Wednesday, January 17, 2007
(11:49 AM) | Adam Kotsko:
"Enjoy using your card"
In 2004, I was confused. I thought one of my credit cards was offering to upgrade my existing account to "Platinum," and being a huge fan of precious metals, I jumped at the chance. Turns out that it was actually a whole new account, the card for which I either never received or mistook for a credit card solicitation, and accordingly I never used it.Fast-forward to late 2006: This card that I never used expired, and they sent me the new one. I called to cancel, and they said that for security reasons they first had to close the old account and issue me a new number, which I could then cancel. Today I finally got the new card and called to cancel it, a process which on their end involved three discrete individuals.
Just as when I cancelled my Chase credit card because they were trying to destroy the Zapatistas, once it became clear that they were approaching the crucial moment of losing my business entirely, they became desperate. (In this case, it was rather bizarre since I already have another card with them.) Would I take a balance transfer at 2.9% for 9 months? 4.9% in perpetuity? My credit rating must be going down for some reason, because it seems like only six months ago I would've been offered 0% -- maybe if I had pushed them, I could've gotten it.
But expiring 0% offers are a rip-off for two reasons. First, the transaction fee, normally charged as a cash advance, amounts to paying the interest up front -- in some cases, fairly substantial interest. For instance, I once got an offer of 0% for three months. The trick was that they were charging a fee of 4%, meaning that I would effectively be paying a 16% annualized rate, not counting the interest from the transaction fee (which, because it has the higher cash-advance rate, is "buried" below the nominally 0% balance transfer -- meaning that you will be charged interest every month). Second, they're obviously hoping that you're going to forget when it ends, exposing yourself to at least one month of monstrous interest while you try desperately to find some way to roll it over.
That's why I'm a "low rate in perpetuity" man now. But in any case, I got to thinking: what kind of demands could I make? 0% in perpetuity with no fee? Unlimited balance transfer with partial forgiveness? Full forgiveness? I doubt I'll be in a position to cancel another card in the near future, so I've missed my chance to gauge the reaction to such demands.
In any case, I successfully cancelled this account that I never thought I had in the first place, and they transfered that card's credit line to my old one. At long last, the upgrade I had desired! But the card remains a lowly plastic one, not platinum. The customer service representative, defeated by my stonewall tactics, wished me a good day and exhorted me to "enjoy using [my] card in the future."
