Is This A Good Idea?
In these times of tough competition, smart businesses know the
importance of customer service and the significance of offering
consumers choices.
That must be why Advanta is offering it's card holders a
choice-they can either agree to a rate increase or they can pay a $25
account closing fee. But, the choices don't end there. Cardholders
can elect to simply not use the card, keep it in a drawer to avoid
the rate hike and account closing fee. Then they will be charged a
fee of $15 for an inactive account and a punitive interest rate of
prime +15.74%.
The scary part is, based on a recent survey released by Quicken
Financial Network, six percent of Americans don't know what their
total credit card debt is and 14 percent don't know the rate on their
cards. So, Advanta may just be testing price elasticity, but whatever
the reason, it is certainly an interesting marketing approach.
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