Which Banks Think for You the Consumer? -- Capital One, get out of my wallet!

Or rather, which ones do not. Wait a minute, you say, banks are not people, they don’t think. Their employees do but they work for the bank, the bosses, and the shareholders, they don’t have to think on your behalf. But but but wasn’t that what got the banks into trouble in the first place? Anybody who has done any business dealing both as providers and consumers should understand that the consumers, clients, or whoever is paying the money, is the dominant part of a business relationship. Think for the customers, business runs well; think not, look at the mess the banks are in right now. After all the mess, it was still us, all the consumers, who had be pulled together by the government to bail them out with our tax money, right?

And don’t be foolish enough to think whichever banks do more TV ads must be more trustworthy, such as Capital One, you know the silly Viking raiders slamming open a lobster with a weapon or going through airport with axes and stuff. It is the cooperate culture, the attitude and philosophy of average employees, and ultimately the management’s overall style and day-to-day decision making that make a bank user-friendly or simply indecent and intolerable and better be left dead.

The reason that good and bad banks coexist, like in any other business, is often times it is improbable for an average consumer to do enough research by direct comparison (or controlled experiments as scientists say). So consumers tend to use information they get elsewhere, unfortunately through TV ads in many cases. Well, recently we were lucky enough to have an opportunity to do direct comparison, side-by-side, of several banks for their response to consumer request. It turned out to be good lesson learned in many aspects: how to choose banks, how to think for our own customers, and as shown here, how to turn bad energy into something useful.

Background: we have business credit card accounts with Citi, American Express (AmEx, mainly for their Costco use), Advanta, and Capital One, needless to say mostly big names in the banking industry. We carried some balance with each one of them, some starting in the current downturn, some longer, but none very big or ever defaulted. Before we noticed, they all raised our interest rate quietly late last year, to ~ 29%! Granted, we had payments sent in late by a day or two with maybe 2 accounts over our entire company history, either because we didn’t receive the statement or the accountant was out of town and forgot to tell others, except in the case with AmEx, we were late consecutively for some 6 months by the same number of days because their statements were sent to an address not often cared for and by mistake, the accountant’s calendar recorded the monthly payday 10 days later than the real date.

While no business can live long with 29% interest rate these days (or any days), the first thing we did was that we called each one of them, here was how they responded:

Advanta: “Oh well, that was the rate your account currently has (repeat after me, ‘my account has a 29% interest rate and’)…”. After some argument, the same person agreed to lower it back to normal rate of about 9%, but in some 30 days. That was fine and we were appreciative.

Citi: One gentleman answered phone call right away, looked into our account, and in a few seconds, said that the rate “will be reverted back to the original one” TOMORROW! (it made me feel like suggesting maybe it didn’t have to be in such a rush, like next week would be fine). After all we paid a few hundred dollars on the extra interest for some time, yet we felt like we owed that person, and hence the bank a gratitude. I told my accountant to pay off Citi’s balance the last and use their card the most for purchases.

AmEx: We were told about the late payments due to our mistaken due date in consecutive months. After speaking with about 3 or 4 people at different 1-800 numbers, we got it that we had to wait for 18 months without late payment for the rate to change back. But the last person, a customer account specialist/manager, did show a lot of sympathy listening to my repeated arguments, and suggested that the policy was pretty fixed and inflexible, but if we could go file a document arguing some responsibility on the bank, e.g. keep sending the statements to the address we didn’t want them to use, and not notifying us of late payments when it first occurred. I then wrote a letter to the management stating my case, in about a week, a person called to confirm mail address and phone number, then a letter came stating that the rate has been lowered. Not a bad result. Sure I spent some hours on it but consider that part of doing business.

Capital One: Long story short, phone calls got kicked around a bit, and a few representatives later we were told the same policy as AmEx: “Oh you will have to wait18 months since the last late payment, m’K? (If you are a naughty again we will have to give you another 18 months in confinement and see if you still have any blood left). Nobody can change the policy set in the software (which obviously is much harder to erase then if set in stone)...” Then I wrote a similar letter as to AmEx. Capital One didn't call me, they just sent me a letter saying “Thanks for contacting us about your Capital One account. … At this time, we are unable to accommodate your written request based on our existing credit policies… You are a valued customer and we thank you for choosing Capital One.” I guess we are not that valued and would definitely not choose Capital One ever again.

You can argue that the banks as business should charge you as much as they can whenever they can, all we consumers can do is leave and get another account. And hey, don’t forget about them late payments. Fair enough, fair enough, if it’s all business. Still we want to ask, is it fair to charge some 30% interest because a check comes in late by 2 days, is it just an excuse for changing business terms or is it based on statistical risk assessment and return calculations? If none of these questions matter, then is there honor and dignity in business, courtesy and decency in working with a customer?

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