Those of you searching for low-interest credit cards are sometimes getting a bum steer. Some of the lists that circulate show institutions that offer 10 to 17 percent interest rates, but they don't tell you everything you need to know. Sometimes you have to fight for the cards you deserve.
Although many of the banks on the list will sign you up with no problems, others put roadblocks in your way. You may learn that you don't qualify or that the card comes with strings attached.
For example, some low-interest credit cards are available only to local people. Some banks require that you keep an account there. Some impose unusually high credit standards. Some of the cards carry variable interest rates, which might not interest you.
And sometimes, the banks are so swamped by the publicity given to their low-rate credit cards that they reject mail-order customers that they ought to have taken.
I ran into the latter problem after writing a credit-card column last February. In it, I mentioned several low-rate institutions that accepted customers nationally, among them the Union National Bank of Little Rock, Ark., where state law limits what banks can charge. Union National was then charging 12.5 percent for revolving credit; now it's down to 11.5 percent.
In April, I got letters from two readers suggesting that Union National was not offering its credit cards in good faith.
They had both applied for Union National cards and been turned down, on the ground that their credit wasn't good enough. The bank does apply higher credit standards than you face at a bank charging 21 percent. But these rejections seemed unreasonable.
A reader in Citrus Heights, Calif., said he was turned down because two other businesses had made inquiries about his credit during the past six months. (One: a credit union making a routine inquiry, after payment schedules were changed on an old loan. The other: Sears, Roebuck, when $250 was added to the reader's existing credit limit.)
Union National inferred that he was opening new credit accounts, which might affect his ability to pay. The reader told the bank that was not the case -- but it rejected him anyway. Its credit checks are "just fishing expeditions, in search for some pretext for denying credit to qualified applicants," he protested. His credit bureau told him that it had just seen a similar rejection, also by Union National, of an IRS agent with a "beautiful" credit record.
A Worthington, Ohio, reader -- who describes himself as a "hard-working physician who pays his bills on time, almost compulsively" -- told the same tale. There were more than two inquiries on his credit record because he had been looking into refinancing two houses, which could have lowered his monthly mortgage payments and made him a better credit risk.
He explained that to Union National, but no dice. He was rejected. "I have enough pride and resolve to pursue this as an issue that may affect others," he wrote to me.
So what's up? Is Union National giving out cheap credit cards in good faith or isn't it?
The bank's marketing vice president, Jim Watts, says it is. "It sounds to me as if those two readers should have been accepted," he told me. "We're running a month behind on processing applications, and we have some employes just out of college with a list of do's and don'ts in front of them. If something is complicated, it is sometimes easier just to say no."
As a matter of policy, the bank rejects applicants whose credit records show two inquiries from credit-granters within the past six months, on the assumption that the customer is loading up on credit. But where there are other explanations for the credit inquiries, Watts says, the bank's credit-card department should -- and will -- look again.
In fact, he says, all the home refinancings taking place are leading the bank to reexamine its policy on credit inquiries. The Ohio doctor was sent a credit card and an apology.
Watts advises rejected applicants with good credit records to appeal to higher authority in the bank. If you're turned down, and know that you have a spotless credit record, write him a letter at the bank (P.O. Box 1541, Little Rock, Ark. 72203) and tell him Jane Bryant Quinn sent you.
Incidentally, Union National plans to move its credit-card operation to Delaware, where it will be allowed to charge a higher interest rate. But Watts says the rise won't be unreasonable -- perhaps to the area of 13.5 to 14 percent (based on current rates), which still would be a good buy.