Had I tried to write this post three months ago—when my anger over a credit card company slight reached full boil—it would’ve turned into a train wreck. Now that I’ve had time to cool off and reflect, I’m giving it my best shot, because my story serves as a cautionary tale about using credit wisely. It’s also a tangible sign how much the credit card industry has changed, not necessarily for the better.
The story of this particular card goes back to 1985. It was an era of bad mullet haircuts and frizzy “Flashdance” perms; of cringe-inducing dance routines in John Hughes “Brat Pack” films; a time before widespread Internet use and smartphones. I scored the card as a college student, and over time did my best to live up to the privilege of holding it.
In later years, I got into some bad financial scrapes. I gave up quite a few credit cards after amassing $30,000 in debt. But this card felt special, maybe because it was the first I’d obtained. I paid its bills on time, even when I could afford to do little else in life.
Nearly 30 years is a long time to have a relationship with one creditor, and it felt to me almost like a marriage. I sought always to play by the rules, honor my commitments and do the right thing. Then the marriage hits a rocky spot when your significant other digs their heels in. They start behaving in a no-compromise way that catches you totally off guard. Now you have to decide if the relationship’s worth saving.
Here’s what happened:
I hit a rocky patch in my finances in September; my balance on this card went up due to travel. I made my minimum payment on time, just not in the right amount. I received an email two weeks later informing me that my account was past due by $49.06. That same day, I phoned in a $50 payment to the creditor and apologized for being late.
Within hours, I was informed by the creditor that my credit line of $12,000 was being whacked in half to $6,000. I appealed to the call center, which was no help. I asked to talk to a supervisor to have my credit line restored, and that didn’t help either. Then I took my case up the corporate ladder and tried to explain:
“I’m not a fly-by-night customer,” I told them. “I’ve been with you since 1985. I’ve always paid my bills on time. Look back over the history of this card, and all my credit cards with you. You’d be hard pressed to find a late payment.”
They agreed with me, but told me that the late payment triggered a reexamination of my credit history. Based on that review, my credit line was being cut in half, and that was that.
This made me realize a few things.
First, there are errors on my credit reports that I need to correct, a topic I’ll cover in an upcoming how-to column.
But second—and this is more depressing—the actual show of good faith I put in this company didn’t mean bupkis in the final analysis. To them, a credit score or some metric I couldn’t immediately fix meant more than the actual track record I’d amassed over years and years as a sterling customer.
Looking back, I see why I got angry: It hurt. It wasn’t fair. That’s also why I’ve declined to reveal who the creditor is in this piece; I could mount an all-out media assault and start dropping bombs via social media, Change.org and who knows where else. I’ve decided instead to let my wallet do the talking. I’m leaving this creditor as soon as I pay off my balance.
I haven’t put a single charge on the card since the incident, and while I keep getting form letters from this company saying “We Value Your Feedback!”, I know that it’s pure and utter bullshit. Feedback is only valued when it’s acted upon and changes are made. In this case, I’m not sure what else I can do to argue on my behalf—not when paying my bills in a timely manner for almost 30 years is meaningless.
You might wonder: ‘How does this apply to me?’
Credit has changed a lot since the 1980s—a time when, for example, you could deduct credit card interest on your taxes. (That consumer practice came to an end with the so-called Tax Reform Act of 1986.)
Like so many other things related to money, banking and credit has gotten much more impersonal, and a lot more corporate over the years. That might hardly qualify as news, but to the extent that creditors treat you more like a number, and less like a person, they’re also getting more brazen in terms of what they’ll do to you. And that is news, not that the credit card companies want you to know it.
In October, American Banker reported that consumer advocates asked the Consumer Financial Protection Bureau to take a harder line with credit card issuers. They cited many reasons for this, including issuers that push consumers into add-on products like identity theft protection; fees charged before an account is opened; 0 percent teaser rates; and faulty disclosures of online statements and grace periods.
If the CFPB takes action it will extend the protections consumers earned with the Credit Card Accountability Responsibility and Disclosure Act of 2009. Thanks to that legislation, you can look at your credit card bill and see how much of a monthly payment it will take to pay off your card balance in exactly three years.
Yet there is no legislation that can compel a credit card company to treat you with the respect, dignity and fairness you’ve earned.
As a balance sheet question, a $6,000 credit line cut makes zero impact on my bottom line, especially since my goal for 2014 is to pay off every last dime of my unsecured credit lines.
I’m leaving this card behind more on principle. If a dear friend makes a mistake—and an innocent one at that—I’m compelled by the laws of decency to look at their track record with me. If I can see they’ve spent years and years doing the right thing, the Golden Rule applies: I’ll treat them the way I’d expect to be treated, and give them a pass.
The facts here are simple. An on-time payment was a few dollars short. The same day I was notified of my mistake, I made amends and corrected it. For this good behavior, and for years of customer loyalty, my credit line was cut in half … with no recourse for appeal … no leniency whatsoever.
Hmmm. They repaid 29 years of unwavering loyalty by cutting my credit line in half. It’s time to cut that credit card in half.
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