I have an Amazon/CHASE credit card with a decent credit limit. I use it when I need to make higher-dollar purchases, or risky purchases where I might need to return the item (damaged goods) or dispute the charges (online purchases).
For this “service”, I get a $25.00 Amazon.com gift certificate for each $500 I charge on the card, as well as accrue “points” which add up to miles and other pseudo-gifts.
I was knocking down that balance recently via their web interface and tracking all of my expenditures in Microsoft Money 2007, and wanted to use the new “Budgeting” feature of the software to track my budget.
As I was filling out my bank information for this particular card in the system, it asked what my APR was. I had no idea, so I called Chase Bank to find out. When I reached an English-speaking operator, she said that my APR on the card balance was 29.24% (NOT a typo!)
I asked if they could lower that APR, and they said no… they don’t offer any lower rates. How can you possibly NOT offer a lower rate than 29.24%?!
Since they would not lower my APR, I asked if they could increase my credit limit to keep my existing balance under 30% of the total limit on the card. This is recommended to achieve a high credit score. The operator said they’d submit my request to raise my credit limit, but it may take a few days before I receive a response.
A few days later, I receive a letter declining my request to raise my credit limit on the card, which I immediately put in my “Credit Reports” file in my office. My history on that card has been strong, and every payment I’ve made has been 6-10x what the normal payment was supposed to be. Not only did they raise my rates to an astronomical amount, but they wouldn’t increase my limit to keep my balance under 30% of the total.
I check my credit score almost every month, depending on my level of activity. I bury it in the “cost of doing business”, and it helps. When I first started checking it, I noticed a LOT of erroneous activity and charges, which I immediately wiped out. My credit is now pristine, clean and rising up fast, as it should be. I highly recommend anyone who doesn’t check their credit at least 2-3 times a year, to get on the ball and start.
If I was in financial hard-times, wouldn’t it be counter-intuitive to raise my credit limit like this? If I already can’t keep the balance low, won’t raising my interest rate only make it harder and harder to pay it off? So instead of lowering my rate, increasing the chances I’ll pay it off, they raise it, increasing the chances I’ll default on the card balance or claim bankruptcy. In either case, Chase Bank loses. Luckily for me, I’m not in financial hard times, and I can pay this balance down quickly.
I don’t understand the logic here though, other than a money-grab for them.
I immediately decided to initiate a balance transfer of the entire Amazon/CHASE card balance to my Bank of America credit card at 1.99% APR, bringing the Chase card to $0.00 balance. Now I’m paying 1.99% on the Chase balance through B of A, and 13.99% on the remaining balance ($62).
I won’t close the credit card because closing $0.00 balance cards is VERY BAD for your credit score, but I will be cutting it up and not using it until I receive a new card via the renewal process in a year or two.
I can’t say enough about Bank of America and how amazing their customer service, hardware, policies and flexibility is. At one point when paying for my daughter’s daycare electronically via the B of A website interface, the check that daycare was supposed to receive, went missing.
Not only did B of A offer to send out a new check, they also offered to eat the cost of the Stop Payment fee AND the daycare late payment fees. They also assigned a human being to follow the process through until it was fixed. That person called the daycare here in CT and sorted out all of the issues, and it turns out the check was mis-directed to the wrong daycare building by mistake.
I can’t speak highly enough about B of A. They are simply amazing, and they should be the model by which other banks look up to.