Once upon a time, I had a Bank of America Visa account with a credit limit of $11K. During a period of hardship, I ran it up to around $10K before paying it down to zero. My reward for paying it off was having my credit limit lowered to $6,600 and my interest rate raised from 12% to 19%. A year or so later, another stretch of hardship ran my debt up to a little over $5K before I could stop using it and start paying 300% of the minimum payment amount to slowly whittle it down.
After a few months of not using the card and always paying more than the minimum on time, I got a letter warning me that my interest rate was going to jump from 19% to 24% if I didn’t “opt out” by sending a letter stating that I would never, ever use the card again. The letter gave me less than a week to get this letter delivered to them so I sent it via Certified Mail. I put the card in a box so that I would not even accidentally ever use it again.
The next month a mysterious charge for a mere $9.95 appeared on my bill along with my rate jumping to 28%. I tracked down the company that had made this charge to my account and called them up. They claimed to be a web service provider in another state, quickly agreed that there had been a mistake and said they would rescind their payment and notify BOA of the error. I never did get a straight answer on what service they might have provided for less than $10. I began to suspect that their service was given to BOA when BOA refused to lower my interest rate. I, after all, had not used the credit card and had, therefore, not violated my opt-out agreement. The conversation worked its way up to a supervisor level and pretty much ended with me screaming, “Close my account!”
My husband’s Capital One Visa interest rate was still at 12% and he had the available credit so we used one of those “checks” credit card companies provide and transferred the debt from BOA to C1. Of course, the following month, BOA sent me a bill for less than $40 for the interest that had accrued during the interval between my last statement and the day they processed my payment. I called them up and asked them to provide me with the exact amount I would need to pay to zero out my account, considering that once again there would be a delay between our conversation and the moment they finally posted my payment. I wrote the check and mailed it that day.
The next month, the BOA statement showed that they had underestimated the speed of the USPS and put a 50-cent CREDIT on my account. For this generous act, they charged me a $1.50 service fee, which meant I owed them one last dollar. I called and got one of the friendliest customer service reps I’ve ever encountered. When he brought my account up on his screen, he could not stop laughing. The tale of my one-dollar debt was going to make him the king of the break-room that day. He didn’t even need his supervisor’s permission to zero out my account. I told him, I wanted it printed out; I wanted that final statement with the big fat zero balance on it. He said I would have it and so I did. For all I know “forgiving” this dollar debt probably knocked a couple hundred points off of my credit score.
All of this occurred a few months back. Since then my husband stopped using his C1 card and started paying more than the minimum every month with the goal of us both being credit card debt-free. Last month, he ordered something over the internet and used the credit card since he was well under his limit and had no reason to suspect anything had changed. His bill this month revealed that his interest rate has doubled from 12% to 24%.
He called them up and demanded to know the explanation for this radical change in his credit-worthiness. He was told that he should have received a letter explaining that he could have “opted out” of this rate increase but since he didn’t reply there was nothing that could be done about it. He was yelling, “I got no such letter…” when the rep hung up on him. I’ll add that he’s never missed a payment, been late with a payment or paid less than the minimum. And since I’m the one who checks our mail, I’m pretty sure he didn’t get an “opt-out” letter because I would have brought it to his attention.
So the point of my sharing all of this is to open the floor to discussion. Feel free to share your stories about credit card company rip-off tactics. Or just vent your frustration with being on the hamster-wheel of endlessly escalating interest rates. If you know of legal ways to deal with these kinds of situations, I’d like to hear them. And, maybe, we should discuss starting a protest movement of some kind. How many people would be willing to take the credit score hit and the interest rate hike to just not pay their credit card bills in, say, December? Or, perhaps, we draft an “opt-out” letter to send to the credit card companies: Something along the lines of lower my rate to 12% or never see another dime from me as of January 1st, 2010… I dunno, what do you think?
Update: I realize that I wasn’t clear about the difference between the opt-out letter I received and the one that was supposedly sent to my husband. With mine, the deal was to promise, in writing, that you would never use your card again. (I still think that’s a very odd business stategy.) But, his was even stranger: He was required to promise that he would use the card again in order to maintain his interest rate. His failure to reply was then taken as a commitment to not use the card! As soon as he did use it, that set off the rate increase.
Wow. It doesn’t take much to get to the top of the Rec List, does it? How about some comments, folks? I know we’re not the only ones who have followed the rules and gotten screwed for it.
Hard to top your story! I got rid of my credit cards many years ago because of the exorbitant rates and the crazy fees that would be imposed if I were a few days late in paying. Debit card is all I have now.
Still, I just had major fun with my card issuer (Citibank). I was back in Norway 10+ weeks this summer. The card was canceled and a new one sent to my US address while away because of some security breach. I first discovered this in mid-July. Called customer service and had them re-activate the card that was just canceled. So far so good. Then, last week – a few days before returning to the US, the card was denied again. When I called, I was told that they could no longer extend the old card – tough luck for me that I was abroad and not in my apt where the new card was…
There was no way for me to convince them, pleading that I needed access to my account for the return trip. Luckily, I had access to other funds for my last days there – but being without a working card while traveling is definitely uncomfortable.
Yes, but you could have been a fake you in Norway, don’t you see? The real you would always be at your primary residence. 😉
When you call customer service, right after giving them your account number, they always want you to recite your address. Your name, account number and address are bound together by digital threads that cannot be sundered even by your Social Security number or mother’s maiden name. If you have recently moved and their data entry hasn’t caught up to that fact, the conversation is over. A couple of times I’ve had to call back and recite my old address in order to proceed.
Wow, that was incredible. I have T-mobile horror stories, but no credit card ones, fortunately.
I was once credit card free until I flew down to Daytona with a friend on his small plane and wanted to rent a car. Sorry, cash is no good, said all the rental places. If I hadn’t known a car dealer there who took pity on me, I’d have been walking the 60 or so miles down the coast to visit some other friends, or not been able to make the rounds at all. Reluctantly, I got a new one and have had one ever since. If I use it, I make sure to pay it off by the end of the cycle. Like most of the other BigCorps, they’re consummate rip off artists.
As Woody Guthrie wrote:
Ya gotta have plastic at hotels/motels, too.
Over a year ago, I booked a flight over the internet using my current debit/Visa card and used the quick check-in machine instead of waiting in a long line to get my boarding pass. Now here’s the funny/odd part: To verify yourself, you have to swipe a credit card in the slot of the machine. I used the bank debit/Visa card that had actually paid for the flight and the machine said it wasn’t “valid.” Next, I tried the recently deceased BOA Visa credit card that was still active at the time and again the machine said it wasn’t valid.
Now, I just happen to carry an EXPIRED Visa debit card on a BOA bank account that was closed five years ago. I’ve kept it because it has a really good photo of me and a photo-copy of my signature on the front. I always figured I could use it if my ownership of the rest of my plastic was ever challenged. THAT DEAD CARD worked with the check-in machine! It popped my name and MY CURRENT ADDRESS up on the screen!!! WTF!
Apparently, once you’ve had a BOA Gold Check Card, they never stop tracking you! Spooky, huh?
I’ll use this comment to reply to but some of what I’ll say here is “off topic” to the specific remark.
First of all, don’t be surprised your current address shows up via the airline check-in terminal. A buddy of mine works for an organization and long story short, they won some court cases wherein a person without any ID whatsoever can legally fly (domestic) in the USA.
Should this ever happen to you (presumably inadvertently like you lost your wallet/purse with ID) the procedure in place is to essentially run a credit check on you, which pulls up your current address and info and then “quiz” you on it to “prove” who you are.
As for credit cards in general, oddly enough this dovetails into the current health insurance debate because all credit cards are issued via either Delaware or South Dakota – why? Because those states had the most lax rules on CCs so all the companies “moved” their operations there.
The strategy by BigHealth is to implement something similar, let people “shop” for plans and then whichever state has the least regulation, that’s where suddenly all the insurance corps will be writing their policies – ie a race to the bottom.
As for myself, I probably haven’t had a credit card in 10 years but that doesn’t stop Providian and some others from attempting to “collect a debt” from me LOL. Face it, there’s nobody to stop them and nobody to hold them accountable.
The worst part is, even if you live in a wooden shack, sooner or later someone will steal, borrow or “mistakenly” set up and use your credit. I’m not sure if I know a single living American who hasn’t had a “mysterious” wrong charge on their credit report at least once.
Pax
Any organization that has ever received money from you will keep track of you no matter what. Privacy is such an illusion in this country.
I have just signed up for people-to-people lending at Prosper. It’s one of those silly San Francisco hippie ideas that I always go for.
From the Company Overview:
You have to connect your account to your bank or credit union to transfer funds electronically. I don’t know how well it works yet, but I think it’s a good idea. They had a shaky start in 2006, but then those awful government regulators got involved. Hopefully it has improved by now.
Thanks, Alice, I like “San Francisco hippie ideas,” too. 🙂 I’ve already bookmarked the link to show it to my husband. It would be great to tell C1 to go munch on sawdust and have this remaining debt paid down at a fixed interest rate.
Awful – hate credit card co’s. I think they sent out those “we’re raising your rates or you can opt out” deals this summer before the law that is supposed to protect us from that kicked in – it was their last chance to raise rates arbitrarily so they did. I must use cards sometimes but try to use them infrequently, live on a mostly cash and checks system. Paid them down pretty much this summer, so hopefully the outrageous interest rate is only on a small amount. must stop writing now – just thinking about it is bringing on a stress event and no doubt shortening my lifespan.
I rec’d this post because it reminded me of the “reforms” insurance companies are facing. On the same day this diary came out, I read a story about how credit card companies are getting around their newish restrictions. Things like charging a maintenance fee if you don’t use your card and only signing up variable rate accounts because they can jack up the interest rates on those accounts. Variable rate accounts used to be a consumer boon…now they suck. So, I’m thinking of how the insurance companies are going to jack us once they supposedly can’t deny benefits or coverage for pre-existing conditions. It made me rather ill…pun fully intended.
I got off the credit card merry-go-round a few years ago, but I still hold one BofA card for emergencies. I shudder to think what they will do to me once I really need it.