- Report: #181272
Complaint Review: US Bank - Internet, Nationwide
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US Bank
www.usbank.com Internet, Nationwide, U.S.A.
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800-699-2281
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US Bank UNETHICAL GREEDY usbank.com Internet, Nationwide
I am 21 years old and have been a customer of US Bank for around 3 and a half years. I had my checking account and two credit cards all through this bank. I am very serious when it comes to keeping my credit up and paying all my bills and thats what I did with the credit accounts issued by US Bank.
One day I was going to have a balance transfered from one credit account with another company to my Visa card with US Bank. Of course with any transaction over the phone with a bank they ramble off all the fees and interest included with it so fast you can barely understand them. I happen to catch that my interest rate was 20% for purchases and balance transfers. Now I knew my interest rates were originally around 14% which is still high but I was young and just starting a credit history. I immediately interrupt the representative and ask her why my interest was now 20% instead of the original 14%. She said I was now on a default APR.
Hmm? I have paid more than the minimum payment on-time every month since I've had the credit cards and with every other credit card company I have. I told the lady all of this and she proceeded to tell me she did not know the reason why and that if I wanted to know I would have to send a letter by mail to the credit department to recieve the reasons. I told her I wanted to talk to someone that could tell me over the phone and that if she would, get me someone from the credit department. She told me they dont have phones in that area. I thought they were just giving me the run around hoping I would just give up on it.
I didnt and I kept calling over and over hoping to speak to someone that could give me just one reason why they would do this to a customer of theres that fulfills his obligations to all his lenders and they know this because they check my credit every 6 months to make sure. I finally get an answer one day when I called and talked to some guy from the credit department (who didnt have phones) and he told me that when they last checked up on my credit report that it had some negative marks on it and therefore raised my percentage rates. I immediately paid for a copy of my credit report thinking I was a victom of identity theft, that someone out there had accounts in my name.
I got my report and it showed nothing negative, and I was not past due on any of my accounts. Therefore, I called US Bank back and talked to the credit department again. I asked them to send me a letter explaining what on my credit report that they saw caused them to make the decision. After telling me that I would have to send them a letter for them to send me a letter, I got angry and demanded I talk to supervisor in that department. Another guy gets on the line and agrees to send me the letter without me having to do anything further. Which was a relief I finally felt I was getting something accomplished.
When I recieved the letter the reasons were that I had an insufficient credit history, and that the balance on my credit card exceeded 50% of its credit limit. I thought that as long as I didnt go over these limits they set, I was OK. As far as my credit history, it hadn't got any shorter since I was first approved for the credit card 3 years before this whole deal. Which at the time got me the 14% interest. Now since I'm more established it gets me 20%? Im confused. Although this may be legal (i'm not sure) if you ask me it's bad business and it's awfully greedy and unethical on there part. Be aware and always read the fine print on all credit agreements. They never ended up lowering my interest rates but they did give me a $2000 credit limit increase for being such a great customer. Go Figure! I guess they want me to spend more at the now higher interest.
Jake
Central, Illinois
U.S.A.
One day I was going to have a balance transfered from one credit account with another company to my Visa card with US Bank. Of course with any transaction over the phone with a bank they ramble off all the fees and interest included with it so fast you can barely understand them. I happen to catch that my interest rate was 20% for purchases and balance transfers. Now I knew my interest rates were originally around 14% which is still high but I was young and just starting a credit history. I immediately interrupt the representative and ask her why my interest was now 20% instead of the original 14%. She said I was now on a default APR.
Hmm? I have paid more than the minimum payment on-time every month since I've had the credit cards and with every other credit card company I have. I told the lady all of this and she proceeded to tell me she did not know the reason why and that if I wanted to know I would have to send a letter by mail to the credit department to recieve the reasons. I told her I wanted to talk to someone that could tell me over the phone and that if she would, get me someone from the credit department. She told me they dont have phones in that area. I thought they were just giving me the run around hoping I would just give up on it.
I didnt and I kept calling over and over hoping to speak to someone that could give me just one reason why they would do this to a customer of theres that fulfills his obligations to all his lenders and they know this because they check my credit every 6 months to make sure. I finally get an answer one day when I called and talked to some guy from the credit department (who didnt have phones) and he told me that when they last checked up on my credit report that it had some negative marks on it and therefore raised my percentage rates. I immediately paid for a copy of my credit report thinking I was a victom of identity theft, that someone out there had accounts in my name.
I got my report and it showed nothing negative, and I was not past due on any of my accounts. Therefore, I called US Bank back and talked to the credit department again. I asked them to send me a letter explaining what on my credit report that they saw caused them to make the decision. After telling me that I would have to send them a letter for them to send me a letter, I got angry and demanded I talk to supervisor in that department. Another guy gets on the line and agrees to send me the letter without me having to do anything further. Which was a relief I finally felt I was getting something accomplished.
When I recieved the letter the reasons were that I had an insufficient credit history, and that the balance on my credit card exceeded 50% of its credit limit. I thought that as long as I didnt go over these limits they set, I was OK. As far as my credit history, it hadn't got any shorter since I was first approved for the credit card 3 years before this whole deal. Which at the time got me the 14% interest. Now since I'm more established it gets me 20%? Im confused. Although this may be legal (i'm not sure) if you ask me it's bad business and it's awfully greedy and unethical on there part. Be aware and always read the fine print on all credit agreements. They never ended up lowering my interest rates but they did give me a $2000 credit limit increase for being such a great customer. Go Figure! I guess they want me to spend more at the now higher interest.
Jake
Central, Illinois
U.S.A.
2 Updates & Rebuttals
Greg
Aurora,Illinois,
U.S.A.
response to credit card problem from former bank manager
#2Consumer Comment
Thu, March 23, 2006
Jake, Having managed a bank branch(not a USBank) for a number of years, I thought I could offer some insight. First of all, credit cards bear the most risk of any loan a bank offers because they are unsecured, or have no collateral to back them incase of default, therefore they are always monitored the closest. These variable rates will always fluctuate with the "prime lending rate." This is the rate that banks are charged by the FED to borrow and cover required reserves based on their customer's account balances. As for the default rate. Any bank that extends you a revolvong line of credit, such as a credit card, will reserve the right to periodically check your credit to protect themselves. What they are looking for is your current sum of total monthly required payments on outstanding debts, divided by your monthly gross income. Otherwise known as debt-to-income. A customer is assessed to see what their probability of default is. The higher the risk, the higher the rate. If you currently have higher balances, than you did at the time you got the card, you may have moved yourself into a higher risk category. The 50% number is a universal figure that banks like to see you stay under, meaning if your limit is $1000, you want to keep your balance under $500. Going over this 50% ratio will ultimately bring your credit score down, even if all monthly required payments are made on time. The reason you appear to be a higher risk over 50% is you are considered "overextended", meaning you may not be able to keep up with your debts. Also, consumers who are planning on filing for bankruptcy will more often than not, max-out all of their available credit. The thought process is that they will ultimately not have to pay for it anyways, and the bankruptcy is about the worst thing you can have on your credit report anyways, so whynot? I would assume if you are 21 and got the card 3 years ago, you may have received a student visa or MC. The interest rates are usually reasonable(considering little or no credit history)and are set there because the bank is giving you an opportunity to start building your credit history. Statistically, these cards generate above average late payment and over the limit fees. This is where the banks makes their money on these, because they also have a high rate of default and non-payment, yielding a loss to the bank. Once the rate defaults to the higher APR, you have a very difficult time getting it reduced or forgiven. All of this information is given to you in your disclosures, in not so plain english. You should read these carefully(despite their ridiculous length) to avoid this in the future. If these disclosures were not given to you at the time the card was issued, that's another story. Unfortunately, you will find similar practices at just about any financial institution. Sorry for the length of this response, but I hope I was able to help in some way.
Stile
Phoenix,Arizona,
U.S.A.
Debt to income ratio
#3Consumer Suggestion
Wed, March 15, 2006
Even if you pay your bills on time every month, part of your credit score is based on your debt to income ratio. If this ratio is too high, then it lowers your credit score, so even though you may have more credit history than when you started, you may have a lower credit score which is why your rates went up.
