May 23, 2004  ·  Lessig

I’ve been begging my wife to let me close down all but one or two of our credit card accounts. The hassle of dealing each month with many different accounts is more than these fingers can handle. My latest victory was to be Chase. She has had a Chase account for ever. But I finally convinced her there was no real benefit to keeping that account open.

So she called Chase and asked that they close the account. Chase was not happy. “What can we do to keep you as a customer,” they asked. I was standing next to her when they asked her, so she asked me. I pointed to an advertisement we had just received from AT&T Universal card, promising no fees, zero interest, no payment for a year for balance transfers. She told the Chase representative we’d keep the card open if they gave us the same terms. The representative said she’d have to check, and said she’d call back later. She did. Chase offered the same terms as AT&T, and based upon that offer, we transferred a substantial chunk of airplane ticket debt to Chase. (The worse thing about traveling to speak is carrying the costs of the airplane tickets till reimbursed. At one point last year, I was carrying more receivables in conference expenses than my wife earns in a year.)

I remember thinking when this all happened how amazing it was that such a significant transaction could happen based only upon the word of a voice at the other end of the phone promising she spoke for Chase. How advanced the world had become! I thought for a second to ask that they send the offer in writing, but it seemed so 19th century. And anyway, it was Chase! And they were being so cyber! Who was I to spoil the fun?

This month we received our statement. As promised, zero interest, and zero fees for the transfer. But contrary to the promise, Chase was demanding a minimum monthly payment. When we called to say that this was not what was agreed to, we were instantly shipped back to the 19th century: “Do you have the offer in writing” the agent at the other end asked?

No, we didn’t. And after our payment for the full balance transfer is cleared, neither will we have a Chase card anymore either.

  • http://www.susheeldaswani.com Susheel

    Typical. Another story: a friend of mine at work was fussing with Sprint about some cell phone issue or other. She must have heard the ‘This call may be recorded for quality assurance’ drone 15+ times. At one point she had a very unfortunate exchange with a rude customer service person who hung up on her. She called back to compain to a manager, and, typically, the manager said ‘We have no record of that conversation.’ :) They should record ALL conversations and let customers delete them if they are satisfied.

  • James Renken

    I run a small company, and a few years ago, we had an incredible volume of orders using stolen credit cards. I ended up calling card issuers to verify orders and/or alert them to fraud, which gave me some interesting impressions of each bank.

    Citibank Visa and Discover were both extremely gracious and helpful (Citibank MasterCard less so); Equifax and most other debit card clearinghouses weren’t bad, but had no idea what to do; and American Express, First Union, and AT&T Universal Card were all downright rude. The latter three all refused to alert the customer, flag the account, or verify any information. I even got hung up on several times by different representatives at AmEx.

    The wonders of modern customer service…

  • Morphy

    Welcome to the credit card debt game. Played that one in partnership with my S.O. for years. You can win it, or at least come up even, but as you note it takes time and attention to detail and not a little chutzpah. The logic seems to be that if you read the fine print and then you threaten them with moving to another CC offering you better terms, they’ll kinda-sorta capitulate, for sorta a little while.

    Use American Express, cut up most of the other cards, zap the debt and pay your bills with bank checks or cash as often as possible. It’s good advice for both professors and students. Otherwise you wind up playing this game, and you probably have better things to be doing with your life.

    It’s like the ATM card fee game. I open a couple of checking accounts at different banks, with modest balances, just so that if I have to use an ATM I don’t pay the fee as often as possible, and I’m earning interest. So if you need $20 bucks unexpectedly, you don’t wind up tithing back the modest interest you’re earning.

  • Thien

    As a college student I receive, or at least used to, lots of credit card offers. My favorite thing to do is try to bargain with them. Well, I don’t know if you could actually call it bargaining as I basically ask for $1000 up front and a new car. Apparently they can’t offer this.

  • Charodon

    AT&T Universal may be trying to turn things around, although it’s a work in progress. They seem to have revamped their billing and CSR operations, with at least some (but not all) CSRs based in India. As a result, they didn’t bill me for my calling card calls for over 6 months — and finally put 2 lump sums on my bill with no calling data. When I called to complain, I got transfered from India, to someone in Indiana who tried to sell me long distance service, to a competent AT&T residential rep who had no idea why I was there, back to India, and finally disconnected. Then I sent a LETTER to complain about THAT, and I got a very apologetic voicemail and full credit for the amount ($200+). Lesson: escalate to letters immediately if calling does not work the first time.

  • Anon

    It’s a bad idea with respect to your credit score to close your credit cards. Simply move all balances off the ones you don’t want, and then throw them in a drawer.

  • http://www.penguinsix.com Andrew Leyden

    How about air miles? If you are charging your wife’s salary per year, that’s got to be some free trips or hotel vacation packages. Wonder if you are getting that from Chase or maybe you should move to your airline’s card.

  • Alan McCann

    I would think you would be able to demand that those asking you to speak purchase the airplane tickets. It costs a bit in terms of the hassle of having someone booking for you but carrying that amount of receivables is a challenge for anyone.

    The air miles angle is a good thought too.

  • Joseph Pietro Riolo

    Whoa!

    It is a mistake to close your account. To add to what Anon
    said, your credit score will decrease for two reasons: 1) The
    longer you have credit history with credit cards, the better
    your credit score will be. If you close a credit card that
    you use for 20 years, you lose 20 years of credit history
    for that credit card. (They look at the opening date to
    decide how long your credit card is.)

    2) The more credit cards you have, the lower your
    percentage for debt is. If you close a credit card, the
    percentage for your debts increases which lowers
    the credit score.

    And, remember to check your credit reports annually. :-)

    Joseph Pietro Riolo
    <riolo@voicenet.com>

    Public domain notice: I put all of my expressions
    in this comment in the public domain.

  • Anonymous

    From what I’ve heard, having too many open credit lines can
    hurt a credit score (though this might not start to bite
    significantly until you have more than, say, 5 credit cards.)
    The concern is that they could be used to run up lots of debt fast.

    Having long-established lines can help, though, even if you
    don’t use them, so it may make sense to keep around a 20-year-old
    card (and not use it) along with the 1 or 2 you actually use
    regularly, if those regular-use cards are new.

    That said, it seems that if you have a long history of consistently
    paying on time, have a steady income,
    and aren’t overextended, that seems to be sufficient
    to be considered prime credit for most purposes, and it may be not
    worth it to go out of your way to “optimize”. (When we first applied for
    a mortage, we were told that our score was one of the highest they’d
    seen, and we didn’t do anything special to “optimize” it. All we had
    were a couple of long-standing credit cards that we always paid
    on time, almost always in full; no other loans before the mortgage.)

  • Tzfardeah

    Ah, the beauty of “modern” technology and the big brother society, paticularly in times of transition: big brother (whichever part of the dominant discourse it is at the time) gets to decide which set of rules count and when.

  • Colin Brown

    I might have missed the point. Why would you object to Chase asking for a minimum payment when you were getting zero interest and zero transaction fees.

    Wow – now you have cancelled your credit card in protest!

    Are you a consumer from hell, or am I missing something?

  • Anonymous

    Hey Larry.. You shouldnt be too hard on Chase.. Asking for a monthly minimum payment is standard in the credit card industry – in fact I am 100% positive the fineprint on the AT&T universal offer that you asked Chase to match had the same deal. I have been dealing with these 0% offers for many years, and I guarantee chase isnt trying to screw you. Oh, and I would recommend staying as far from AT&T universal as you could; I can only tell you that both myself and about 4 friends have had nothing but bad experiences with AT&T universal.

  • Jozef

    I tried to get a credit card from Chase once. I’m strongly against getting into any kind of debt, but recently I learned that a person needs to have a credit history in this country to survive. Being without one, I opted for a secured credit card. Here’s how the entire thing went:

    1. I sent in the application. I’ve had a premium account (min. balance of $10,000) with Chase for 2 years at that point.
    2. Two weeks later I get back a request to send a copy of my driver’s license; I do so the same day.
    3. Two weeks later I get a request to send a copy of my social security card; I do so the same day.
    4. Two weeks later I get a rejection and my check back (for a secured CC you need to send the money in advance).
    5. A week later I get accepted, but the letter states that because I didn’t send any money in advance I cannot get a card, and I should apply again.

    The next day I closed my Chase account. I wouldn’t want to trust my money to a bank that’s got such a mess in their paperwork.

  • http://www.cs.rochester.edu/~bukys/ Liudvikas Bukys

    Unless you’re going to give up on Chase altogether, you should go for even better terms – Chase “CashBuilder”: 1% rebate (maybe higher if you run a balance, which I don’t), in cash once/year (not funny money “points” or minutes or miles). Maybe that would make up for the aggravation of the forgotten/unauthorized unfulfilled verbal promise.

  • Morphy

    Lots of good comments here on how to stay even with the game, go it one better, at least tread water, etc., except one I think. The one from the guy about not canceling your credit cards because you might be afraid of damaging your credit rating. Sounds like a protection racket to me…and in fact, that’s kind of what it is. I have a parent who helped design the credit card transaction system for Chase Manhattan Bank waaaaaaaaaaaaaaaaay back in the woebegone past. Credit cards were seen as a luxury back then, but today people treat them as common currency, and a lot of the time because of the delayed impact of the payments, they completely screw themselves. And the credit card companies aren’t doing anything evil — they’re just keeping pace with reality.

    Credit cards are wonderful things, but I’m not all that worried about Professor Lessig’s credit rating or his inability to pay the bill. I’m sure the former is just fine and the latter could be managed with a few very pedestrian sacrifices.

  • Chris

    When the prefix the call with a recorded message saying “this call may be recorded for quality assurance purposes” …

    …doesn’t that mean that YOU could record it?

    It might not be in writing, but it would surely make it hard to alter the terms of the deal later.

  • Ryan

    Yes, you can record the call, but depending on the states that you and the Service Rep are in, you might have to notify the Rep that you are recording.

  • Kevin

    The FICO score is pure marketing genius. Fair Iaasic develops an black box algorithm that has a high correlation with defaults. They sell it for $4 a pop to the credit bureaus (who in turn sell it to nearly every mortage and credit card issueer). Since the algorithm is secret, it’s difficult to develop a competing algorithm and prove that it is better without a significant number of credit reports and scores. Who has enough credit reports and scores? The credit bureaus, but they are adding another $5 to the cost, so it is not in their interest to anger Fair Iaasic.

    Interestingly, my statistician friend at a card issuer, has developed a model that is better for their customers (which may be a different demographic) than the FICO score – but they also are not in the credit score business.

    Using the FICO score for setting insurance rates or prescreening out poor people is yet another topic…

  • Anonymous

    I got mugged in Italy on November 2, 1989 on a train. I contacted both Amex (actually went to their office in Milan) and Citibank Visa within hours to cancel my account. Nevertheless the thief(s) charged about $1000 each to both cards. When I got my next Amex bill all it took was a quick phone call and they cancelled the charge (they also helped greatly while in Milan to get a new passport and new Amex traveler’s checks).

    Citibank, on the other hand, refused to listen to reason and kept billing me for the stolen card charge. They finally had the audacity to send me a copy of the charge slip with a date of “2/11/89″ with the thief’s forgery of my signature, and insisted I had charged this several months earlier. Apparently nobody at Citibank is aware of Europe’s reversal of the month and date. I finally gave up until collections tracked me down. When they called I finally was able to talk some sense into an intelligent person and they fixed it (although it messed up my credit for a while).

  • April

    I was able to close my Chase account. BUT because I had sent in two supplementary payments that unfortunately bounced, Chase instead cancelled my account ahead of me. Notwithstanding the payments were additional to my regular payments, Chase claimed I was delinquent. Turns out that their (Chase’s) rule of thumb is “two bounced check payments [they were online payments] and we close your account.” Beware!

    Isn’t there anything I can do to resolve this in a better way, since now it is/will be on record that they closed my account and it will be on my credit report. The only thing that the service representative could offer was for me to fax my bank record to them (Chase) that proved the checks were not returned.

  • April

    I was able to close my Chase account. BUT because I had sent in two supplementary payments that unfortunately bounced, Chase instead cancelled my account ahead of me. Notwithstanding the payments were additional to my regular payments, Chase claimed I was delinquent. Turns out that their (Chase’s) rule of thumb is “two bounced check payments [they were online payments] and we close your account.” Beware!

    Isn’t there anything I can do to resolve this in a better way, since now it is/will be on record that they closed my account and it will be on my credit report. The only thing that the service representative could offer was for me to fax my bank record to them (Chase) that proved the checks were not returned.

  • http://redjar.org/jared/blog/archives/2005/10/27/chase-sucks/ Anti Chase – Hana

    I finally canceled my 2 checking accounts with Chase. I had these account for 11 years. Chase Bank sucks! If I tell you different stories how they treated me, it would take me 50 pages. In short I took an action and said : NO MORE”.

    There is no reason for customers and consumers to keep having business with Bank that don’t value business they have with them!

    It took me awhile to detach but this was the best ethical decision I have made this month!

    I simply don’t want to have business with people who clearly disvalue me. It’s not the only bank in the world.

    Also none of my children ( potential customers ) will have business with Chase. If evreyone who is unhappy opens accounts with good bank, maybe bad bank like Chase would not be open for much longer.

    Because having business with Bank that clearly don’t value customers is like bad relationship with a man or woman, in which you are clearly 1) financially used and taken advantage off 2) disvalued and 3) not worth of effort.

    This is your money, not theirs, you should be in charge of how things are taking place, they should follow rules and regulations, and if they don’t – leave them!!!!!!

    Don’t wait, just do it you can’t possibly make mistake with a bank who don’t value you.

    Sincerelly,
    Anti Chase – Hana

  • Barb

    Dear Hana,

    I’m with you! Chase Sucks. period. Their staff lacks people skills, their managers are rude. And the only thing they go out of their way to do for people is charge them higher interest rates, late fees, etc. EVEN WHEN THE ERROR IS THEIR FAULT!!! Their terrible. I’ve reported them to several agencies already and I’m not stopping. Discover on the other hand is the complete opposite. I would recommend them to anyone! They treat your account like it’s their own, Great staff, always helpful, never rushes you off the phone, takes alot of time to explain and help. Great managers also.

    Barb