Edited at end of diary.
I consider myself an average consumer. I have more credit cards than I probably should, but pay them all on time. I was caught totally off guard today when I opened a letter regarding my J.C. Penney credit card. According to the statement there are big changes taking place:
- They're raising the interest rate on my current balance & future payments to 22.85%.
- They're reducing my payment cycle to 23 days.
- They're increasing the delinquency rate to 26.99%.
- If an account's finance charge is less than $1.00, they're increasing it to $1.00.
- Interest will now be compounded on a daily basis, rather than monthly.
- They may contact you using any number you've ever provided them and that includes being contacted by a pre-recorded voice, even if you are charged for the call under your phone plan.
There are also changes regarding arbitration and governing law provision, a returned check fee & promotions, and a few others, but after reading them numerous times, I still can't make heads or tails out of them.
1 thing I knew for sure, these changes weren't going to benefit consumers one bit. I decided to call the number on this dreaded notice. Reaching a real human was easier than it used to be and I was soon told that the increased interest rate would be applied to the balance of purchases I'd previously made, for some reason I thought it would only apply to new purchases. I asked to speak to a supervisor, another surprise, a supervisor was readily available. I got the feeling that they aren't getting many calls and/or the calls they are getting are from unhappy customers.
I told the supervisor they're punishing customers that are paying their bills & discouraging consumers from buying more... just the opposite of what's needed to stimulate our economy. He was a really nice guy & told me about a branch of their company that would be helpful. He transferred me to their "hardship" department. This is where things started to make an interesting turnabout.
It took many transfers, getting CSRs overseas (I refuse to speak with CSRs overseas... I figure if we all do that they'll have to bring jobs BACK to the U.S.A.) and asking them to transfer me to a state-side CSR. Alas, a CSR in the U.S. finally gave me the direct number to the Hardship Dept. A man greeted me with, "GE Financial" & asked if I was calling about my JC Penney card or my Mervyn's card. Oh, I thought, this company handles both of these accounts? I told him JCP. I explained my current situation & the changes proposed would cause my account to go delinquent, adding more charges and I'd forever be in Interest Hell. The kind man told me about Plan C. Plan C is a 40 month plan that makes my monthly payment go from $45 to $24 and the interest rate? There is none. ZERO interest.
After making arrangements for that credit card we discussed my Mervyn's card and made the same payment plan: 1/2 the monthly payment and zero interest. My Mervyn's account was already closed as they went out of business, and now my JCP account is closed, too. I asked how it would affect my credit & he said that it won't. The Hardship Dept. is also known as "Soft Collections," Soft Collections is for accounts that are not delinquent, but can no longer afford the high payment & increased interest rates.
I plan on paying all of my debt, but I don't believe consumers should be penalized for paying our bills on time, and if we're late, that shouldn't be a financial death sentence. I'm current on all of my credit cards, but tomorrow I'm calling on the others to try to make similar payment arrangements.
These are hard times and this is the wrong time for corporations to milk us for all they can get. All Mervyn's accounts are closed anyways, why pay interest if you don't have to? I'm writing this because maybe it will help someone else.
If you have any credit cards owned by GE Financial, the direct number for the Hardship Dept. is 1-800-257-1574 and don't forget, it's Plan C.
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Today, March 17th, I called HBSC which handles 2 of my credit cards; I closed both cards more than 2 years ago. Carol, the CSR, told me because my account is closed my interest rate (26.99%) cannot be lowered, only RAISED. (I thought this was illegal??) I was also told that since I'm not late on my payments, never have been, no payment arrangements can be made. I HAVE TO BECOME DELINQUENT IN PAYMENTS FOR THEM TO NEGOTIATE WITH ME. That's stupid. Right?