Rip Off Alert: Check Your Credit Card Annual % Rates


Smart consumers read their credit card statements each month, scanning for errors. Typically, one looks for mistakes in purchases and assured that there haven’t been any unauthorized charges, files it away (or closes the on-line banking window, as the case may be.) Yet right now, the company most likely to steal from you is your credit card company, and it’s very easy to not notice the hidden charges!

I got ripped off this week. As I was checking when a balloon payment is due for a major home repair I charged to a credit card awhile back, I decided to make sure all was well with my annual percentage rates (APR) on my business MasterCard while I was at it. Typically, I pay off my balance each month, but started carrying a balance this year. I wasn’t expecting anything unusual, as I had an interest rate under 14%, a near-perfect FICO score, I always pay on time, and besides–I always had such good experiences with this particular credit card company (Advanta.)

Rarely do I read my paper statements, as I do most everything on-line. But have you ever tried to double-check your interest rates on-line? In my experience, most banks don’t post it in your “my account” section. So after clicking every possible link, I gave up and fished through my files for a recent paper statement. Hidden on page 3, was my current APR that had been raised to 38.9%!

Yes, you read that correctly. The statement said they were charging me 38.9% interest.

Immediately, I called them and was dispatched to a nice woman in India who verified that indeed, that was my current rate. “When did it go up?” I asked. “September,” she replied. Shocked that I’d been paying that rate for 3 billing cycles now, but hadn’t noticed how much more interest I was paying, I proceeded to ask her how they justified such an outrageous unannounced increase. After all, I always pay on time and I’m not even close to reaching my credit limit. This sounds like a mistake. It makes no sense.

Her lengthy reply was entirely scripted. First, she acknowledged how much they appreciated my timely payments and patronage, but that they are reviewing ALL of their customers right now. Anyone that is starting to carry a balance or that has a change in spending patterns is being deemed a candidate for default, and they have raised the APR’s. I could tell by her voice that she is well versed in this particular script. There was no point in shooting the messenger.

Next, I asked to speak to someone that could help me renegotiate my rate. Without transferring me to another agent, she said, “I’ll see if I can help you. Please hold.” After a couple minutes, she came back with a new script and said, “We are prepared to offer you a rate of 18.9%.” Can you believe it? So here I was, stymied that I was having to negotiate up 5% from my previous APR. Outrageous!

I am now thoroughly angry at the Advanta credit card company that I used to think had the best customer service of all. From a business consulting standpoint, I find their strategy shocking too. Treating good customers as if they are bad, and ripping them off before they have a chance to default seems like it would inspire defaults. Madness!

Please, please, please don’t let these companies get away with it! Check your paper statements for your current APR today. In fact, perhaps this is the time to get off of on-line banking altogether, so that you’ll be forced to open the envelope and scan for sneaky surprises that might be lurking inside. Watch your back, even if you have a perfect credit history!

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About the Author

Jaya Savannah - Chief Inspiration Officer. Strategy Coach for Holistic Businesses. Trainer, speaker, and writer. Spiritually aware, yet street smart. Elephant lover.

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