whatever your rate is computes to 100% in the long run if you carry over a balance on your credit card every month.

 

One more thing. The idea of costing Chase money for keeping your credit card account open with no activity may actually be to Chase's benefit. Be sure to read all the fine print to see if they have a right to assess an "inactivity fee".

 

Good luck!

[NaperVic]

so I've decided to pay off the card, but keep the account open. I may not make a lot of money, and its not very comfortable for me to pay off the card, but I did it anyway.

 

As long as you don't have to pay an annual fee, keeping the card was a good idea for multiple reasons:

 

- Available Credit from credit cards is an important component of your credit score. As a youngster, building a good credit history will help you in the long run get better rates for many future purchases (houses, cars, etc).

 

- Having the available credit for emergencies

 

- Needing a credit card for Car Rentals, purchasing airline tickets, reserving hotel rooms...

 

 

Not carrying balances on your credit cards is a very worthly goal. It wasn't until I finally paid off my balances at 28 years old was I finally able to really save money and start getting ahead. I haven't carried a credit card balance since then.

 

Good luck on keeping the balances off!

[Demetz]

Your original agreement no doubt had a clause that they could change the terms any time they wish with adequate notice, which they gave you.

 

Yeah, like I said, I'm sure they covered their legal asses... and I'm sure that their analysts decided that the profit they would make from increased rates from people who couldn't afford to immediately pay off their balance combined with the cash infusion they would get from angry customers who could, would be just the thing the company needs and that they don't really care whether I personally remain a customer. Still, writing them an angry letter made me feel better

 

Something else that will make me feel better... every time I've paid off a credit card I would start getting these balance transfer checks in the mail with a letter begging me to use the card again. Now instead of throwing them away I can mail them back with a note offering to use the card if they will honor the original terms of a fixed rate.

 

Also, I would have closed the card if it only had a balance of a thousand on it... but this card has the highest balance limit of all my cards so closing it would actually hurt my credit score.

[Tarin]

Also, I would have closed the card if it only had a balance of a thousand on it... but this card has the highest balance limit of all my cards so closing it would actually hurt my credit score.

I just wanted to say bravo for knowing that. Canceling any line of credit, even with a balance due of zero, damages your credit score. Also, paying off loans early

[Demetz]

Update:

 

I did some card shopping. It seems fixed rates are pretty much a thing of the past... there was one card I could have gotten through my credit union with a fixed rate that would match my current variable rate with chase but it had a minimum balance limit of 5000... which I doubt I would be approved for given all my other open lines of credit. What I did find though was that Bank of America was offering a card with a variable rate matching what Chase was offering me and even better... every purchase helps to support the Rainbow Endowment which in turn supports a lot of GLBT organizations. It also comes with one of those nifty 0% intro APRs for a year. Since I already had a credit account with bank of america that I wasn't using, they closed that account to open this one, with a balance limit $200 higher so for the next year I'm set better off than I was anyway.

[W_L]

I hope you can find a good Credit card company with the lowest rates available.

 

My discover has a 11.99% variable rate, while my chase has 13.24%, so I wouldn't characterize myself as any better.

 

My Credit history is pretty clean except for some student loans, which were accrued last year during my Master's program. There's a large amount of issues with the Credit Card industry. We need financial reform.

[Benji]

Ash, I think your letter to Chase Bank was exceptionally well done. It will probably make no difference to them. They are experts on a little phenomenon called "customer inertia". They calculated months ago how many (how few) customers would be sufficiently irate at the change in finance charge terms to cancel or discontinue using their Chase credit cards. That was part of the calculation of how much their profits would increase when they raised the rates.

 

We all love you, Ash, but to a banking giant like Chase or Bank of America, you are a nobody. You may want to consider seeking a smaller bank that actually wants to provide good service at a fair price to its customers. Shop around. Check out Bankrate.com. Simmons First National Bank offers a Visa Platinum card at a 7.25% APR and no annual fee; excellent credit required.

 

My best advice is to kick the credit card habit altogether. Pay cash, write checks, use a debit card...no hassles, no debt. Getting out of debt is a monumental challenge for many people, but it is worth the effort. Remember this little rule of thumb: For every purchase you make with a credit card, if you pay only the minimum payment each month, you roughly double the cost of everything you buy. That's right, that 9.99% or whatever your rate is computes to 100% in the long run if you carry over a balance on your credit card every month.

 

One more thing. The idea of costing Chase money for keeping your credit card account open with no activity may actually be to Chase's benefit. Be sure to read all the fine print to see if they have a right to assess an "inactivity fee".

 

Good luck!

 

 

.........How much do you want to bet those rich people with $1,000,000 credit line didn't get that type of response!

[KiwiShadow]

This is why I try and avoid credit cards - but a fixed rate should be a fixed rate. If you signed a contract specifying a fixed rate, you could always threaten legal action. Sometimes the threat is enough.

[Demetz]

There's always a clause stating that the bank has the right to change the terms from whatever they are to whatever they want them to be with the provision that the customer may "opt out" of the new terms... in which case the account is closed and the customer may continue paying the minimum payments or more as they please until the account is paid in full. They gave advanced notice of what they intend to do and emphasized the opportunity for me to opt out of the change in terms. The high credit limit is the only reason I'm keeping the account open, even if it will maintain a balance of zero for the indefinite future. Their legal asses are covered and there is no lawsuit in waiting. If nothing else, at least my ego is satisfied that they are no longer going to make any money off little me and when I get the new rainbow endowment card I can turn everything I buy, hell even my rent, into a benefit for the GLBT cause.

[W_L]

.........How much do you want to bet those rich people with $1,000,000 credit line didn't get that type of response!

 

$1,000,000 isn't much money nowadays. Banks don't offer good rates until you hit somewhere closer to $50 million.

 

$1,000,000 dollar credit lines are what most small vendors like independent bookstore, furnishing, restaurant, and other non-chain people have for their purchases.

 

Non-Corporate expenses are the ones that have the biggest problems with interest rates.

[JamesSavik]

I suffered through the Great Appliance Revolt of 1998. In a space of 4 months, my fridge, freezer, central air, dishwasher and washing machine got depressed and committed suicide.

 

I got myself jacked up pretty good on the credit cards and took several years to pay it all down. It was this lesson that taught me to never get any deeper than could pay off in a couple months on credit cards. Ideally, I pay off anything I spend the same month. After I paid all that crap off, I closed my Chase accounts because they constantly raised rates despite my prompt payments.

 

I closed my BP account which is managed by Chase and uses the same heavy handed tactics.

 

The best policy is NOT to deal with companies that use every possible legal means to screw you.

[Tipdin]

The first credit card I ever had is the only one I still use. (I have a whole deck of unused cards in my desk.) My first card and I have been together for over 30 years. I have never been late with a payment and have never missed a payment.

 

My interest rate is 27%.

 

I also have NEVER charged more than I was willing to pay IN TOTAL when the bill came to me. I always pay the entire amount. ...even when they shortened my window of payment opportunity to 15 days... (Thankfully that will become illegal.)

 

I don't think they like me.

 

I certainly don't like them.