My Nasty Little Surprise
Well today started out just swimmingly! I sit down to pay the bills and what did I discover but that Chase has jacked my credit card interest rate to 27%! 27%! WTF?!?!?! Now, as I’ve explained, I don’t keep a balance on my cards, but still. What if I did carry a balance one month or something. That’s a ridiculously high interest rate.
My first reaction was that something must have happened with my credit score. While I understand the economy has caused a lot of interest rate hikes, normally good customers don’t go from 11.5% to 27%. I already thought 11.5% was too high, but didn’t complain because I knew how the system was going. At any rate, I check my credit score and everything is good. In fact, it’s gone up a few points, Yay for me!
By now I’m a little confused as to what’s going on, so naturally I call. Here’s how the conversation went down.
Chase Rep: Thank you for calling Chase, this is ______, may I have your name please.
Kristy: Hi, this is Kristy _______.
Chase Rep: Hi, Ms. ______, how may I help you today?
Kristy: Well, I noticed that my interest rate has jumped from 11.5% to 27%. Can you explain that, please?
Chase Rep: Yes ma’am, I would be happy to assist you, one moment while I review your account.
***Note*** I skipped over all the verification stuff because who cares about that, right? You want to know what the heck they were thinking, jacking my rate that high! I know, me too!***
Chase Rep: Yes ma’am, it looks like your rate was raised due to information obtained from your credit report.
Kristy: Such as?
Chase Rep: I am not at liberty to discuss your report with you, ma’am. You will have to pull it for yourself.
Kristy: I have, hence the confusion. My record is better than when I first got the card and yet my rate is higher now. You’d already raised my rate to the 11.5%, but this is ridiculous. Can you please explain why it is this high and tell me what we can do to lower it?
Chase rep: I’m very sorry, but there’s no possibility of lowering it at this time. You’re within your right to opt out of the rate if you like.
Kristy: Yes, but then you close my card. That’s not what I want.
Chase rep: Well, your only other option is to switch to a non-rewards card and that will lower your rate.
Kristy: How much?
Chase rep: 2%.
Kristy: Whoop-de-doo…*I laughed a little so they wouldn’t think I was trying to be rude*
Chase rep: Is there anything else I can help you with?
Kristy: Yes, you can explain why you raised my rate, please. You keep glossing over that particular question.
Chase rep: I’ve already explained that it was due to information on your credit report.
Kristy: Fine. Is there a supervisor available that I might speak with, please?
Chase rep: One moment.
…..
Dial Tone.
The SOB hung up on me! LOL. So by this point, I’m fuming. I call back and wait through the queue for the next representative. Luck of luck, I get the same person who hung up on me in the first place. I tell them that it’s me again and I’d still like to speak to a supervisor. They just hang up on me. Ok fine, you want to be that way.
I call my local branch and talk to one of the managers I used to work with. I told him the situation and the rep’s name and we call the priority line. This is the line that the Chase employee’s can call to get service when they’re working with customers in front of them. We happen to get one of the managers over there, one who I worked with a lot when I was at Chase. At any rate, we tell him the story and he looks over the account.
What it boils down to is that Chase jacked my rate because of my student loan balance. Having student loans outstanding has made me a risk in this market so my rate is now higher. Based on their new scoring model, I don’t qualify for a lower rate because they count those loans as part of my debt to income, even though they’re deferred and I pay on them monthly anyway.
It’s the principle of the matter that makes me want to close this card immediately. I’m a good customer. I pay my bills on time, I’m never late, and there was a period of time where I carried significant balances on this card. They’ve made plenty of money off of me, yet I’ve still been loyal. Then the logical side kicks in and I realize that none of that matters. My options are to suck it up and continue paying it off every month (or just not use it) or close it out. If I close the card I lose some pretty good rewards and it will adversely affect my credit because it’s the card I’ve had the longest.
But, then there’s the matter of the service I received. Being treated poorly by a company goes a long way in making a decision on whether to frequent them or not. Now, I’m not sure what that rep’s problem was, I don’t think I was asking anything too complicated. But, to hang up on me twice was uncalled for. And this isn’t the first time I’ve had terrible customer service through the main line and had to go through the priority line. I really just don’t want the hassle.
So I think what I’m going to do is finish out the rewards cycle I’m in, use them, and then put this card in my safe deposit box. I’m not going to close it for now. However, I’ll probably pull it out once every couple of months and make a small purchase to keep it active so they don’t close it out. But, by all accounts, my relationship with this credit card company is done.
What are your thoughts? What would you do in this situation?
Related posts:
- What The Credit Reform Has Done To Me
- Dear CitiBank: What the heck is an “interest rate rebate?”
- Tom’s second post – Into the abyss…
- 25 Things About Me (Jonathan)
- Ask the Readers: What would you change at MYC?
That would make me furious. You are not the only person I have read about who has had problems with Chase. Bloggers seem to run into regular problems with them. I still might be tempted to close the account – after you have gotten your rewards, of course. If it is the oldest card you have then you may not want to, but if it isn’t well, you might consider it. In any case – good for you for tracking the problem down and getting the answers! A lot of people would have given up.
Do you keep a balance on that card? It doesn’t sound like it, since you say you’re going to finish out the rewards cycle rather than pay down the balance–so what does it matter what the interest rate is, if you’re not paying interest? I understand that it’s the principle of the thing (and I think you were treated very rudely by the CSR). But I don’t know what my interest rates are or whether they’ve been raised recently–I don’t care. I pay my card (a Discover rewards card) in full every month, so they can do whatever they like to my interest based on the market or my credit report or anything else, and I don’t care one bit. (And for what it’s worth, almost every credit card company has been revisiting the way they assign interest rates–the old economy is gone, so the fact that your credit rating qualified you for 11% interest last year means nothing today, even though it’s not your fault. The rules have changed for everyone.)
If not using the card any more means you won’t be getting any rewards, or will have to open another card, then you might be cutting off your nose to spite your face. If you’re not paying them interest, you’re not making them that much money–a few cents that the merchant has to pay every time you use it but nothing else. I wouldn’t make a hassle for myself simply to teach an anonymous company a lesson about the rudeness of their CSRs.
New York Times warned this exact thing a few weeks ago right after the new credit card laws were passed. NY Times mentioned that CC companies were going to go after consumers like you a.k.a “Free Loaders” in CC company lingo. The reason being the new laws take effect of Feb-2010 which makes it difficult for them to squeeze money out of consumers with not-so-good credit and missed payments. For instance according to the new laws, CC company can raise up your rate if you miss a payment, but they have to revert it back to the original interest rates after the consumer has paid on time for six months in a row.
.
.
What they are doing now is to increase the interest rates of as many consumers it can before the Feb 2010 deadline to reduce their expected decline in profits in the coming years.
Yes, Chase is turning out to be, by far, the worst of the credit card issuers. I wouldn’t be surprised if the CSR was actually told to treat a no-balance customer like you badly so that you’d go away – they make minimal if any profit off of us. I’d take two things into account with regards to closing the card:
1) Is it your oldest card by a significant amount of time? Because how old your oldest card is affects your credit score, though apparently 10 years is still not old enough to win you brownie points with FICO, grr. I think you left a comment on my blog when I bitched about this a few months ago.
2) You probably know this, but CCs are considering charging an annual fee again, targeted at those of us who don’t carry a balance. So keep your eyes peeled for those notifications.
I understand that credit card companies want to make money – that’s all fine and dandy. And I know that their scoring models are based on probabilities, and that’s fine and dandy too. What you get may not always be fair to your situation.
But I see two BIG problems with this scenario if Chase wants to retain cutomers.
1. Hanging up on you is absolutely ridiculous, not once but TWICE. In my opinion, this is the scummiest thing a customer service rep can do, just so they don’t have to deal with your problem. You can’t walk away when a customer is in your face, but these jerks think they can hide behind a phone. I don’t understand how corporations can tolerate this kind of behavior by their reps.
2. You just wanted information, which you got eventually anyway. Was it really that hard to explain to someone why their rate was raised so they can correct the problem if they want? A lack of transparency will just make people more angry at dealing with the CC companies.
All in all, I’m sick of dealing with credit card companies and frankly, will do just fine with debit from this point forward…
Thanks for sharing this story! :)
I don’t even know what my rates are because I never carry a balance. Who cares what they are?
If you plan to carry credit card balances soon, you have bigger problems than your CC rate.
This made me want to check my 3 Chase accounts. My 2 best rewards cards Freedom and Amazon both have a 13.24% rate, and the crappier rewards card is only 8.4%. I guess my student loans haven’t caused them to send my APR skyrocketing yet! Honestly I never pay attention, because I always pay off my balance each month in full. I am getting rid of the Freedom card as soon as I can cash out my next reward. They’ve changed their awesome rewards policy, and next year they are going to start charging an annual fee. I’m over Chase and looking for a better card.
That customer service is enough for me to close the card.
*shrug*
Unless they sweeten the deal by giving you $25 to smooth over that SNAFU.. they don’t deserve you
Even if it is your oldest CC.
I closed my oldest CCs just because I don’t care about my credit report right now. (Am planning on moving soon to U.S… where everything resets)
Anyway, my whole report is spotless with no debts, no late payments, and if lenders want to play stupid with me just because of some numbers on a report, they can keep their business and I’ll keep my money.
@BM
“New York Times warned this exact thing a few weeks ago right after the new credit card laws were passed. NY Times mentioned that CC companies were going to go after consumers like you a.k.a “Free Loaders” in CC company lingo.”
I’ve read this a few times as well, but I’m having a hard time understanding the reasoning behind it. Jacking the interest rate up for the “free loaders” accomplishes nothing b/c the free loaders don’t pay any interest. It would make more since for the CC issuers to reduce the amount of available credit to free-loaders – that way there is more to lend to the people who don’t pay their balances off each month. They could also bring back the good old annual fee or get rid of the interest grace period so that NOBODY could escape certain charges.
I’m a free loader. I love being a free loader. I use and abuse the grace period every month, never pay a dime of interest, and get rewards in the form of awesome Best Buy gift cards for FREE! The current rates on my cards are of no concern to me – they can jack it up all they want. It would be a different story though if the grace period wasn’t there or if I was paying an annual fee. I would probably stop using credit all together at that point depending on the changes.
@Kev,
I can only speculate why CC companies would jack up the interest rates of the so called “Free Loaders”. With an economy that is still not out of the woods yet, CC companies may be counting on at least few responsible CC users to default and carry a balance. I guess it is a numbers game for them, if they jack up interest rates of 100 responsible consumers and 5 of them default in the coming months, that’s additional income for CC companies that they did not have before.
The biggest reason they do this is because there will be loss of some revenue for CC companies when the new laws take effect on Feb-2010 and jacking up interest rates on more consumers might help them bridge that gap.
Another thing in the new CC laws that take effect on Feb-2010 that bugs CC companies is that there is an absolute ban on interest-rate hikes on existing balances unless the card-holder falls 60 days behind on the minimum payments.
The CSR hung up on you??? I thought that it was somesort of a policy that they don’t hang up on you at all? Unreal. When I had all sorts of problems prior to the BK, Chase was the one company that did not want to try to work out some sort of a repayment plan. Even BOA was willing and able to work out a repayment plan.
Carrying balance or not, the CSR has no idea of Customer Service at all.