Dr. Carol Tice isn't the kind of person to climb up on a soapbox.
The cat specialist in North Carolina said she meant simply to warn her colleagues to watch their credit card accounts closely in case they, like she, got hit by a fourfold increase in their interest rate.
But by sounding an alarm on a discussion board of the Veterinary Information Network website, Tice galvanized her profession's Internet community to collectively demand better treatment from the financial companies involved. The demand, apparently, may work.
"I personally will go to the help of customers who may be subject to any changes," pledged Keith Drayer, vice president of Henry Schein Financial Services, in a message sent Thursday to VIN president Dr. Paul Pion, who had complained on behalf of Tice and other Schein card holders.
Observers credited the power of numbers. "By making this issue known to the VIN community, the veterinarians are empowered, because together, they feel that they are a force to be reckoned with," said Dr. Mark Rishniw, a post-doctoral associate at Cornell University and a consultant at VIN, which counts 24,000 veterinarians among its members.
As a single customer with a complaint, Tice said she got nowhere. She first recognized that she had a problem in September, when she noticed that the interest rate on her Henry Schein affiliate charge card had risen to 35.08 percent.
Tice said she'd had the card about three years. The bank that issues the card, Advanta Bank Corp., gives Schein clients a rebate on purchases made with Schein, a distributor of medical supplies, technology and services.
Tice said she doesn't regularly buy much from Schein, but applied for the card when it was offered interest-free for a limited period. Later, the rate went to 7.99 percent, where, she said, it remained for two years.
Tice typically turned over her credit card bills to her accountant to handle without looking at them herself. But after she discovered the rate hike in September, she reviewed her old statements. She found that the rate began its ascent in March, rising to 18.99 percent. The next month, it was 18.31, then 16.99, then 18.99. In July it jumped to 35.49. In August, 35.39. At present, it's 37.18 percent.
Tice said she called Schein and Advanta repeatedly. She consistently was told that nothing could be done. "I'd ask to talk to supervisors, and they were never available and didn't call back," she said.
She checked with the North Carolina Attorney General's office and learned that it is not illegal for banks to raise credit card rates at their discretion.
And that, apparently, is happening throughout the industry. According to a recent report in Fortune magazine, card issuers including Bank of America, Capital One and Citi are citing the economic crisis in considering rate increases.
"They're saying, 'The economy is getting bad, and our earnings are under pressure--so we can change your account,' " Ben Woolsey, director of consumer research and marketing at creditcards.com, told Fortune.
Press releases on Advanta's website show that the company, which describes itself as one of the nation's largest credit-card issuers in the small-business market, has seen a precipitous drop-off in profit. Its net income in 2007 was $71 million. In the first quarter of 2008, it earned $18.4 million. In the second quarter, income plunged to $4 million. In the third quarter, the company lost $17.6 million.
Advanta spokesman David Goodman didn't mention the state of the company's finances or the broader economy in an e-mail response to questions from VIN News Service. He said only:
"Consistent with the industry and our cardholder agreement, we periodically evaluate each of our customers' accounts to assess their ongoing creditworthiness and overall lending risk. In addition, each customer that receives a rate increase is given the opportunity to opt out, in which case their previously effective rate would remain in effect until the balance is paid off in the ordinary course, and their account would otherwise be closed."
Tice said she did not receive an "opt out" notice nor did she know of any reason that her creditworthiness would be downgraded. Told this, Goodman repeated by e-mail:
"Each customer that receives a rate increase is given the opportunity to opt out. With this opportunity comes a deadline date as well as instructions on how to opt out.
"We don't have any other comments."
Two other veterinarians participating in the VIN discussion Tice started also discovered that the rates on their Schein affiliate cards have risen sharply.
Dr. Ebalinna Vaughn, a small-animal doctor in Virginia, said she accepted a Schein card out of convenience, but didn't do a lot of business with Schein and didn't typically carry a balance. Prompted by Tice's warning, Vaughn checked her rate and discovered that it rose from 15.24 percent to 35.95 percent in the past month.
By comparison, a second credit card Vaughn has, backed by U.S. Bank and affiliated with Webster Veterinary, another large distributor of veterinary products, charges a rate of 14.9 percent.
Dr. Kimberly Harrell, a practitioner in Texas who opened a small-animal clinic this spring, credited Tice's posting with helping her avoid hefty finance charges on her Schein card. "I looked at my bill and it went from 7.99 to 27 percent this month," she wrote.
"I try to never carry a balance, but this one time I felt like I could be disciplined and pay off the card so that I could take $20,000 less in my start-up loan," she added. "Thanks for making me aware. I will just pay it sooner than I intended."
Exactly what Schein can and will do is unclear. Drayer, vice president of Henry Schein Financial Services, was not available Friday for an interview, but said he would respond to a reporter's inquiry on Monday.
Another Schein cardholder, Dr. Carl Darby, said he's prepared to close his account if his colleagues don't get satisfaction, even though his rate has not increased and he benefits substantially from the rebate.
Darby, who runs a small-animal practice in upstate New York, said he charges between $15,000 and $30,000 a month on his Schein card, which he regularly pays off in full and for which he receives $200 to $500 a month cash back.
All the same, he said, "If they don't step up to the plate and stop abusing my fellow colleagues, then I'll find another card."
In the large scheme of things, Darby added, Henry Schein is not to blame. "No one could have really predicted the credit disaster that's happened," he said. "I don't think Henry Schein can be held responsible for the economic downturn that we're in."
However, if Schein is in a position to advocate on behalf of the customers it brought to Advanta, Darby said, then it should. "They completely agree -- and how could they disagree? -- that this is ridiculous," he said. "The question is, what will they do about it? We're all waiting with bated breath."