As seen on BankRate.com’s Credit card blog, Plastic Rap, under, “More on Chase monthly fee” (Wednesday, December 3, 2008, Posted 11 a.m.; no permalink was given), Ellen Cannon, managing editor for Bankrate.com (whom I would deem both the site and Ms. Cannon to be reliable), reported:
I asked a Chase spokeswoman for clarification and here’s the response:
For those accounts affected by this change, the service charge of $10 will be billed monthly whether or not there is a balance on the account.
A customer can avoid the account service charge by paying off the account balance and closing the account by Jan. 1, 2009. The last billed charge can also be removed if the account is paid off and closed within 30 days of the charge billing.
This change impacts a very small percentage of our accounts, less than one-half of 1 percent of our accounts on file. It does not apply to all accounts.
As documented under my post here, “Chase’s credit card portfolio consisted of ‘over 156 million cards issued’” (as indicated in a Chase attorney’s letter to the Federal Reserve Board).
Therefore, after doing a little math (.5 percent times 156 million*), we find that Chase continues to enjoy manipulating impressions before the media, Congress, regulators, and anyone else who can’t do math (or who is “paid off” or otherwise influenced to succumb to “the dark side” such that they ignore the math). This change in terms notice under discussion will impact approximately 780,000 cardholders who were lied to, being promise a low “fixed rate” through direct mail (fraud, I would argue) and other solicitations, only to learn that Chase is still not satisfied.
Chase has “$25 billion” in bail-out money, a Federal Funds Rate at “the lowest level on record“; acquisitions such as Washington Mutual and Bear Stearns purchased at bargain-basement prices; but, it wants more, more, more, more, more, more, and still more, from customers who it can bully into submission.
* There may be a difference in terminology being used by Chase representatives speaking in various venues: does each card issued represent an account, or does each individual customer (i.e., person to whom a card is issued) represent an account, according to Chase? — I would not know, but I now have a best guess based on Chase’s obviously vague and intentionally minimized portrayal of the number of individuals who are impacted.
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on Dec 28th, 2008 at 8:41 pm
[...] go ahead and expand the analysis I began with the posts concerning “approximately 780,000 cardholders” and “almost a million” in terms of estimating how many people Chase is going to [...]
on Jan 6th, 2009 at 2:14 pm
I’m one of the lucky Chase credit card holders who, with a FICO score of over 800 and having never had a late payment, just had my minimum payment on my Chase card balance transfer increased from 2 to 5 percent–plus a new “monthly service charge” of $10. They’re even charging interest on the new monthly fee.
When I called Chase and observed that in the current economic conditions it would be a hardship to go from paying $300 to $1,000 a month, Chase helpfully offered to waive the monthly fee and reduce the minimum monthly payment back to 2 percent, if only I would agree to a 300 percent increase in my credit card interest rate.
I don’t know about the other 780,000 affected Chase card holders, but I will be talking to my Senator and to a variety of regulatory authorities about what looks to me like one more abusive practice by a large credit card issuer–made all the more pleasant, considering the the FED’s overnight lending rate is close to zero, and Chase has been a recipient of a great deal of federal bailout money of late.
While Chase is enjoying access to the lowest cost money since the 1930’s it has decided to squeeze even it’s most credit worthy customers–and in my case at least, to do so without providing even the legally required 15 day notice on proposed changes in terms.
I have just canceled all my Chase accounts and will never do business with these folks again.
on Jan 13th, 2009 at 10:34 am
Count me in as a one of the lucky 780,000 customers who was accessed a service charge of $10.00 a month. Approximately 18 months ago I received in my statement the opportunity to participate with a balance transfer promotion. I could choose 0% APR for 6 months or 3.99% APR for the life of the balance. I paid the 3% balance transfer fee and selected the 3.99% APR life of balance option. I have not conducted any purchases with the card because I knew the purchases would be placed in the higher interest bracket with no hopes of paying them down until my 3.99% balance was paid first. I set the account up on automatic payments several days prior to the due date and at a higher then required balance. I have made good progress to with paying down the balance. Not one time was I every late because I knew if I was five minutes late then the 3.99% rate would increase to the default rate with a late payment accessed of about $29.00.
When I received my January bill I discovered the $10.00 service fee, I called the customer service number waited on hold for 28.47 minutes. I asked what the fee was for because I was not late and paid more than the required balance. The Customer service rep actually told me that Banks can not make money at 3.99% and the fee was to supplement that. She also said that I received a notice. I replied that I had 3.99% APR until the balance was paid off based on my payments that would take place about June 2009. She said will you still have 3.99% interest rate, I said no I have a 13.50% APR that will increase each month as my balance pays down. She told me that the fee was a just fee associated with the account and had nothing to do with the rate. I replied the $10.00 or $120.00 a year fee was for the privileged of paying my account on time, she said yes. Chase needs to provide their associates with a copy of Truth in Lending and educate them on the difference between interest rates and Annual Percentage Rate. The 3.99% APR for life of the balance which was what was disclosed to me at the time of transfer.
I paid off the balance which is I guess is what they wanted. It also appears to me that Chase does not want GOOD customers that pay on time they only want customers that pay higher interest rates or pay late so they can access some other fee. I too have a solid credit score and am in the beginning stages of refinancing my mortgage. Chase will not have the opportunity to receive. They may have buildings full of attorneys and that fine print disclosure somewhere may say they reserve the right to change the terms at any time but I hope they enjoy my 10.00 plus the 3 cents of interest they charged. Their practice is Unfair and Deceptive, do they not care about their Reputation Risk. I’ll just consider my $10.03 as economic reform and my contribution to the bailouts, or just maybe the $10.03 I paid can be used to buy their Executive Manager a cocktail at one of their retreats, so they can toast the Good customer’s they just ran off.
Credit Card reform is not enough.
on Jan 14th, 2009 at 12:40 pm
TJ, I did receive the printed notice, and the $10 was indicated as a finance charge (a rather unpleasant “gotcha” surprise in my statement, received around the first of December). I think I may scan a copy and post it for the world to see (even though I have mentioned in several instances that “finance charge” was indicated in the change in terms document). I’m glad that you were able to pay Chase off (although I have written a post outlining that that was one of the possible reactions on the part of account holders that would please Chase executives). Yes, your $10.03 will support a Chase executive’s ability to drink, dine, fly in corporate jets, and have all of the material things in life that he or she may want. They can exude wealth, lecture on leadership at universities, and appear on the covers or inside pages of business magazines. However, all of the tangible objects and benefits should be engulfed in flames rather quickly, should these same executives find themselves in hell. I am not to be the judge of that, but I certainly know that what Chase is doing, under the direction of these executives, is despicable. Thanks for posting.
on Jan 21st, 2009 at 11:52 pm
I’m in much the same spot as others in this discussion. I took out a loan on my Chase Visa two and a half years ago for 3.99% for the life of the loan. I also have an excellent credit rating, and have never had a late payment. I also have had my minimum payment raised from 2% to 5%, and a $10 monthly service fee added to the account. I cannot afford what this comes to for monthly payments, and cannot pay off the card. I’ve been told that my only other option is to switch to a rate of 7.99%, which would be “locked in” only until January of 2011 — after that, it’s through the roof. I have been making complaints to various interested organizations and individuals, and want to post that list here to make it available to others who might also want to complain (and who hope that some good may come of it). Here is that list:
Filed a complaint with the Comptroller of the Currency’s Customer Service Specialist (This can be done via email or telephone. I think they had a regular mail address, too — but I don’t have it.):
Customer.Assistance@occ.treas.gov
or call: 1-800-613-6743
Filed a complaint via email with the FDIC:
consumeralerts@fdic.gov
Contacted the U.S. Senate Committee on Banking:
http://banking.senate.gov/public/
Contacted the House Financial Services Committee:
http://financialservices.house.gov/
Contacted both of my senators:
http://senator’s last name].senate.gov
Contacted my representative in the U.S. House:
Go to: http://www.house.gov/ to look up yours
Filed a complaint at ConsumerAffairs.com:
This company gathers consumer complaints from the public, and makes that information available to the press and to lawyers (who might consider a class-action suit).
https://www.consumeraffairs.com/php/a_report.php
Contacted customer service at the company whose name is advertised on my card:
Mine is an Amazon Visa from Chase, for example. I figured they would be interested to know that Chase is damaging their good name by association. I also wrote to their CEO, Jeff Bezos at: jeff@amazon.com I don’t know how to contact Starbucks, or any of the other businesses affiliated with Chase’s card program, but assume that many of them would be interested, and displeased with this practice, too.
I am thinking of contacting the newspaper in my area, as well.
Good luck to whoever else Chase is screwing in this way. Once I can pay off my Chase cards, I will boycott them for the rest of my life.
on Jan 23rd, 2009 at 10:29 am
Lila, Wow! Yours is a “most excellent” post! Thanks for submitting this. I also appreciate the fact that you included “affinity partners.” I think any company with an ounce of scruples should denounce its relationship with Chase (if I were a large affinity partner, I’d be looking into a lawsuit for damaging my good name and brand). Take care.
on Jan 30th, 2009 at 1:09 am
Thank you so much for this blog~!
I just got off the phone with ### from the Florida call center and she was the most rude and patronizing customer service “supervisor” I have ever encountered. She sounds alot like one of my disgruntled ER coworkers then the waiting room is packed for 3 days straight and the sweet little old man who’s been waiting 10 minutes approaches the triage nurse in the 10th hour of her 12-hr shift with the ever-dreaded/fingernails-on-a- chalkboard question “Have you forgotten me?” (I actually posted her name but as I wrote this I realized how she must feel to be placed in such an impossible position so I ##’d it out).
Anyway…count me ditto on the theme of the above posts. I won’t be redundant except for the fact that I did’nt receive any notification of this change in terms unless it was hidden in the fine print of yet another harassment mailing to borrow more from them.
I thank you Lila for your post and Robert for starting this post. I fortunately have a balance that I can pay off and brush off my knees and walk away. However, the principal of this issue is worth standing up for. I plan to send complaints to all of those sources in addition to including it in my obamaforamerica blog.
I considered posting the details of a not-so-easy-to-brush-my- knees-off situation I have had with Chase. But I think I need to contact my attorney first. I have been sitting on a real estate fraud case for the past year because I didn’t have the energy to fight…but life’s stresses have eased up and I’ve been looking for the right community service opportunity to come up. Who knew it would come out of my unfortunate situation!? I want to see this bank held accountable!
I too watched the acquisitions in disgust as Chase…the star pupil walks away squeaky clean! Chase…the bank that harassed me for several years with their daily “borrow more” phone calls and junk mail that are the core of our financial disaster!
on Jan 30th, 2009 at 9:18 am
Maria,
I wanted you to know I appreciate your passion for this issue. I have seen your obamaforamerica blog as well (I turned this into a link for you). Some of the letters I have written have been to individuals who were associated with President-Elect Obama’s transition team (before he officially commenced duties as President).
I appreciated candidate Obama’s specific mention of credit card companies ripping off consumers in some of his campaign promotional messages. I wish somebody would take action now with Chase. I liked the way President Obama recently directly communicated with certain “bail out” executives who are living under what amounts to a corporate welfare program, bluntly informing them that they don’t need to be accepting delivery on new corporate jets. Regulation Z has given banks 18 months to engage in a continuous assault on credit card account holders, to the point where I am very concerned that a plastic meltdown, will follow the mortgage meltdown that triggered this current economic recession.
As an academic, I have worked next to economists and other experts who certainly are amazing in their ability to visualize data. You can almost look at them and see stock tickers, futures, oil and gas prices, and a host of other plotter-graphs going through their heads.
Yet all of that “brain power” on the part of economists running the FED, it seems that either ethics “have left the building” or there is a lack of common sense. This started because troubles in the housing market caused consumers to lose confidence. As we now approach a plastic meltdown, accelerated by Chase, which is attacking account holders who have been in good standing, surely now is one of the best opportunities in a long time for a return of common sense (and banks need to be heavily regulated, not coddled by regulators who evidently have no feelings for, or understanding of, consumers).
As it is a top post on my blog at this moment, you may be aware of the class action lawsuit that has been filed against Chase. Unfortunately, just like the 18 month period that was associated with Regulation Z, credit card companies still have way too much time to traumatize hundreds of thousands of other people. If banks are too imbecilic, mismanaged, greedy, and unethical to “get this,” President Obama should inform them of a simple fact (starting with Chase): when you attack consumers, the economy falls. Prepare for the next wave of economic turmoil, if his administration does not.
I appreciate your spirit of service both in your profession, and in your acts as a concerned citizen.
on Feb 1st, 2009 at 12:09 am
[...] don’t worry, boss, we’ll sign a few hundred thousand up with this promo deal, they’ll throw away their copy of the whole ‘ting. Then, in a [...]
on Feb 8th, 2009 at 9:57 pm
I too got the notice in November about the increase from 2 to 5% monthly payment and the $10/mo service fee/finance charge. I took advantage of a 0% APR for the life of the advance… (up front 3% charge capped at $75) maxed out the credit line on it and put it in a CD. Not surprisingly, I never use this card for purchases and I am never late.
Expected to see the charges on my January statement. Same as usual. Expected to see the changes on my February statement. Same as usual.
Is this just a bluff to get me to refi the debt? Or are they getting their *ss sued to the point that they are not enforcing the unethical changes?
Clearly any fee would break the 0% APR that they promised. I wonder if I’m the only one that they overlooked?
on Feb 8th, 2009 at 11:20 pm
Hi Matt,
All I know for sure is that Chase sends mixed messages. Chase spokespersons have insisted that it only “aimed at” people who were paying the minimum payment (but, as I have said elsewhere: “yeah right, like that’s a crime, to be paying your bills as reflected on your monthly statement”).
I have demanded that Chase back away from this, by apologizing and issuing a press release to the media. Maybe Chase is indeed backing away? At this point, it does not matter to me from a personal perspective, as I am tired of spending my life as an abused credit card account holder. It does not matter where I turn (or to hear their stories, where others may turn): you try to do your job, live your life, pay your bills, and take care of your responsibilities (for me I have two responsibilities in a secular context: my family, and my students), but somehow, that’s not good enough for these absolute unethical pigs who run credit card companies.
From a professional perspective, it’s my job to fight for would-be and present-day entrepreneurs. I happen to like that job, and I do not mind standing up for them on this issue. Credit cards are used by millions of entrepreneurs, and we need the small businesses that these individuals are struggling to start or grow. I am not saying that credit cards are a good idea; all I am saying is that entrepreneurs use them, a lot, and we need to find ways to nurture those entrepreneurs. One such way would be to make other means of acquiring capital easier, such that credit cards were not seen as such a logical, fast, and easy choice (at least until the entrepreneur is hopelessly trapped, like prey for a spider). Did I just say that credit card companies seem to treat account holders as prey? Why, yes, I did say that.
I mean, really, it’s unbelievable that Chase would try to put a “PR spin” against people who were “only” making their payments (on time, and in full — otherwise, they would be rate-jacked by now, into paying 30-something percent interest). Whether Chase is bluffing, or not, that does not matter to me, either. Even if I died as of this very moment, what has been written as it pertains to this matter, by me and by others, will live on. I would say that as it pertains to credit card companies like Chase (insofar as evidence I have seen is concerned), nothing, even if it is in writing, or in testimony, or letters, or from representatives on the telephone, should be trusted.
on Mar 5th, 2009 at 10:39 am
[...] relatively small percentage” has been killed in Iraq. I supposed, therefore, that since 780,000 account holders who fell for Chase’s acts of deception is only “a relatively small percentage” of [...]