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Credit Card "Upgrade" can suck an anus.

dispatch.odispatch.o Registered User regular
edited February 2012 in Help / Advice Forum
So, I have some credit card debt. It wasn't due to bad spending habits or going crazy and not having a budget. I had to move cross country in a hurry to secure a full time position at an okay paying job.

I am with USBank and have a Platinum Card.

This card has a minimum interest rate of around 9% and maximum of around 23.5%. Going by what I paid in interest last year and total debt on the card, I am seated firmly around 9%. I do not charge anything to this account, it just sits there being slowly paid off. (Actually I have my netflix on it because I lost my debit card when I moved and needed to renew)

A week ago or so I get some junkmail from them, as usual. However within this junkmail is a notice that my account has been "upgraded" to a Flexperk cash reward Visa and that my new card would need to be activated, and that I'd have to adjust all my billing to note the new expiration date. Normally they just sort of send a new card for the next expiration date a couple years farther away than the one I have and I do it. This time I look at the expiration date... it is one month after the one I have would expire.

Sensing something is wrong, I check into the difference. FlexPerk cards have a minimum interest rate of almost 14% and you "get 1% cash back". I don't use the card so why the fuck I should care about this is beyond me. Essentially they want me to chip in my platinum card with a nice low rate and activate a card with a minimum of 5% rate increase.

I sent them an email telling them I was flattered but I'm not an idiot and would like to decline the upgrade, and that I have no intention of activating the new card. Essentially fuck you no thank you.

My question is, what can happen if I don't activate the new card? What should I do if they give me shit about it? It's obviously just a grab for more money, as the card expires a month after the one I currently have.

Posts

  • DjeetDjeet Registered User regular
    I'd just destroy the card without activating it and keep using you old card, that should be all you need to do to keep your old account and not open the new one. Also I'd call up their customer support and ask them what's going on. Did they open a new account (line of credit) for you? Do you still have your previous account? If you don't trust them I'd pull your credit report (annualcreditreport.com) and see if there is a new line of credit on it.

    Also check your statements and see if they have changed the terms on the original account. You can opt out of new terms but you only have a limited time to do it (30 days I think). Should you choose to opt out you may not be able to use the card anymore, but you can pay back on the original terms.

  • kilroydoskilroydos Registered User regular
    Normally with things like that, your account has been changed. They're not really asking your permission, rather informing you of their decision. You might see something in the terms about declining the change, but that usually requires closing your account and continuing to pay off your remaining balance under the existing terms. You'll see that quite often with rate increases.

    Call their customer service directly and ask lots of questions. They won't likely lie to you, but they might not mention something unless you ask. Ask about your options, ask what happens if you want to decline. Ask about repayment terms if they want you to close your account upon declining the "upgrade".

  • MuridenMuriden Registered User regular
    Be ready to completely pay off the account and close it. As Djeet said this is likely that they have changed your account either by discontinuing the product line you are currently under or some behind the scenes stuff that made it so you were no longer eligible to retain that product.

    Call the Customer Service department and tell them that you want to keep your current card and do not wish to be upgraded. I can't stress this enough, be nice but be firm with what you want. Speaking from prior experience these people get vocally reamed for 8 hours a day all week. Tell them exactly what you want and be pleasant about it. Depending on the center's metrics and initiatives they might initially deny what you're asking but you need to be firm and say "I'm looking for X, what are you going to do to help me get there?".

    If they are unable to accommodate this you tell them you will close your account, don't let this be an empty threat.

    MrGulio.332 - Lover of fine Cheeses. Replays
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  • ThreeCubedThreeCubed Registered User
    kilroydos wrote: »

    Call their customer service directly and ask lots of questions. They won't likely lie to you, but they might not mention something unless you ask. Ask about your options, ask what happens if you want to decline. Ask about repayment terms if they want you to close your account upon declining the "upgrade".

    Yes, this, especially the bolded part except I doubt that they will want you to close your account, especially if you're paying on time every time. Hopefully the conversation works out so that you want to close the account because they aren't giving you what you want and then they will try to please you enough that you don't close it.

    But if they won't budge, close the account and work out repayment terms. Eff them. If you need a line of credit you can go elsewhere.

    EyQGd.jpg
  • ThreeCubedThreeCubed Registered User
    Muriden wrote: »
    Be ready to completely pay off the account and close it.

    Can't he close the account and still pay it down? Or is that only for people who can't pay their minimum and therefore have to "work out a deal"?

    EyQGd.jpg
  • kilroydoskilroydos Registered User regular
    Margarazzi wrote:
    kilroydos wrote: »

    Call their customer service directly and ask lots of questions. They won't likely lie to you, but they might not mention something unless you ask. Ask about your options, ask what happens if you want to decline. Ask about repayment terms if they want you to close your account upon declining the "upgrade".

    Yes, this, especially the bolded part except I doubt that they will want you to close your account, especially if you're paying on time every time. Hopefully the conversation works out so that you want to close the account because they aren't giving you what you want and then they will try to please you enough that you don't close it.

    But if they won't budge, close the account and work out repayment terms. Eff them. If you need a line of credit you can go elsewhere.

    Most of the time, this isn't really a negotiation between the cardholder and the issuer. The issuer has decided to change your account to one that is more profitable to them in some form. Your options at this point are normally to either accept the change or to close your account and pay the remaining balance following the original terms of the agreement. Heck, sometimes they'll just up and close your account and tell you to reapply if you want a new account. Of course, the type of account you had previously may not be available at the rates you had, so you're in exactly the same boat.

    The issuer doesn't want you to close the account, they want you to agree to the new terms that are more profitable. The hope is that the inconvenience of changing issuers, card information, automatic billing, etc. is enough to sway you. If not, they're not going to leave the account as is, no matter how many supervisors you ask to speak to at the call center. That decision is an automated thing based on projected profits and would only be reversed on incredibly large or otherwise profitable accounts. Those accounts don't normally have these things happen to them anyway, so those customers aren't having those conversations.

    The good news to take away from this is that you were being responsible with your card usage since responsible users don't equate to profits for card issuers. Good job! Now use those skills on a new account or in other areas of your financial life and you'll be golden and people will be begging to issue you credit to try to lure you out of fiscal responsibility. Use your powers wisely.

  • dispatch.odispatch.o Registered User regular
    Same account number, it is not a new account. I've been with them for something like my entire life since I got my first shitty dishwashing job and I've really never had something like this happen. I did once call and ask why my interest rate went up for no reason and they couldn't give me a reason and just set it back to where it had been for 7 solid years. So I can't say I've been screwed over by The Man in this regard.

    If they've basically changed my account and I have no say, I will probably just do the stupid thing out of irritation and start doing the yearly balance transfers to cards with 0% apr for the first 12 months. I get at least half a dozen of those a week and my credit is flawless. I'm just not a fan of having that many accounts open, I prefer my life of one credit card for emergencies, a credit line for emergency cash and my debit card.

    Thanks for the advice, I expected as much but was hoping for insight and got it.

  • MuridenMuriden Registered User regular
    Margarazzi wrote:
    Muriden wrote: »
    Be ready to completely pay off the account and close it.

    Can't he close the account and still pay it down? Or is that only for people who can't pay their minimum and therefore have to "work out a deal"?

    This thread seems to be dead but I wanted to answer this. The only scenarios that I've seen where you can work out a payment plan after an account is closed is when your account was closed by the issuing side and the amount you owe is considered a collections balance. Simplistically your account is looked at as a line of credit that can be used so long as the relationship associated with the account is active. Basically if you say you want to close out your account you no longer want that line of credit. This would mean you no longer wish to retain a balance and any outstanding amount owed would be due.

    The only time they would allow you to continue partial payments is when they believe you will eventually pay off the amount outstanding but do not wish to allow you to add more to the balance.

    MrGulio.332 - Lover of fine Cheeses. Replays
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  • ThanatosThanatos Registered User regular
    Muriden wrote:
    Margarazzi wrote:
    Muriden wrote: »
    Be ready to completely pay off the account and close it.
    Can't he close the account and still pay it down? Or is that only for people who can't pay their minimum and therefore have to "work out a deal"?
    This thread seems to be dead but I wanted to answer this. The only scenarios that I've seen where you can work out a payment plan after an account is closed is when your account was closed by the issuing side and the amount you owe is considered a collections balance. Simplistically your account is looked at as a line of credit that can be used so long as the relationship associated with the account is active. Basically if you say you want to close out your account you no longer want that line of credit. This would mean you no longer wish to retain a balance and any outstanding amount owed would be due.

    The only time they would allow you to continue partial payments is when they believe you will eventually pay off the amount outstanding but do not wish to allow you to add more to the balance.
    While I am not an expert, from my understanding if they change the terms of the card, he is allowed to refuse the change in terms, and finish paying off the remaining balance under the previous terms. They are not, to my knowledge, allowed to jump his interest rate up 5% and force him to either pay it off in its entirety or pay the new, higher interest rate.

  • NobodyNobody Registered User regular
    Thanatos wrote:
    Muriden wrote:
    Margarazzi wrote:
    Muriden wrote: »
    Be ready to completely pay off the account and close it.
    Can't he close the account and still pay it down? Or is that only for people who can't pay their minimum and therefore have to "work out a deal"?
    This thread seems to be dead but I wanted to answer this. The only scenarios that I've seen where you can work out a payment plan after an account is closed is when your account was closed by the issuing side and the amount you owe is considered a collections balance. Simplistically your account is looked at as a line of credit that can be used so long as the relationship associated with the account is active. Basically if you say you want to close out your account you no longer want that line of credit. This would mean you no longer wish to retain a balance and any outstanding amount owed would be due.

    The only time they would allow you to continue partial payments is when they believe you will eventually pay off the amount outstanding but do not wish to allow you to add more to the balance.
    While I am not an expert, from my understanding if they change the terms of the card, he is allowed to refuse the change in terms, and finish paying off the remaining balance under the previous terms. They are not, to my knowledge, allowed to jump his interest rate up 5% and force him to either pay it off in its entirety or pay the new, higher interest rate.

    I think Muriden may be referring to a customer just calling in to cancel. If the OP goes through the opt out process (which the paperwork he received with the card should give him the procedures to follow) he should be allowed to pay off under the original terms.

  • dispatch.odispatch.o Registered User regular
    Well, they keep attempting to call me when I'm asleep or at work and leaving no message, so I assume they will eventually get ahold of me. I will update the thread with the happenings probably later today.

  • kilroydoskilroydos Registered User regular
    Nobody wrote:
    Thanatos wrote:
    Muriden wrote:
    Margarazzi wrote:
    Muriden wrote: »
    Be ready to completely pay off the account and close it.
    Can't he close the account and still pay it down? Or is that only for people who can't pay their minimum and therefore have to "work out a deal"?
    This thread seems to be dead but I wanted to answer this. The only scenarios that I've seen where you can work out a payment plan after an account is closed is when your account was closed by the issuing side and the amount you owe is considered a collections balance. Simplistically your account is looked at as a line of credit that can be used so long as the relationship associated with the account is active. Basically if you say you want to close out your account you no longer want that line of credit. This would mean you no longer wish to retain a balance and any outstanding amount owed would be due.

    The only time they would allow you to continue partial payments is when they believe you will eventually pay off the amount outstanding but do not wish to allow you to add more to the balance.
    While I am not an expert, from my understanding if they change the terms of the card, he is allowed to refuse the change in terms, and finish paying off the remaining balance under the previous terms. They are not, to my knowledge, allowed to jump his interest rate up 5% and force him to either pay it off in its entirety or pay the new, higher interest rate.

    I think Muriden may be referring to a customer just calling in to cancel. If the OP goes through the opt out process (which the paperwork he received with the card should give him the procedures to follow) he should be allowed to pay off under the original terms.

    Even a customer who calls to cancel their card will still be able to repay the balance according to their original terms of the agreement. All a cancellation means to a card issuer is that the card account can no longer be used as payment. You can also sometimes lose any awards or bonus points or promotions that might have been active on the account, but that's all going to be in your Cardholder Agreement and varies by issuer.

  • EggyToastEggyToast Registered User regular
    Another thing to ask the customer service person is if the new interest rate will apply to older charges, or if those charges are "locked in" at the existing interest rate and the new rate only applies to new purchases. My understanding of this is that they can easily do the math to account for charges with different interest rates on one account, since they all accept cash advances (with those separate % fees and rates) and have regular promotions at different interest rates.

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  • kilroydoskilroydos Registered User regular
    That's correct. Every charge has a rate associated with it, and balances at the lowest rate are paid off first, so the systems have to be able to auto-track those things. I have a not-so-funny story of speaking to a customer who was getting this tiny interest charge on his account every month, and was furious about it. He'd just transferred somewhere north of $15,000 to his account at a promotional 0% rate. He'd forgotten about $5 that he'd charged immediately beforehand, so that $5 was going to accrue a tiny amount of interest every single month until he paid off the entire balance to "get to" that last little bit that had a higher rate associated.

    He was a bit older and was so upset he was about to cry on the phone, even though it was a negligible interest amount every month. He had planned everything out so carefully to know what his monthly payments were going to be based on his transferred amount and this was throwing all of that work away. I completely understood his pain, but because of the way he had processed his transfer, there was nothing I could do short of suggesting he might try transferring the whole balance to another card and back again to us.

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