Imprisoned By Providian - Providian Visa Classic
Written: Nov 14 '00 (Updated Nov 14 '00)
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Product Rating:
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Pros: Generous credit increases after about a year
Cons: Untrustworthy? Good salesman/customer service?
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| urwiller's Full Review: Visa Classic (Providian Bank) |
If only I were more assertive...
I have a Providian Visa Classic and have retained it for well over 4 years. Providian seems to have locked me into keeping this card and for some ungodly reason, I just can't seem to escape.
Here's my long story about my experience with Providian (and the hard time I served with them). I tried to make it concise, but I wanted to give a full perspective. My apologies if you find it to be drab and boring.
Stupidity in Youth
The year- 1996. I was 20, in charge of the world... and wanting to charge the world (to any credit card issued by any nut who might plunk one into my material lovin' hand). Lo and behold, Providian stepped up to the plate and gave me my first real credit card. The world rejoiced... and so did those online merchants.
It was so long ago, that I vaguely remember the details of their offer. Luckily, I save all of my financial statements for rainy-day reading or just in case I might need paper for a new puppy.
As someone who is potentially "high-risk" (they really knew me... they did!) , Providian offered me a secured Visa Classic. All I had to do was send them $300, as a savings account deposit (I like to call it "bail-bond"), and they'd give me a card with a $325 credit limit. I needed to build some sort of credit somewhere, somehow... and Providian (operated by First Deposit National Bank, Tilton, NH and later by Providian Processing Services, Tilton, OH) led the way.
Initially, my APR was 19.80% and of course, my finance charges were computed via the Average Daily Balance Method. I would be charged a $59 Annual Membership Fee, which was lowered after the first year to $39. Also, interestingly enough, my "bail-bond" was of the interest-bearing sort (usually between 2.0 and 2.55%- approximately a shiny quarter per month in my case), which made me feel less like I was spending money and more like I was saving money. Justifiable! (Reminds me of the times my older brother would tell me that I could pay him $2 if I did the dishes. Of course, I fell for it most of the time.)
I was all about that Visa Classic for a good two months or so when the calls started rolling in.
"Hi, Ms. Urwiller. I'm calling from Whatchamawhosit and as a valued customer of Providian..."
Well, you get the idea. Boundless offers poured in for auto-club memberships, health insurance, life insurance, you name it. Foolishly, I signed up for one... or a few. Why not? If I did, Providian would match the cost of the offer with an increase in my credit line. It was like a game. "Let's just see how much credit I can pump out of Providian." As if it were a good thing-- it really wasn't in my case.
About five months later, I realized the error of my ways and canceled the "offers and memberships." Providian promptly adjusted my credit line to reflect this change... they lowered my credit line to the original amount before I had accepted any offers. Yes, they giveth and taketh away.
I received two credit line increases through the next 12 months... apparently, for "good behavior." But, by then, I already had other shiny credit cards to exploit. Most of which had better terms and no annual fees.
So, I guess Providian did help me attain a credit history. Naturally, Providian never stopped reminding me that I could "...boost my buying power by making a deposit today." I never did since I figured they had enough of my money.
The Descent
I started to get a bit wary with Providian in June of '98. A new term was introduced whereby I could now acquire unsecured credit increases up to twice a year by paying a "processing fee" of $12. They would determine if I qualified and automatically charge me the fee if I did. No, thanks. It seemed like they were trying so hard to generate fees. Who could blame them, though? That is one of their primary business functions.
I received three more credit line increases over the next year and a half or so. For the first and third, I wasn't charged a $12 processing fee for the increase. It wasn't until my second, my 3rd Anniversary (yes, they made a hoopla about it on my statement) that I was charged the fee. I had received a $1000 increase in credit (contrary to the "anniversary" message in the statement that claimed it was $100) and to be completely honest, I had so many charges that month, that I didn't even notice the credit increase or the processing fee. During the time, I didn't think it was strange because I never noticed that Providian had charged me on my "Anniversary" but not the other two times. It wasn't until later, while reflecting on past statements, that I even noticed.
My Attempt to Cancel
On the verge of getting married this past year, I decided to close all of my credit card accounts that had higher APR's, so that I could straighten out my finances a bit better (err... so I could actually pinpoint how much in debt I really was). Providian fell into the high-APR category at 19.8%. My balance was $1400 and I paid it off.
I proceeded to call their customer service line to cancel the card. The rep asked me why I was closing my account and I told her that the APR was higher than other cards I had. She then transferred me to someone else and I was persuaded to keep my account open. The "superior" rep offered to change my account to unsecured... which he said that it should already be since I'd been a customer for so long. Who knows why they never even bothered to tell me this until now? This new unsecured account would allow me to withdraw my security deposit. Not only that, Providian would give me a $1200 increase in credit.
I really didn't even want the card anymore and thought I had found a good excuse to decline-- I bellyached about the annual fee. His response was that he couldn't take care of it personally but I could call said-800-number and have my annual fee dropped. Foiled! After further inquiries, he informed me that I'd have to call the 800-number every year to have the fee removed because they couldn't drop it permanently. I didn't feel like wheelin' 'n dealin' anymore so I finally agreed to the same basic card with more credit but unsecured.
My Attempt to Acquire a New Card
Stuck with the Visa and a new last name, I called Providian's customer service department to have a new card issued with my new name. The rep that handled my call may as well as have been working for the FBI. I was told that I couldn't get a new card until I faxed them my marriage certificate and new driver's license. What? Did she want my medical records, too? I think this requirement is rather absurd. I had already had 5 other companies issue me new cards with no hassle, just a simple phone call and a spelling of my new last name. Yet, Providian wanted documentation. I declined to fax the information as it wasn't that important to me. Perhaps this is some kind of security measure that only Providian requires.
Providian Pays ME!
A funny thing happened recently. I got a check from Providian for restitution. The letter attached stated, loosely, that Providian had agreed to make payments to consumers who may have been harmed by its practices. These practices were investigated by the Office of the Comptroller of the Currency of the USA (OCC) and the San Francisco District Attorney's Office (SFDA) The OCC's Consent Order can be found at www.occ.treas.gov/2000/June.htm .
Here's an excerpt: "In reaching the settlement, which culminates year-long investigations by the two agencies, the OCC concluded that the bank engaged in a pattern of misconduct in which it misled and deceived consumers in order to increase profits. The OCC believes hundreds of thousands of consumers were harmed by Providian's activities, and that the bank profited as a result."
It appears as though most of the deception came through offers for balance transfers (with undisclosed terms), no annual fees (with credit protection in fine print), and credit protection (with a bunch of fine print).
I'm not exactly sure why I deserve a check for $70-- I've never accepted any of the offers that were investigated. I can only guess that it may have had to do with the "credit line increase processing fee." That's the only deceptive practice that I observed from Providian.
Will I Ever Learn?
There's my story. Here I sit with a card that I don't use, the hassle of calling an 800-number once a year to have fees removed... and a restitution check. I guess I'll treat the restitution as my reimbursement for being forced to keep the card.
As for potential Providian Visa Classic cardholders-- get this card if it's one of your last options. I'd probably choose it over any Capital One card but there are more trustworthy companies out there (I hope). I certainly didn't have any horrible problems with Providian, but I'm sure many others have.
I just wish I could learn how to say, "no."
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More information about the findings of the OCC and the State of California can be found at:
www.ci.sf.ca.us/da/prov.htm
www.caag.state.ca.us/piu/providian.pdf
www.occ.treas.gov/2000/June.htm
Also, they now have online account access available at www.providian.com
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urwiller
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