Credit Card Games and Victimhood

From a recent Dollar Stretcher “Outrage”: My daughter has held a Chase Master Card for three or four years, since she was a college student, when she opened the account at a 19.8% interest rate, presumably fixed. She worked at only part-time jobs and was a full-time student at the time of opening the account. She graduated last spring, got a full-time job, new car loan, and paid three or four times the minimum payment on her credit cards for several months. In December last year, she purchased a laptop computer which she put on the card, and the next month she paid the entire amount for the computer plus more than double her minimum payment. At that time, her interest rate was increased to 26.99%. She was not aware of it until recently, much to her disappointment. She called the company today and was told about it and that they had sent her a letter stating this. Chase left this punitive rate on until her call, despite the conditions of the punitive rate--a large purchase--having been paid off. She never made a late payment nor exceeded her credit limit. She was simply penalized for using her allowable credit line.

Today when she requested a lower rate she was given 9.99% fixed. For months they profited over her lack of vigilance, to the tune of 17% interest! And it shows that calling a creditor can indeed result in a lower rate. Her balance is now low enough that she plans to pay it off, and then use it only for purchases she will pay off the following month in order not to incur finance charges. She won't close the account because she needs the longevity of the account on her credit history. Always, let the buyer beware!"

I have to ask the following questions (as will a lot of readers, I’m sure):

• Why didn’t your daughter search for a better rate right from the get-go?

• Why didn’t she nail down the terms of her agreement, whether it was fixed or variable?

• Why didn’t she make a better effort to pay off the card before she went headlong into a car loan and continued charges to her account?

• How could a person who gets monthly statements not be aware of a rate change?

• How come it took her so long to do something about the exorbitant interest rate they charged her in the end?

• Why did she decide to keep this card after finding out about how the company is profiting from her ignorance?

• Why are YOU writing about this and not her?

It’s time to let go, Mom. She’s all grown up and graduated, and now it’s time to let her make her own mistakes. The rest of us have known for years about shopping for credit card rates, taking charge of our own credit, and switching when the going gets ugly with our current credit card company.

Let this be her first lesson about money and credit. To prevent her from making any more bone-headed moves in the future, lead her to the waters of Bankrate.com and The Dollar Stretcher. After that, lead her to the public library, where she can parlay herself and her degree into a successful life with a satisfying career, a fabulous portfolio, and excellent credit. She will never again be a victim of someone else’s profit motive or her own ignorance.