Providian! Arg!

[CNF2002]

Anyone else have this credit card?

I had a small balance of a few thousand dollars. It was fine, decent interest, made a little more than the minimum each month and just every once and a while threw a big chunk of cash at it, never late, etc etc.

Then I call on my periodic check for the rate (they suspiciously never tell you their rates online or in their monthly statement) and I find out its 25%! Unbelievable, and when I asked why it jumped 10% they told me because Prime Rate had gone up.

Please! My other credit cards have low interest and are stable. I recently read an article that Providian is penalizing its existing customers to cover rising defaults and increased 'new customer' costs (as they are fishing with so many low interest deals), attacking those customers who usually pay regular amounts...jacking up interest to almost 30% for some people for no reason but to boost profits on credit cards with regular balances.

Stay away from this company.

PS: This all happened after they were bought by Washington Mutual, and me-thinks that WA either has poor practices themselves or wants to price the Providian customers out and into WA-based cards.

[flynrider]

This is pretty standard behavior for most credit card companies. They're required to advise you before raising the rate, but they usually do so in a little slip of paper stuffed in your bill envelope. The paper will have at least 8 fold-out pages of tiny print, and somewhere in there will be a sentence about the rate going up. If you can wade through the whole thing and understand it, you're a candidate for Harvard Law.

The main problem with borrowing money using a credit card is that the card agreements used by almost all issuers are stacked heavily in their favor. What it boils down to is that they can raise the rate to whatever they feel like charging, whenever they feel like it. You have no say in the matter.

The best bet is to not carry any balance on a card. If you need to borrow money, get a real loan. Consumer loans don't have all of the pitfalls that are built into credit cards (like skyrocketing interest rates). Most of the tricks that the CC companies pull are illegal for consumer loans.

BTW - I've heard the same story you told from holders of MBNA, Citibank and Providian cards.

[CNF2002]

Fortunately we have no credit card debt, so we are not in that situation.

However, now I am hearing that Providian carries a $90 cancellation fee! Incredible.

Plus, I'm currently dealing with a Target Visa that I cancelled a year ago and recently received a notice about (something regarding Automatic payment options)...and discovered the account was still open. Interestingly it no longer showed up on my credit report, which I had recently received a few months ago.

Thats scary...that they could hide an open card, and who knows - maybe add an annual fee, then start racking up interest and late payments for something you never had, then collect years later for a few thousand dollars.

Even without balances on these cards, I do not doubt the companies would deceptively begin adding fees and charges just to get money from you.

[BigChickenStrips]

you might check out:
http://www.daveramsey.com/radio/home/in ... ode=listen

i dont agree with everything he says but mostly he gives pretty good advice in debt management.

[CNF2002]

I've heard him.

Don't get me wrong, I dont have a problem with managing debt (as I said I have no credit card debt)...I have a problem with how credit card companies, particularly Providian, are treating their customers in order to boost profits.

More importantly, those who are in debt often have no choice but to suffer with high interest and credit cards they may never pay off in their lifetime, thus just ending up with bad credit for life. And thanks to Uncle Sam, they can no longer file for bankruptsy either.

Really, whats going to happen to the economy when all the credit card companies are rolling in money, and 80% of the population's credit is ruined.

[Sev]

Just because you have a credit card doesn't mean you need to use it. Pay it off then give it the chop. "fudge" them, and their rates.

[CNF2002]

Cutting up the credit card and forgetting about it is a bad idea. At any time they could add something to your balance, and start racking up the fees if you are not checking their statement each month. (Having open, old unused lines of credit can also hurt your credit score)

You NEED to close any accounts that you no longer intend to use. Cutting up the card and telling them to fudge it may look good in movies but it doesnt work in real life.

And some credit cards make it so frustrating to close your account that its darn near impossible. You have to write to them (dont trust those reps on the phone, they're all liars), requesting specifically to have it closed and that you want the report to reflect that you closed it (not them, or it could also hurt your score) - with a certified letter, so you have a receipt that they received it, and you have to check your credit report after 30 days to make sure they closed it...if not, you need to go through it all over again.

[Kal]

Hey Jules is one of those Customer Relations Reps...

But yes definately write in and request proof of account closure, over here it should be automatic.

Barclaycard started doing something unpleasant to Customers who always pay off their balance a few months ago. They moved payment days forward, so people who blamelessly pay off their balance every month at the same time are suddenly showing interest and late fees...

My parents have worked in Credit for years, and apart from the house we hardly ever had credit. My parents view is that occasionally credit is a necessary evil, but at the end of the day the organisations lending money are only doing it to help themselves.

[zarakand]

Credit is a horrible thing, and very heavily stacked against the consumer. One of the things I've found myself doing for the last year is paying $10 a month to creditkeeper.com, which gives you a monthly credit report, along with sends you an email if there have been any credit inquiries or changes to your credit. $120 a year's a ripoff, since you can technically get the information for free but it's a real hassle without this. All of the info is presented neatly online, and it has fun little "what if" simulator.