Providian OnLine Credit Cards rip-off! Finance charges on purchases before they are made! Nationwide

I discovered yesterday that Providian has set up a method to charge interest on new purchases EVEN BEFORE THEY ARE MADE. It's a sneaky think called their new Two-Cycle Average Daily Balance methods. What it means is this:

1. They send you a bill for your new purchases, and they give you a due date. So far, so good.

2. You pay the bill in full by the due date. Great. Not many of us can do that, but keep reading.

3. You make new purchases during the month. That's reasonable.

4. Oopps, they send you a bill charging you interest on your new purchases for last month and this month. What happened to the grace period?

5. It is completely gone. NOT ONLY IS THE GRACE PERIOD GONE, BUT THEY USE AN 'AVERAGE DAILY BALANCE' WHICH ALLOWS THEM TO CHARGE YOU INTEREST EVEN BEFORE THE PURCHASE IS MADE.

Here is the story (because you can't understand it from goblygook on the back of your statement). If you had an ending balance at the end of your last monthly billing (your new purchases last month), then they can charge you interest on those new purchases because you did not pay them off BEFORE the bill was sent to you. It also means that they can charge you interest on your new purchases this month even before they send you a bill for it. IT IS CALLED THE TWO-CYCLE BILLING METHOD OF CALCULATION. IF YOU HAVE ANY BALANCE AT ALL AT THE END OF YOUR BILLING CYCLE (even if it is just your new purchases), THEY CAN CHARGE YOU INTEREST ON EVERYTHING, NO MATTER WHEN YOU PAY IT.

DOES THIS SEEM FAIR? Fortunately I can pay off the balance and never use this card again... but think about all the helpless people who are paying outrageous interest to these people!

LET'S ENCOURAGE EVERYONE TO DO EVERYTHING POSSIBLE TO DROP THEIR PROVIDIAN CARDS. THE ONLY WAY THEY WILL EVEN NOTICE IS WHEN THEY START LOSING BUSINESS.

Bonnie
Bowie, Maryland
U.S.A.