How WaMu makes money from credit cards

From a reader:

“I love the fact you started a website to let people know how Washington Mutual does business. I recently received a letter from WaMu stating they had reviewed my account (after 7 years of paying on time, staying under the limit and they never reviewed it before) and based on information obtained from my credit report reduced my credit limit to $1.00 more then my current balance with them. The letter actually said they were sending a letter to notify my because I was such a valued card member.

A few weeks later I received my monthly statement to learn they had jacked up my interest rate to 31.99% APR. I was still upset with the original letter but the realization of what the letter didn’t tell me but my monthly statement did really pissed me off.

After several phone calls and getting passed from one CSR to another (when I had specifically asked for a Manager), one of the representatives said it was due to a delinquent account on my credit report. I’m racking my brain to try and think of who I could owe money to. Nothing comes to mind.

I ran a copy of my credit report to learn that my health club had turned my over to collections for $120.00. What? I work out 3 to 4 times a week and you would think if I owed them $120.00 they would stop me when I scan in maybe once in say 6 months.

I go to the health club (it’s workout day anyway) and talk to the Manager. He’s recognizes me as a regular and with a perplexed look on his face says they will figure it out and call me and to enjoy my workout. So, I did.

Well I get the call mid-morning the next day. Someone had transposed a number so they were billing me every month but the money was inadvertently applied to an unidentified account they use when there is a billing problem. They had indeed (in error and admittedly so) turned me over for collection. Well, the health club took immediate action to get the erroneus item removed from my credit report and wrote a letter of explanation to Washington Mutual on my behalf. I wrote an additional letter and mailed them together to Washington Mutual.

It’s been a few weeks so I called them today to see if they had taken any action. They informed they were very sorry but the Correspondence Department had reviewed my request and was unable to restore my account. The lower credit limit (not a big deal) and 31.99% APR (way BIG deal)would remain.

So I’m on my third representative now… You know, I suddenly realized these people speak English (some of them quite well) but they damn sure don’t think in English. All three representatives read me word for word off the script unable to comprehend my point and completely unwilling to do anything.

Finally, they offered to reduce the credit limit to 23% but they would have to close my account. I told them to have it, I had no reason to want to continue a business relationship with an unreasonable business. The part that sucks is they are too stupid to realize they would have made more money on me over the years than they ever will now.”

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