Goodbye 30% APR

Angry Rant: The Background Story

(This part of the blog was written about two months ago. It contains adult language and situations. Please proceed to read at your own risk or skip directly to the happy ending in the "Chase FINALLY reduced my APR" section at the bottom of the page.)

You may or may not know about my financial struggle during the last couple years of college. One thing leads to the next and I end up racking up credit card debt. A lot of it. As soon as the balances grew the credit card companies jacked up the rates to 30% or more. Absurd. I had always paid my bills on time, early really. What reason could they possibly have for a 200-300% rate increase???

When I called to figure out why they did this I was ignored, treated with complete disrespect, and even threatened. All they could say is that I was a high risk account. Based on what? My credit score. The increasing balances lowered my credit score then the rate increases made it impossible for me to lower the balances. I like to call it the cycle of indentured servitude. If I were to make minimum payments (all I could afford in college) each month, it would barely be enough to cover finance charges. It would take me years to pay off the cards at that rate. (Yeah, I know. You've heard it before. Hopefully you took it to heart more than I did.)

After graduating college I made another round of calls. I tried to negotiate lower rates, claiming that the increase in my income definitely reduced my risk. And again, I have never missed a payment. I'm not a fucking risk. Even though I make decent money now, I can't afford to pay the balances in full. But I will be able to pay them. Please work with me. I'm trying to get my life on track. Again: repeatedly ignored, denied my right to speak with a supervisor, threatened to have my account closed (which would only hurt my credit score even more) by some condescending asshole that can't get a better job than answering the phones for a slimy credit card company. Jerk.

Finally I was given an address to formally request a rate reduction. This is my only chance. I better make it good. My letter was a well- organized argument for my case that included a photocopy of my pay stub, detailed outline of my monthly budget, and charts showing how much a 5% or 10% rate reduction would help me out in my current situation. I was careful to be polite and non-threatening by emphasizing the fact that I was a loyal customer for over 5 years and was willing to compromise rather than closing any accounts.

Over a month later I receive a letter from Noemi Vega over at Chase bank. There is no indication in the letter that she even read my plea for help. Only two short, computer-generated paragraphs filled with vague statements such as "we value your business" and "your account is not eligible for a change in terms" and "your account currently carries the following benefits and privileges:...24-hour toll-free customer service". Woo-fucking-hoo. I can call your rude, self-righteous peons any time of the day, huh? Well not according to the automated message I get that says to call between 8am and 5pm Eastern Time!!!

You know what, Noemi? Your words say you love me, but your actions tell a different story. You know what that reminds me of? An abusive boyfriend. I'll tell you the same thing I'd tell him: I'm not interested in being involved in a relationship with you. And I'm going to tell my friends the same thing I'd tell the new girlfriend: Get out while you can.

If your situation is anything like mine, you might think, I would if I could. Well after researching my predicament I found a promising solution for debt consolidation. No this isn't spam, I'm only sharing this because I think its a great concept. I found Prosper, a website that offers person to person lending. Basically an ebay for loans. A bunch of people offer to throw in some money to fund you. You set the max interest rate you are willing to pay, they set the min rate they are willing to earn. Supply and demand, you end up getting funded at a low rate. I got a loan that will consolidate my credit cards into one payment and cut the interest rate by more than half and it won't mysteriously change. The best part about it is that real people make money off of me instead of the credit card companies. I no longer use credit so once this loan is paid off, thats it. Chase no longer profits off of me. Lesson learned. Time to use money to make interest, not pay it.

This loan is saving me a lot of money and words can't describe how happy I am to have paid off Chase credit cards. (Enjoy the the risk-free account balance of $0, Noemi.) Please message me if you want details or if you are interested in trying it out - as a borrower or lender. I'd be happy to support you.

(The thing that upsets me most about this whole ordeal is the larger scale. Whats going to happen to the people who make the same mistake as me, but don't have an engineering degree? Those are exactly the people they expect to profit from. They use usurious and oppressive policies to prey upon the poor, unfortunate, and desperate. Fuck that.)

Chase FINALLY reduced my APR

Almost three months after my two Chase cards have been paid in full I am finally making progress in reducing the rates.

I made a round of calls to each credit card today asking for a reduction in my APR. After about 35 minutes on hold and three transfers, I finally got to through to a "rate specialist" that was willing to help me. Instead of coming right out and asking for a rate reduction like I usually do, I asked her to explain to my how customer APRs were determined. I wanted the details of their rate tier system. She avoided answering this question and went on about default rates, credit scores, payment history, credit risk, etc.

I went through my regular spiel about paying on time for the past... 5 years now and maybe they should update my income in their system from when my Chase Freedom card was a Chase Student card. Finally she agreed that I deserved a rate reduction. She reduced my rate from 29.99% to 21.74% which still totally sucks, but I feel like its a victory!

I still plan on paying my full balance each month. I will never pay a finance charge to Chase again, but I will continue to relentlessly request rate reductions. Mainly out of spite, but also in case of an emergency situation that prevents me from paying the balance in full.

(Thank you to Patrick at Cash Money Life for including my post in the making progress edition of the Carnival of Debt Reduction!)