I’ve been an AT&T Universal Card customer since 2001, starting out with a small classic card and eventually upgrading my way to a Platinum Rewards Mastercard. When I went through my financial turnaround a while back I cut up all but two cards with the idea that when my debt was eliminated I would run utilities through one credit card for convenience (and to earn rewards), and travel/emergencies through another credit card.
AT&T Universal Card survived the plastectomy because I liked their rewards program, it was one of my older accounts, and because I had a very low variable rate (which had floated down to around 6% thanks to rate reductions). I consolidated my remaining debt to this card because of the low rate and was making monthly payments to reduce the balance.
To my surprise, I received my bill last month and noticed that my stated annual percentage rate (APR) was 24.99%. What?! My rate went from 6.3% to 24.99% in one month? I immediately wondered if I had forgotten to pay the bill. Nope, payment cleared several days ahead of the due date. I haven’t applied for any new credit, my only other credit card is in good standing, and a recent check of my FICO yielded an above-average score. Convinced this was some type of mistake, I called customer service for resolution. I would not have believed the explanation received had I not heard it myself.
“It’s the Economy, Stupid”
Yes, that is essentially the answer I received. The customer no-service representative answering my call explained that my account had gone through a “change in terms.” Apparently, I was notified of these changes back in November, but because I had failed to “opt out” the issuer saw it fit to increase my interest rate by 18 percentage points.
I confessed to the representative that “like most customers I don’t read every single statement message, advertisement and piece of credit protection insurance garbage you include in my monthly bill,” but that I did not remember seeing anything indicating my rate would be increased this drastically. The representative indicated that “opting out” of the change in terms would have meant my account would be closed to future charging and my rate would have remained the same. Huh? And the reason for such a brainless move? “The tough economic conditions.” No joke – that was the explanation. I asked to speak to a supervisor, and eventually the supervisor’s boss, and they all repeated the same canned response.
Apparently, AT&T Universal Card thinks it is a good idea to chase away customers with good credit, pay on time, occasionally carry a balance and have been customers for eight years. I could cite statistics showing the increased costs to acquire new customers, or the negative effects of chasing away loyal, profitable customers in a recession, but you don’t have to have an MBA to know this is just plain stupid. Then again, what would you expect from a credit card issuer?
To their credit, AT&T Universal Card was nice enough to reduce my annual percentage rate back to where it was prior to the change in terms, but only if I would agree to close the account. That wasn’t a hard sell. I was closing it either way, because I am tired of doing business with people who do not appreciate their customers. After all, there are too many people out there doing it right – too many options for better service, a better product and probably even better terms. I’ll just keep my one card for now, and maybe one day I’ll even let that one go. I’m officially tired of playing games with credit card issuers.