WAMU Credit Card WARNING......

By
Mortgage and Lending with Your IRA guy!

I just recently received my WAMU (formerly Providian) credit card statement in the mail with a special surprise inside!

"Important Notice of Change"

Effective May 1st, 2008

  • New APR Prime + 23.99% (which, as of today is 5.25% + 23.99% or 29.24%)
  • returned check fee $39

I, of course, called and the customer service person told me I had 2 options, to accept the new % or I could close my account and lock in the rate I currently have.

Problem I see with that is the effect closing this account will have on credit scores!

Closing a credit line-and one with an existing balance.....twice as bad.  She told me "its OK, they report it as a consumer closed account" -just for the record, that has no bearing on your credit score!-but closing an account certainly does)

Credit card info on your credit scores take into account the following ratios: # of lines with balances and overall credit limit to credit balances.

Let's use this as an example:

I have 3 credit cards each with a $10k credit limit and 2 have a $5k balance on each.

If I close one but it still has a balance, then my credit bureau sees and scores on the following:

2 credit cards open, 2 being used-ratio 100%

total credit limit available now only $20k, total credit used $10k ratio 50%

So what do you do if you can't pay off the card right now?  Go with the higher rate or close the account and roll the dice on what it will do to your credit score-Also, the older the card is, the more important it is to your credit scoring.

 (Oh, did I mention that they also last year decreased my credit limit from $20k-$13k because they can........and I have a 700 credit score and have never been late on a payment) 

This banking liquidity issue starting from the real estate collapse has moved into so many different areas of our economy and it is having a rippling effect into other areas.

If you have a WAMU credit card-or any card that is changing your terms on you, before you lock in your current rate, consider what it may mean to your credit score-look at the big picture and make sure the person you are talking to when it comes to your credit actually knows what they are talking about!

 It's a tough market-but it's more than just homes going into foreclosure.......

Michael

 

 

Comments (10)

Linda Lipscomb
Linda Lipscomb RE/MAX Lexington Henderson County TN - Lexington, TN
731-695-1118, Lexington TN Homes

Michael,

 Thanks for the heads up on this.  The ripple effect has to start and affect so many areas of our lives.  Maybe I should listen to Dave Ramsey!!

Linda Lipscomb, Homes for Sale in Lexington, TN.

Mar 20, 2008 08:06 AM
Eugene Jones
Weichert Realtors - Somerville, NJ
Thanks for the heads up. I need to check my wamu statement.
Mar 20, 2008 08:07 AM
Brian Kreick
Willinger Real Estate - Wenatchee, WA
Interesting how that works, thanks for letting us know.
Mar 20, 2008 04:48 PM
Megan McGonigal
Integrity Real Estate - Northeast, MD
CRP - Cecil County, MD & Harford County, MD Real Estate
It is ridiulous what the credit card companies do to us consumers and get away with.
Mar 20, 2008 04:53 PM
Richard Sweum
1st Security Bank - Everett, WA
WAMU is in deep doo doo and this has been one of their only profitable channels...time to switch.  Airline miles are a rip-off anyway.  Get out while you can!
Mar 21, 2008 04:19 AM
D. Bass
Ask The Underwriter - Atlanta, GA
Blog: Ask The Underwriter
ARGGGG! What next (or maybe I shouldn't ask!).  Thanks for the heads up. 
Mar 21, 2008 05:12 AM
Anonymous
Betty

I GOT A STATEMENT BUT MINE DIDN'T SAY THAT. DID YOUR STATEMENT SAY RETURNED CHECK FEE $39.00 OR WAS THAT AN EXAMPLE?THEY WAIT UNTIL YOUR CARD IS CLOSE TO THE LIMIT BUT THEY FORGET TO LET YOU KNOW THAT THEY LOWERED TO WITHIN  $300 OF YOUR LIMIT HOPING YOU HAVE SOME PURCHASES THAT HAVE NOT COME IN YET THIS WAY YOU GET A OVERLIMIT FEE AND AND RETURNED CHECK FEE. THEY ARE ARE SCUM .

Oct 06, 2008 11:15 AM
#7
Michael Schindler
Your IRA guy! - Galesville, WI

Betty:

I'm unclear on the $39 returned check fee that you talk about?  Why would anyone get a returned check fee unless they bounced their payment check?

I don't feel they are scum-after all, they extended to you and me, an offer to use their money-sure with interest but they didn't have to do that at all.  Honestly, Credit is a priviledge not a right.......

WAMU got caught up-like ALL other banks, in a credit crunch.  I'm sure if the crunch didn't happen that they would gladly still borrow us money at an interest rate quite a bit higher than a CD. 

If they lowered your limit and you had charges out there, perhaps if you call and explain that, they would understand and waive the overlimit fee?  I just talked to them earlier today and the lady I spoke with was very nice (I'm sure they don't get to talk to people who are nice to them very often so I recommend using that approach).

Also, if you have a returned check fee, I'd make a call ASAP about it because you sure don't want to hurt your credit.

 

 

Oct 06, 2008 11:35 AM
Anonymous
Betty

I WAS  TALKING ABOUT ANOTHER RESPONSE AND  IT WAS SHOWING THAT ON HIS STATEMENT NOT MINE. I HAVE NEVER BEEN LATE OR MISSED A PAYMENT AND ALWAYS PAID MORE THAN THE MINIMUM I PAID ONLINE AND SCHEDULED  3 PAYMENTS AHEAD AND MADE SURE I WAS  PAYING OVER THE MINIMUM. THE ONLY WAY I COULD FIND MY INTEREST  RATE WAS TO CALL WHEN I SENT A MESSAGE I ALWAYS WAS TOLD TO CALL. I WAS NEVER INFORMED  THEY HAD RAISED MY RATE AND IT SEEMED LIKEMY BALANCE WAS HARDLY GOING DOWN AT ALL. I AM 64 AND HAVE NOT HAD HEALTH INSURANCE FOR THE LAST 2 YEARS AND STILL HAVE A YEAR TO GO UNTIL I GET MEDICARE.I CALLED THEM SO MANY TIMES TO SEE IF THEY WOULD LOWER MY RATE AND THEY SAID NOT NOW THERE WAS NOTHING FOR ME SO I ASKED HER WHAT DETERMINES WHEN YOU WILL HAVE IT.MY MAIN  QUESTION WAS WHY IT WAS LOWERED DID I DEFAULT ON THE AGREEMENT IS THERE ANY RECORD OF ANY LTE FEES OR ANY FEES OF ANY KIND AND SHE SAID  NO  SO THEN WHY WAS IT RAISED FROM 9.99% TO 23.99% THIS MAKING  IT A HARDSHIP FOR ME WHEN MY MEDICINE IS $600 A MONTH OUT OF POCKET . YOU  WANTED TO KNOW WHY I DIDN'T  EXPLAIN THIS TO THEM  WELL I DID AND THEY DON'T CARE ABOUT  THEIR CUSTOMERS AND I AM NOT THE ONLY ONE WHO HAS  THE SAME THING HAPPEN TO THEM AFTER CALLING AND ASKING FOR A SMALL THING  BUT THE CEO,S  GOT MILLIONS OF DOLLARS FOR 3 WEEKS  WORK  YOU WOULD NOT BE SO QUICK TO DEFEND THEM.

Oct 07, 2008 11:01 AM
#9
Ginger Moore
Wilkinson & Associates Realty - Gastonia, NC

Hi Michael, nice informative blog!  I agree, it is a shame that  the credit card companies are allowed to do the consumers so badly!  I wish there was a way to fix this, but i just don't know the answer.  thanks for sharing!

www.charlottelakewyliehomes.com

Aug 02, 2009 02:13 AM