“Approved” Credit Card Deals that Fail

Some of the most frustrated people I talk with are credit card customers who say they have not received the credit card terms that were approved by our credit card sales department.

This is an example of the typical type of conversation I’m having these days:

Customer: ”What’s going on?! I applied for a credit card with you guys in order to do a balance transfer, but it didn’t go through.”

Me: “That doesn’t sound good. Let me see what happened and try and get this straightened out for you.”

Customer: “Well, good luck because it’s a real mess. I’ve been charged a late fee on my other card and my interest rate was jacked up because I didn’t make a payment, all because this balance transfer was supposed to go through in plenty of time before my payment was due and it didn’t.”

HOW APPROVAL FOR $20,000.00 TURNS INTO $500

The customer will then explain how a credit card sales agent from our company collected his information and then announced that he was approved for a new card with a $20,000.00 credit limit.

The credit card account holder will go on to explain the details of the balance transfer that he (or she) thought he had transacted, which was the sole purpose for his getting the card.

In case after case, customers have been told by sales agents that their credit has been checked and the credit limits they have been quoted are guaranteed. 

Each individual credit cardholder with whom I’ve spoken, who has had this problem, had been told that the balance transfer transaction which was to pay off his old credit card account had been approved and would be transacted.

PURCHASES MADE ON “GUARANTEES”

Some of these customers have even made purchases or other transactions on the new card, based on the belief that there was a guaranteed amount of credit available.

However, twelve days to three weeks later, the typical customer in this situation will receive a letter which  informs him that he has received a credit card with a $500 credit limit, as opposed to the credit card with the $20,000.00 credit limit that he thought he had been given.

CUSTOMERS UNDERSTANDABLY ENRAGED

Understandably enraged, this customer will then call the credit card company and demand an explanation.

Unfortunately, given the way that the system is set up, the customer connects with Customer Service instead of sales, even though he wants to talk to the sales agent who, he believes, has reneged on the deal he was guaranteed.

Customer Service, however, gets the call and the brunt of the customer’s fury which usually increases when he realizes he can’t give that #@&%$ sales rep a piece of his mind.

NO RECORD OF SALES CALLS

Worse yet, Customer Service will have no record of that earlier call with sales because - get this - no history of any call is recorded until an account is actually established and approved. Of course no account can be considered established until after the sales department is done with it. (There’s a catch-22 for you.)

As a result, there is absolutely no accountability for the sales department. There is no way for either the customer or a Customer Service agent to track or contact sales agents.

The customer usually comes to one conclusion: he’s been deliberately ill-used.

The customer suspects that, since sales agents receive commissions for signing customers up to get cards, they have a monetary incentive to “approve” everyone and “guarantee” whatever credit limit the customer wants as a condition of getting the credit card.

CUSTOMERS SWEAR TERMS DIFFERENT THAN QUOTED

In these cases it is clear that these customers believe they were to be given different terms than those they were actually given.

It is also very clear that most customers do not realize that they each have another hoop to go through before the account’s credit limit is finally approved.

There may be perfectly innocent reasons why these misunderstandings occur. Given the number of overseas agents, some of these misunderstandings may be the result of language barriers.

However, one cannot rule out the possibility that some sales agents may be “conveniently” neglecting to advise customers that they (the sales agents) do not have the authority to give final approval to any credit limit or to any transaction on a new account. (They can get preliminary approval, however, they must submit the account for final approval.)

They may not be telling these customers to make sure they continue to make their payments on the other accounts until the transaction is actually approved. I would say, most certainly, that they are not advising credit card account holders - as I do - to call back in forty-eight hours to confirm that the balance transfer actually took place.

CUSTOMERS FEEL ILL-USED, BUT HAVE NO RECOURSE

From the customer’s perspective, it seems obvious to him that his own finances, credit rating, time, and peace of mind have been traded off by a sales rep eager for a commission.  Yet, he has no recourse. He can’t force the credit card company to make good on terms which he can only claim he was quoted. 

Neither will the company reimburse him for fees accrued on his old credit card account due to a late payment or hiked interest rate. It will take no responsibility for any of this, nor will it help him get a negative mark off his credit rating.

After all, it’s just the customer’s word against an anonymous sales rep that cannot be questioned.

My job, in these situations, is to confirm the bad news: that the customer was not approved, that the balance transfer did not go through, and that the whole situation is grossly unfair.

THE LESSON: RECORD EVERYTHING

So - beware. In this time of financial finageling you may be tempted to short cut the process of reorganizing your debt. Don’t. Take the time to do it right.

Given the havoc that a failed balance transfer can cause a credit card holder in terms of late payment fees, over limit fees, extra interest, rate hikes and black marks against their credit ratings, I advise you to be very careful when applying for a new credit card.

When you are talking with a credit card sales representative about the terms of your new account, it is crucial that you write down and/or otherwise record everything you can. I strongly suggest that you:

1) Get the first and last name of the sales representative.

2) Get as much information as you can about where the office is located (city, state, country).

3) Get the name of the supervisor who is in charge.

4) Write down all the terms quoted to you and read them back to the rep for confirmation that what you understand to be your terms is correct.

5) Consider asking to speak to a supervisor in order to confirm that the terms you are discussing really have been “approved.”

Also, should you find yourself discussing terms with someone who does not have a good grasp of your language and you find the conversation confusing, politely ask to speak with a different sales rep: ”I’m sorry - I don’t want to hurt your feelings, but I’m having trouble understanding you. May I speak with another sales representative?”

Or just politely end the call, call back and hope you get someone with a better grasp of the language.

Your peace of mind and finances will benefit.

For everything else you need to know about how to do a balance transfer so you don’t get stung, get the book.