I probably should state up front that I am not a financial expert and definitely have no business advising anyone about credit cards or customer service.
And yet, that is exactly what this column is about.
After a call to customer service at the “Bank of BigMoney,” I was so frustrated that I wanted to close our account just to send the big bank a message. What else would speak louder to them than to lose customers because of this lack of service?
Yes, most customer service numbers offer a buffer of telephone prompts before you can actually get to a live human being. Most times, I even understand that. They want to feed you to the right person. They want to solve your problems before you take valuable “human time.” They want to answer basic questions (account balance information) faster, yada, yada, yada.
But the telephone-prompt-hell for Bank of BigMoney was beyond any frustration that I have experienced. After a series of entering account information and passwords, I was transferred to permanent hold.
When I tried again I was transferred to a dial tone. I found a different customer service number, and after entering all of the account information again, I was treated to an additional round of more automated prompts that included more codes and questions. Finally, I was connected with a human who may have had “customer service representative” in her title but had no idea what customer service actually was.
Because firing my credit card company felt like a big deal, I figured I should do a little research.
Although I found a lot of conflicting information, cardhub.com says that today’s consumer has an average of nine credit cards. Our household doesn’t have quite that many, but I was still ready to pare down the list.
According to CreditKarma.com, consumers should keep four to six credit accounts open. This keeps individuals’ credit score and debt balance healthy. Because we had more than that, I felt pretty good about my decision. But I wanted to be smart about it.
I wanted to review all of our credit cards. If I was going to close some accounts, I wanted to factor in a lot of things, including customer service.
I created a spreadsheet with each card, the credit limit, the available credit, the interest rate and most importantly to me at the moment, the customer service score — mine of course.
I put my headset on and called each credit card company on my list. My goal was to speak with a customer service representative, and I decided my question would be to ask about reducing the interest rate on the account. The answer to the question was a factor but not as important as the process of actually reaching a person at the bank who could help me.
The information I learned was surprising.
Interest rates on my accounts ranged from 9.9 percent to 23 percent. These numbers had changed from when the accounts had been opened, and I probably had been notified but hadn’t been tracking them. That’s not super important if one pays off every credit card every month. Unfortunately, that doesn’t always happen.
As it turns out no company was more frustrating than the Bank of BigMoney in terms of customer service. But the surprise was that the lowest interest rate companies got the highest rankings for best service. And by best service I mean the least frustrating and fastest means to a real person that could answer my question. My favorite, AnnTaylor Mastercard, was a breeze to navigate, and I was talking to a representative in just a few minutes.
Did anyone lower my interest rate at my request? Yes! One did — proving once again that it never hurts to ask.
That one bad customer service call led to an entire credit card review process. For that I am grateful! We have decided to eliminate a few cards from our collection. In my research I discovered a few things that were helpful in making the decision about which ones to keep.
Evaluate interest rates, annual fees and bad credit marks (bad credit ratings will drop off after seven years; good credit scores stay for 10) on each card.
Closing an account should be done with “customer service” and followed up with a certified letter to the customer service department.
Don’t close your oldest account, this would eventually decrease your credit history.
Close newest accounts with the smallest credit limit. That way if you do carry a balance it will be easier to maintain a less than 30 percent balance (it could drop your credit score if you go higher). For example, if you have, say, three credit cards with credit limits of $200, $300 and $3,000 and you have a balance of $200, don’t close the account with the $3,000 limit as your credit can get dinged for having more than 30 percent debt to credit ratio.
Don’t close everything at once. Repayment and consistency count.
Finally, check your credit report in 30 to 60 days of closing an account for any errors or omissions.
And if customer service is as important to you — don’t forget to factor that in to which accounts you are closing as well. I know I will.
Freelance columnist Lori Allen writes in this space once a month.