Tuesday, November 06, 2007

Reading Pays- Especially When It Comes to Credit Card Updates

My mailbox was full today, so it was tempting to jettison the "Important Amendments to Your Credit Card Agreement" envelope into a "To File" box without opening it.

Maxed Out has left me with a greater sense of fiscal research duty, so I opened the fat envelope and pulled out a disjointed handful of papers. Everything about this envelope seemed designed to discourage actual reading. That made me suspicious, so I trudged on.

The cover sheet told me how my account was improving and listed lots of great new features but no drawbacks. Nothing in the cover letter merited a legally mandated update.

On the second page I found gold- for the credit card company- a 3% increase on all cash and cash-equivalent advances. This increase applies to new and outstanding balances. Nice, eh? Then I found the part they worked so hard to discourage me from reading:
You may reject the APR increase by following the Rejection Instructions described below.
Seriously? Well, yes. They don't make it easy though:
1. Write to use at [postal address only]. Clearly print or type your full name and full credit card account number and state that you reject this change. You must give us the notice in writing it is not sufficient to telephone us. Send this notice only to the address in this paragraph. Do not send it with a payment or any other type of customer service request. This mailbox is ONLY for rejection of the Annual Percentage Rate Amendment.
2. We must receive your letter by [date approximately 3 months in the future] or your rejection will not be effective.
So by writing a letter in which we emulate Bartelby's "I prefer not to" we can maintain our 3% lower rate? No wonder they make that paperwork so boring.

Even though we don't ever use cash advances, I'm sending a letter in on principle.

Not reading these things can cost us real money.


Anonymous said...

Got the same thing today. Thanks for the tips! ~Karen

Jeremiah McNichols said...

Yes, these policies are so frustrating. I just can't bear to slog through those changes of terms they send out so frequently to dig this stuff up. A good argument for having just ONE credit card, I guess - then we might be better able to stay on top of their shenanigans.

Nutmeg said...

I read one of these about 6 months ago, and I couldn't really believe they were saying... hey we're going to increase your rate.... but if you don't want us to, just write us.

Of course, you need to have time to open the mailing, which seems really unimportant and very much like junk mail.

darthkittenlover said...

The catch is: "If you have not used your account since rejecting any APR increase notification sent to you, use of your Account (including use of any access checks) will result in the new APR being applied to your account."

In other words, yes, you can reject the rate increase, but that'll only apply to outstanding balances -- you won't be able to use the card again without activating the increase.

Apparently BofA is hitting tons of members with enormous rate increases. I have two cards that were both bought out by BofA/MBNA recently, and I rarely carry a balance either of them month-to-month. I'd cancel them both in a second if it wouldn't destroy my credit score.