Consumer complaint received 2023-03-30
Company: UNITED SERVICES AUTOMOBILE ASSOCIATION
State: NC
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Advertising and marketing, including promotional offers
Sub-issue: Confusing or misleading advertising about the credit card

Complaint:
On Wednesday, XX/XX/2023, I explored obtaining a secured credit card with USAA. I reviewed ALL of the available detailed information on their website for the USAA XXXX XXXX XXXX Credit Card. USAA disclosed that funds for its secured credit card must be deposited into a certificate of deposit ( CD ). After reviewing the detailed information, I immediately explored their CD rates and noticed they offered a fixed 9 month CD at a rate of 4.50 % APY ; it was a no brainer that this was their highest yielding CD product and my preferred choice. I had {$1000.00} sent to my USAA account via XXXX then proceeded to open the 9 month CD via the mobile application. After opening the CD, I began the application process for the secured credit card. Upon being approved, the application informed me funds arent available in my USAA checking or savings account and I have until XX/XX/2023 to have funds made available. I contacted USAA credit card department and was informed I had opened the incorrect product and I would be transferred so that correct CD product could be opened and the old one be closed. I then spoke with a representative in their closure department and was told I was being transferred because they could simply have the CD converted into the correct CD product. Once I reached the department who would allegedly perform the conversion, I was told that was incorrect information and the CD would have to be closed so Ill be transferred back to the closure department. I then asked the representative to please explain that information to the representative Ill be transferred to considering I was just informed by that same department something totally different. Landing back to the closure department, I was then told since funds are coming from an internal account I would have to wait 7 business days so funds could be verified by the FDIC. This was alarming because this is normally the case for retirement or investment accounts. The representative then proceeded to tell me that once funds are verified, Ill also be charged an early withdrawal penalty. I then requested a supervisor or manager. I was transferred to their resolution department who confirmed that the information the previous representative provided me was correct and theres no manager or supervisor I could speak with.

I am filing this complaint because USAA deliberately failed to mention the specific CD required in conjunction with their secured credit card so such errors could be made and penalties could be charged. Even while opening the CD, USAA asks the reason for opening the CD and again they failed to have an option available that states, to fund a secured credit card so that such errors could be caught early on during the application process. Theyre failing to disclose such details in their advertising and marketing information for the sole purpose of having the ability to charge penalties with no remorse or waiver of the early withdrawal penalty. Consumers deserve to be shared the specifics XXXX ) to avoid such error and XXXX ) while shopping around with other financial institutions that offers secured credit cards were able to compare rate of return on the products our security deposits are held in. Additionally, theres no reason that cash should undergo a 7 business days verification ; especially when being transferred from an internal USAA account. If authentication of funds is the reason for the hold then funds should not be able to be used to begin with. I could have easily kept transferring the funds to other checking or savings accounts in attempt to hide the original source of the funds and no hold would have been required then. Again, USAA only reason for such practices and lack of transparency in their marketing and advertising of their secured credit card is to capitalize off their members and charge these penalties.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation