It Pays To Discover…. That Your APR Stinks

In this latest edition of Executive Customer Service cures all that ails you, reader Jeremy was able to keep his Discover Card APR from rising by escalating to the top of the customer service ziggurat. However, he doesn’t realize that he shouldn’t be so happy about keeping an 18.24% APR. We let him in on the secret…

From: Reception [redacted]
Sent: Monday, October 15, 2007 1:33 PM
To: ‘’
Subject: Customer Service Issue re: Arbitrary Rate Increase

Dear Mr. Nelms,

I am contacting you in the hopes that you will be able to resolve my complaint. I have been a loyal customer of Discover for nearly 2 years now. I use my card regularly, always pay on-time, and am in good standing. I’ve always enjoyed the willingness of your company to help when I have issues and to monitor my account for fraud if there are any charges out-of-the-ordinary.

However, I received a form letter on October 10th, informing me that my APR would jump from its current 18.24% to the Prime Rate + 14.74% with no information as to the cause of this increase. I called customer service and spoke with a representative who informed me that this had nothing to do with my credit score or account standing and that rates were changing to “remain competitive” with industry standards. To keep my rate as it was, my only option was to close the account, even though your company would “hate to lose me, since I was a good customer”. Confused, I ended the call and searched online for more information.

On October 12th, several consumer advocate websites had more information on the rate change and that thousands of customer’s rates had been arbitrarily raised. It was also pointed out that the Prime Rate had just been lowered, that Discover was still offering cards between 10.99-18.99% on their website, and that no other credit card companies were doing this.

Frustrated that I was singled out but determined to stay with Discover, I again contacted customer service today – October 15th. I initially spoke with a Representative in your Ohio call center named Tiffany, asking that my rate stay the same after December 1st. I pointed out the fact that the Prime Rate had been lowered, that you were still offering the same rates as before, that none of your competitors were doing this, and that it was causing a lot of bad press for consumers. She again stated that the only way I could keep my rate current is to close the account. I asked to speak with a supervisor and she contacted me with a manager named “Kelly”. I re-stated my position to keep the current rate and said I would like to remain a Discover cardholder, but I thought this situation highly unfair and arbitrary. Kelly still would not help me and I asked whether it was better to keep a loyal customer, over increasing company profits in the short-term. Her answer was simply “no”. I then asked to be transferred to your retention department in hopes we could work out a mutually agreeable solution and she informed me that she would not transfer me as my account was “ineligible for retention”.

Now I’m contacting you, in the hope that you realize that keeping a good and loyal customer is more important than raising short-term profits. Please note I’m not asking for a significant decrease in rate, just for things to stay as they are right now. Up until this point, I’ve been quite pleased with Discover and been able to say that you aren’t like “every other credit card company”. But, if my rate is arbitrarily changed, you will be just another credit card company to me, I will close my account, transfer the balance, and never become a Discover customer again.

I’d like that not to happen though and hope you agree with me. I look forward to hearing your positive resolution to this matter, you may contact me via phone @ [redacted]

Thank you,

– Jeremy

Here’s the strategy Jeremy employed, a classic system of escalation:

1. Play the loyal customer card. You would just hate for this small issue to cause you to take your business 2. elsewhere, because you really enjoy doing business with this company.
2. Not getting anywhere with first rep? Ask to speak to their supervisor.
3.Plead your case again. Is the supervisor Immovable ? Ask for retentions. Their goal is to keep you as a customer.
4. Being denied a transfer to retentions, Jeremy sent a well-crafted, thoughtful and personal email to executive customer service, where he found success.

The only problem is the resolution Jeremy sought wasn’t very good! It’s a sad state of affairs when people are pleased about a 18.24% APR. What is this, consumer Stockholm syndrome? Your APR is at least 4 points over the national average. But at least you had a successful escalation. Hopefully you won’t have to put those skills into use again…. with the new credit card company you should be switching to. Bankrate has an easy-to search database for credit card offers, and you can specify if you want to look for cards with low APRs.

RELATED: Discover Randomly Raises 400,000 Members’ APR “To Remain Competitive”
(Photo: Getty)


Edit Your Comment

  1. smarty says:

    Posted a couple days ago…

    “Heh! Just called them up and politely asked them to lower my rate back to the 12% it was before. They transfered me to another dept (retention?), and I repeated my request. I stated that since it’s not based on a credit report, and that they are still offering rates between 10.99%-18.99% on their web site, that I wanted my rate back to it’s original rate (12%). They lowered it to 10.99%. Total time on my cell phone counter, 5 mins, 52 secs. But we’ll see if it stays that way after Nov. 1. “

    I forgot the name, but it their Utah call center.

  2. gniterobot says:

    I finally got moved over to a zero interest and am making headway on some bad college purchases. Luckily I have no loans, but the CC companies got me for over 500 in interest before I was able to get it straightened out.

    Course, as will be pointed out by my fellow commenters, it was my fault. And I agree. But I hope that this kind of awareness will bring about smarter consumers….Not that the beer and burritos weren’t delicious, but I didn’t have to go every weekend.

  3. ogremustcrush says:

    Wow, that rate sucks. I have like no credit being a poor college student, and my card has rewards, no fees besides late fees, and cash rewards. USAA rocks… Not that I would ever let a balance sit on it anyway, a billing cycle is the longest loan I have ever needed, and that is free as long as I pay off the entire balance!

  4. IRSistherootofallevil says:

    Id Discover pull this stunt on me, they’ll find that they’ve lost a customer….FOREVER.

  5. IRSistherootofallevil says:

    typo…:If Discover pulls this stunt on me, they’ll find that they’ve lost a customer….FOREVER. AND EVER.

  6. synergy says:

    That APR does suck. Mine with Discover is 11.49%.

  7. BlueModred says:

    @ogremustcrush: a-men regarding USAA. My card is really very good for what I need. Cash back, plus a 4.2 APR, not that I carry a balance at any time. And back when I first got it going into college, they were the only ones to offer me a card without a co-signer.

  8. randomconsumer says:

    I have a 0% interest rate and it’s fantastic! You know how I got that? NO CREDIT CARDS!!!!!!! I busted my butt to get them paid off last year and I can honestly say I don’t miss them. Life is good without payments.

  9. olegna says:

    Something is fishy here. Whenever a credit-card interest rate post comes up, the comment board is filled with people boasting 0% to 10% APRs.

    If the national average is about 15%, and the average person owes a running tally of X thousands of dollars, it sounds to me like either this board is filled with an dis-ordinate amount of non-average-APR credit card holders here, or, more likely, they aren’t telling the whole story:

    If you just transferred over a 20% APR card to a promotional offer of 0%, please disclose that.

    I’m always trying to find these mythical 4.99% APR cards (and my credit score is pretty good) and all I find are promotional offers where if you’re late a couple of times over a year (with all these little caveats, like if the due date falls on a Sunday or holiday then it’s due earlier) then it rockets up to 20% or whatever — or if you’re not late they give you the promo rate only for balance transfers, a higher rate for additional charges and then they don’t apply your payments to the higher APR until the lower one is paid off. There seems to be a million different ways for a 0% promo card to end up being much higher.

    I used to play the CC juggling game. And I always seemed to have a 0% APR coming “down the line” of this juggling game. (They also tend to charge a percentage-based fee for these transfers, by the way.) But in the end the 0% never seemed to last very long and there were fees involved with this transfer that pushed the “hidden APR” higher.

    I have zero debt, by the way. And even after paying off $26,000 in CC debt form my stupid 20s, the companies were complete pricks — CapitalOne refused to lower my 29.99% APR EVEN AFTER I paid off thousand of dollars and had a ZERO BALANCE. (In fact, when I called they owed me $22 because I overpaid on my last check!)

  10. kJeff says:

    As someone on the other end of the spectrum, someone with not-so-good credit, I sent a similar email to the CEO and got a call back from their executive customer service. They were able to lower my APR, not to what it was, but pretty much able to meet me halfway.

    I’ve been with Discover for over 14 years now and during an extended period of unemployment 2 years ago, Discover was the only card that really worked with me and helped me make payments. That unemployment stint pretty much demolished my credit, so I’m not in a position to go somewhere else.

  11. ancientsociety says:

    Funny, I never actually thought my letter would end up posted…yet, here it is!

    As far as an 18%APR “sucking”, it was actually the first card I got after digging myself out of some very BAD credit history. Also, I’ve found that Discover is really quick to resolve any issues I have and their fraud dept. seems very much in-tune with my account. So far, I’ve been really pleased with their customer service and support.

    @olegna: I second that.

  12. mike1731 says:

    I suspect the reason you don’t see the low teaser rates is that you don’t carry balances on your cards. I have great credit, and have a fair chunk of money on my credit cards as an outstanding balance. And I typically see several cheap rate credit card offers each month, at rates between 2.9 and 9.9%, typically for one year, after which the rate resets to a higher rate, around 13.9% typically. The game of the credit card companies is the assumption you won’t pay off the balance due, then you’ll miss a payment and they can hit you with the default rate. But if you make all the minimum (or greater) payments on all your cards, on time, then the rates hold and it’s cheaper than other financing options available. The trick with all these offers is not to believe you’re so credit worthy that you respond regularly to them. Otherwise, you can dig yourself into a massive crater.

  13. vex says:

    I use a credit card, my rate is 0%, because I pay it off every month. Cards can change the rate whenever they want, and its a waste of my time to call them and spend an hour on the phone trying to get them to lower it. Doesn’t matter if you pay it off, or always pay on time, or always pay at least the minimum, or send the CEO a basket of fruit every Christmas. They will do whatever they want. You can’t win at their game.

  14. That70sHeidi says:

    I loathed Discover and their stupid “points” system and was glad to be rid of them. For what its worth, my former credit union offers Visa cards for 9.99%, as well as personal lines of credit. As an uninteresting side note, I declared bankruptcy a few years ago and they were included in that. Recently my mom said she was going to use the CU to get a PLoC and I said hey, see what I can get, I’ll do a balance transfer on something. They told me my account is still open, but if I want any money out of them I have to pay off what was allegedly dismissed a few years ago first. I laughed. They have had crummy customer service and policies since my dad stepped down as president. Screw ’em.

  15. dan48906 says:

    I too received one of the friendly notices from Discover Card that effective Nov. 1, my APR will go to 21.99%.
    Last I had checked it had been lowered to 11% but then when I checked my latest statement, it somehow had crept up to 14%
    My credit is good, no late payments in many, many year, I’ve been a customer for 18 years and normally carry a small balance on the card. Checking my bank statements, I found that I have run a mere $18K through the card in the past 2 years.

    So I call and get the customer service run around that this is being done for competitive purposes.
    When I got the “real” reason mailed a few days later I was flabbergasted.

    “The increase in APR is based on the following characteristics:
    — Account open longer than 12 months
    — APR less than 20%
    — Account not used monthly (I guess payments don’t count as use).”

    Needless to say, the card’s balance is now zero and my new shredder did a wonderful job on the plastic.

    So long Discover.