Someone I know who works for Providian told me this morning that the current credit model computer program automatically reduces credit lines on accounts where large lump sum payments have recently posted. I was told this stategy was to get rid of customers who have only made minimum payments in the past and/or who keep their cards close to the credit limit. My source has worked for Providian since 1999 and is a supervisor.
Re: Providian's Credit Model Strate Why would they lower credit limits of people who are making large lump sum payments...
Re: Providian's Credit Model Strate because Providian cannot make any money off an account if its paid or nearly paid in full each month.
Re: Providian's Credit Model Strate I just think that reducing peoples credit limits because they make large lump sum payments is ridiculous..What happens if the customer decides to leave a balance of $500 to $1000 on the card for even just one month..What if he runs into an emergency and needs to use the card..They would get paid then wouldn't they...They should raise the credit limits of the customers who can afford to make 3x their monthly payment.,.Maybe they would build some kind of loyalty..It just does not make financial sense to me..I could see if the card never had a balance on it for maybe 2 years because yes they would be losing money at that point but lowering the limits does not help them one bit does it ??
This happened to me. $1,000 limit & they jacked my rate up to 29.9% even though I never paid late or gone overlimit. 2 weeks ago, I paid off account but didn't want to close it so it could age... the same week I get a letter in the mail saying they reduced my limit to $250
None of it makes any sense. I just got a letter regarding a MC I got with them early on. I have probably used that card 2 or 3 times and have never carried any balance on it. They decided to "upgrade" it by giving me a $500 CL increase, a grace period, and a wonderful (not) 18.99% rate. It was the not even a gold card and had the standard 23.99% rate. I have left it open for the balance to limit ratio. Honestly, it is hard to close one, even one I never use, hahaha. I don't know why.....
My 0%APR is up next month. Would it make more sense to make several small payments during the next month rather than one lump sum at the end of the promo period? I definitely do not want to pay 18.9% interest.
Providian right now is in need of cash. It makes sense because they are sub prime and usually most sub prime people don't make more than the monthly payment. Including me at one point. Probably the majority of their customers are at their CL. They are really close to BK right now and really the only way to stop that is cash flow. If someone makes a large sum payment that they think is I risk, I think they give them a smaller cap and maybe raise the apr to get them to close the account. And if they don't, oh well, they are still making good money off the customer. That is may take on it.
It seems pretty clear that they don't want sub primers anymore and are giving us enough reasons to close the accounts. It's like: "okay, this worked on this bunch, they got PO'd over the rate hike and closed their accts, but not on these, so let's try plan B". We'll surely see more and more outrageous stuff if we keep these accounts open longer than they want us to. I've paid my acct off and haven't seen any decrease yet but I'll use it just in case. I need this tradeline for a bit longer since it was opened right after my bk and is helping my current history. I don't see any reason to get mad over it since we all know how long they've been having problems and obviously want us gone by these "strategies" they're using. I'll close it when I'm ready to though. Now I just plan to stick around to bug them.
Let's help better define large payments... How much in dollar terms have you paid and then gotten an adverse loc action? 100, 200, 500? What percent was the payment of the amount due? Let's see if we can better figure this out.
Sheesh, they gave me a 0% deal for 3 months a while back, so I used their money for free, then paid the thing off all at once the month the free interest ended. No adverse reaction from them. And I never use that account - it had been over a year, I bet. No wait, I had an automated monthly charge of $20, which I paid off each month until I finally cancelled that service.
Well I did a Planet Feedback after I posted to this account and they lowered my interest rate..THis was after I have sent 4 in the last 6 months for the same request..Got the typical 16.9% just yesterday. I also have Getsmart which has been just 16.9% as well since I got that card.. If they play any tricks with me I will pay balance and then just let the card ride until I have a few better offers..By the way PFB works..I have also had my annual fee waived with Cross Country and have a Orchard Card witha 9.0% interest rate all due to Planet Feedback
