July 21, 2005

the wonders of credit

Since deciding to purchase my MINI, I've become a sort of credit expert. I've had some woes in the past, stemming from both uninsured emergency medical issues and, of course, from youthful fiscal irresponsibility. But over the last few years, I've worked very hard to take my credit from poor to excellent.

Apart from getting an excellent APR on my slightly-more-expensive-than-I-would-have-liked car, I've had more credit offers start piling up. At the end of every mail-day, I come home to a stack of offers that I quickly tear up and dispose of.

I have a few credit cards right now open, some are new, some I've had for about five years. The oldest card, from Capital One, has a measley $300 available credit and a ridiculous 19.8% APR.... Oh, and that $39 annual membership fee. Yikes. It was worth it when I got it. My credit was pretty much kaput and I needed to do something to re-establish myself... and Capital One was there.

This is the problem - through the years, Capital One has NOT ONCE raised my credit limit. While all my other cards' limits have increased, some ten-fold, the Capital One card has remained at $300. For that reason I never use that card.

This morning I checked my online statement, and the $39 annual membership fee had charged to my account. *Sigh*. Another year, another wasted $39. But this time I'm a bit unsettled about the whole affair... "Why the hell am I paying nearly $40 a year to let a piece of unusable plastic take up space in my wallet?" I ask myself.

From all my studies into credit worthiness and getting my FICO scores up, I realize that having long account histories is important - but on a $300 card? Puh-LEEZE! I called the toll-free number on the back of my card, prepared to kick that card to the curb.

Now, I've played this game before. If a card wasn't working out for me, for instance if I felt the APR was too high, I'd just call the number, voice my concern and/or disdain, and, TA DA!, the card company would lower or raise, to my tastes. It's really quite a sweet deal. People, those credit card companies want to keep your business - if you want a lower APR, call them up and ask!

So when I maneuvered through the automated service, requesting they close my account, I knew they'd try to get me to stick around.

Automated Voice: "If you are closing your account because you are unhappy with your APR, please press '1'."

Me: Sternly presses '1'.

Automated Voice: "Congratulations, because you are a Capital One customer with Preferred Cardholder status, you qualify for a lower Annual Percentage Rate of... " (wait for it!) "... 17.9%! To accept this offer, press '1', to decline, press '2'."

Me: Unimpressedly presses '2'.

I'm then transferred to an actual living, breathing person - someone who sounds very excited about life. I explain to her that I want to close my account and why, and she rattles off the company-line about why keeping my Capital One card is a good idea - including a (probably scripted) "personal experience" about how utilizing cards with LOW available credit lines is your best bet when buying online - so that if your card number is scooped up and fraudulently used, they can only get so much off of it (including, of course, the important info that Capital One, like most banks nowadays, offers all customers no liability on fraudulent charges)...

"Not good enough", I think to myself. And then she gets to the good part. Because of my "Preferred Cardholder Status", she is able to knock off my annual membership fee - and reverse the charge I saw this month. Well, that's a start. And then I ask her about raising the credit limit, or lowering the interest rate. No dice. "At this time, I do not have the capability of offering you that, but check your statements, as Capital One periodically reviews accounts throughout the year for account limit raises".

I then remark to her about how, in the past FIVE YEARS, Capital One has either reviewed my account and decided to not offer me raises, or has not reviewed the account at all. And that I'm reticent to continue the account. And that I will not be using a card with such a high APR. So it's their loss. Full stop.

But I'll go ahead and keep it. It will help keep my credit score up. And it's not like it's costing me anything. Suze Orman would be so proud!

posted by julie at July 21, 2005 01:01 PM