The Big Think

May 1, 2007

Chasing Them Out

Filed under: Uncategorized — jasony @ 1:15 pm

Chase, the hugemegasupermondoglobcorp that takes in more money per week than many nations, has finally driven me away. It took them awhile, but I got off the phone with them an hour ago and had to, as my friend Jan says, Put My Thing Down. I was trying to do something very simple- make a full payoff- when the customer “service” person informed me that they don’t give full payoff information. Ever. See, if they tell you how much you owe.. exactly.. then you send it in and they can no longer charge you interest. It’s much better for them if they can make you carry a balance so that they can charge you interest on that interest.

So say you have a balance of $100 and want to pay it off. Your statement says

$100 balance
$3.00 interest (or whatever)

total balance due is $103.

Easy, right? Send them $103 and you’re done. Not so fast, bucko. If you had a balance the previous month (which most people do but we try and avoid), then you are in the “active cycle”, meaning that they are constantly computing how much interest you owe. This means that you can send them a check for the $103 and think that you’re done, but in the meantime (while the check was in the mail) that $103 has been accumulating interest. So your next bill will read:

previous balance: $103
balance paid: $103
current interest $.75 (or whatever)

Hey, look! You just got charged interest on your interest even though you were attempting to pay off your full bill. So then you send them a check for $.75 but then the whole thing starts over again. Many credit card companies changed their policies a few years ago to allow this (you may have seen it called an adjustment to the “grace period” where they lowered the grace period to zero). Unlike most people I try and at least understand those rule change pamphlets that they send out. I was wary of this little “adjustment” but I’m appalled that the credit card companies can actually pull it off. I used to be able to call the credit card company and request a payoff balance. They would say “well, as long as your check gets here by friday they balance will be X”. Fair enough. I realize that the interest is compounded daily and don’t mind paying what is right, but hiding it from the consumer? That’s just wrong.

More than the few extra dollars of interest, here’s the real reason they do it. If they can keep even .01 as a balance on your card, this means that any and all new transactions start accruing fees and interest the moment you make them. You have to have a true zero balance on your cards before you get the benefit of that 30 day grace period (which has been shortened to 24 days on most cards). Have a balance of even an penny? That new HDTV will start costing you 15% from the day you bought it. Sorry, sucker, we’re the credit industry.

Now, before you tell me that it’s no big deal, that the amount we’re talking about is mere pennies, let me say that it’s the principle of the thing that bothers me. No company should be able to get away with not telling you your balance in order to benefit their bottom line. We are good customers with a 20 year history with Chase and all I wanted to do was pay the bill. To have the rep tell us that she couldn’t reveal our balance was just like saying “screw you, we’re going to soak you for a few more dollars”. If they’re willing to treat a 20 year customer like this in order to get a few dollars more then we’ll exercise our right to tell them to take a hike.

So we payed off the card (plus a little extra to cover the mystery interest) and I can’t wait to call them to cancel. I’m thinking of writing somebody much higher up the chain about it. It’s not your customer service people (competent and mildly friendly), but it’s your anti-consumer policies that are losing you a 20 year customer with a great credit rating.

No wonder the credit industry is perceived as being so evil.

I called USAA and asked them about their credit cards. With a simple call we got a no fee, extremely low rate (prime + 0) rewards card. We like and trust USAA. They have been really good to us and- here’s a biggie for me- we don’t mind writing our insurance checks to them. The fact that they pay us a dividend every year is proof that they’re trying to do good by their customers. I explained my complaint with Chase and she assured me that they don’t try and pull any stunts like this. Need a payoff balance? Done.

Why didn’t we make this move sooner?

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