I think the reason Chase is doing this is they are trying to prop up the asset-backed securities that funded these balance transfers. Now the bond will post significant prepayments (something Wall Street typically doesn’t like), shrink in outstanding balance, but also pay more interest on the remaining balance to the support tranch investors. In the end, Chase will have better valuation of these toxic assets on its balance sheet.

None of this, however, condones the unfair credit practices they are using to achieve this end, and I do believe the courts and administration will severely chastise them for going too far.