When asking Chase to waive a fee, persistence can pay off
This great article in the San Francisco Chronicle goes into great depth as to why Chase charges the amount of late fee it does (credit card) and what the author did to finally get a $39 late fee removed.
I was about to give up and pay the fee, but then I asked to speak to the rep’s manager. As I was transferred, I recomposed myself and then made the same request to the next agent, who promptly and politely said she would remove the fee!
Just like that.
So, why did the bank give in? And why didn’t I give up at the first rep’s repeated rejections?
But even more interesting is why the bank was ultimately willing to refund the fee.
But some credit-card issuers also take into account a “profitability score” when deciding whether to waive a fee — and that score doesn’t just correlate with risk, but with how much a bank expects to make from this customer. And a reliably paying (i.e., low-risk) customer is not necessarily a profitable one.
“Some people might assume that if they have a great risk score, they’re the customer that banks want,” Frank says. “But people who make payments on time are often not where the banks make their money.”
So, when I got to that second Chase rep — the one who waived my fee — she may have calculated that I was either a low-risk customer or a high-potential-profit customer, and wanted to keep me happy. And even if I haven’t been a profitable customer so far, Frank points out, there’s always the chance that I might make them money in the future.
I’ve experienced this myself. Every few years, almost like clockwork, my credit card companies raise my interest rates for no reason. It is often only a few points, and doesn’t really matter because I pay my card off every month anyways, but because of the principal, I will call them and ask to have the rate returned to where it was. This work many times for my card with Citibank, which was my first card and I had it for more than 15 years. Sometimes when they refused, I would ask them to cancel the card on the spot, and they would transfer me to the customer retention department who would agree to lower my rate again.
But one year, they simply agreed to cancel my card. This was in 2006, just before the sub-prime fiasco hit.
This really makes me wonder, why is it that banks don’t want customers that are reliable and pay off their bill every month. Have they become so addicted to the fee income they get from risky customers that they can’t stand having a good customer whom they make less money from? Certainly, they make some money from me, from merchant fees.
If they are still dropping reliable (but boring) customers for sub-prime ones, perhaps we aren’t through this sub-prime mess just yet.
Customer service, Fees & charges | admin August 9, 2010
