Friday, January 9, 2009

Credit Cards get messy...

Yesterday I received a very interesting letter from a credit card company where I have been a card holder for the past 10 years in a very good standing. Letter states that my credit card's interest rate will increase drastically due to today's economy. This rate increase will be applied only to new purchase. It will not impact any current balance transfer rates. At least that is a good news. It also gave me an option to opt out from this "offer". I have called customer service rep at the given phone number and told her that I have received such letter and asked her what does it mean that I can opt out from this offer. She very politely explained to me that yes, as letter clearly states, I can opt out from this credit card rate increase, but there is a catch... Credit card account will be closed at the card's expiration date. And I will continue to be billed on regular basis on my remaining balance until it is paid in full. She also told me that as a result of that, there will be a note on all of mine credit bureau files, that this account was closed at customer's request. Which in effect considered to be a negative remark and might downgrade my credit score. So what should I do? I figured, since I am not using this card for daily purchases and this is one of my first and oldest  cards, why would I close it. So I have bowed to their "offer" and hung up the phone.

Ironically, when I was driving to work this morning, I heard an interview on the radio about credit card industry from some well known consumer advocate. He said that a lot of customers complain that they receive this kind of letters. And warned people not close these cards, if they are not planning to use them. Since it will take an effect on your credit score, because account is being closed at customers request.

Has anyone received this type of letters from your credit card companies? What are your thoughts about it?

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