A Crazy Tale of Two Credit Card Companies..... [View All]

[radfringe]

A couple of days ago, my partner received her credit card bill - they raised the rates with no notice. Being the "pit bull" (sans lipstick) that she is, she called them up and got the rates lowered to their previous level.

I observed her "outrage" over the rate increase, then while on hold - her muttering and swearing about credit card companies screwing everyone, and concluding with more ranting about corporate execs getting bonuses. The reason given for the rate increase had nothing to do with the timeliness of payments - she hasn't missed a payment, and usually pays double the minimum due - the reason was "the economy is bad".

This got me to thinking - yes the economy is bad, big and small businesses are hurting just as much as individuals. However, how does raising the rate to a point where a person can't afford to pay the bill benefit the economy?

So here's the crazy idea - it's a long shot, and probably won't ever happen...but I'll throw it out here anyways.

Let's say you have two credit cards: You receive a letter from Card-A advising you of a rate increase, a second letter arrives from Card-B which says the economy is bad, and in the spirit of working together and having to make sacrifices Card-B is LOWERING your rate on the current balance until it's paid off.

Flash forward to when you are on better economic footing - would you be more likely to use Card-A who raised your rates, or Card-B which showed some compassion, understanding of economic situation and lowered your rate?

If a friend/relative asked for a credit card recommendation - which would you recommend?

The "goodwill" effort showed by Card-B may cost the company in the short run, but it would pay-off in the long run.

I seriously doubt a credit card company would voluntarily lower their rates, if they were smart they would. However, they are not smart - just greedy, and greed is their public image.