Only Paying the Minimum–Not True in my Case with Chase.

In my last post about my appearance in Ron Lieber’s now published article (which included a mention of me, Dr. Robert Lahm) in the New York Times, I said I’d have a lot more to discuss regarding Chase’s claim that its changes “were aimed at those who had carried large balances for more than two years while making little progress in paying them off.”  In other words, according to Chase’s claim, it was targeting people who were only paying the minimum payment amount due as was printed on their monthly statements (like that should be a “crime” — I think we know who the real thugs and criminals are, here). 

Mr. Lieber’s article certainly quoted a lot of sources, reflecting diversity and various points of view.  So, even though I joked (during our phone conversation) about his intention to use all “23 pages” of material that I sent to him, I do realize that this blog, has a lot more space.  So here goes the extended version of my answer to the lame excuse Chase has offered for “aiming” at a group of account holders who simply were not paying more than they were required to pay, because they were promise that they had “fixed APR Until the balance is paid in full” (long-term, low rate), loans (that Chase simply did not want to honor anymore, for a lot of reasons, as compared to “no reason“).  Well, here it is, my rebuttal to the claim that was made by Chase:

1) Chase is not telling the truth as it pertains to me.  I have made “way more” than only minimum payments, over time (and as observed on the Internet, so have other people).  Nevertheless, it was Chase itself that established that minimum payment amount, all along.  And, even at the minimum payment level, Chase’s “excuse” was not a good answer because account holders were fulfilling their obligations.  In other words, even if account holders’ payment of only the minimum was Chase’s “big problem” with these accounts in some instances, it is irrelevant, given that account holders were promised low “fixed APR, Until the balance is paid in full” loans.

2) My balance transfer of $20,250 on September 5, 2006 has been paid down to a current balance of $11,759.74 (December 25, 2008 statement closing date), less a $235.00 payment made (electronically) on or about January 8, 2009 (thus, approximately $11, 524.74 after that payment was made — and therefore, as Mr. Lieber reported, “almost half…[my] Chase balance and [yet I] still got the same notice”).  This balance as of January 8, 2009 would not have been achieved by making only the minimum payment of 2% of the balance every month.  I use the word “achieved,” because I will celebrate the day when I have paid all of the debts associated primarily with the years I spent in pursuit of a graduate education (see more discussion under item 5, below).  Frankly, Chase should appreciate customers like me, who pursue the payment of their obligations with a true commitment and sense of personal ethics and responsibility, instead of attacking us so mercilessly.

3) Affected account holders are “entitled” to pay only the minimum (but as I said, as for me personally, I have paid more).  Before this word “entitled” gets flipped around by Chase, I would point out that it is entitled to certain benefits in the account relationship, too (if one can call it a relationship).  As for Chase, it is “entitled” to collect payments consisting of principal and interest on the loans (e.g., balance transfers) that it offered; in my case, at a “3.99% fixed APR, Until the balance is paid in full” rate of interest.

4) If an automobile purchaser paid only the minimum on a car loan, the finance company would not repossess his or her vehicle.  Further, someone with an automobile loan would never receive an absolutely barbaric monthly payment increase like the one that Chase has imposed in this situation, which also includes an interest rate hike.  The letters and spokespersons call it a fee. They (credit card companies in general) like playing with words, but as I pointed out to the CEO, Gordon Smith (December 3, 2008), I actually think that for once, Chase’s lawyers made a strategic oversight with its own “fine print,” because the actual change in terms notice definitely said: “finance charge” — several times! 

5) The reason I have debts, personally, is that I decided at mid-career to go to graduate school, with a sincere interest in trying to help people.  I have a student loan, though the U.S. Department of Education, and other loans, including a mortgage and a vehicle loan (which I purchase clean and in good condition, but used).  Although it will still take several more years to pay that off (my student loan and all of my loans combined), the Chase account under discussion here (as detailed under item 2) is at a lower rate than other long-term loans.  Any financial adviser (and I am surrounded by qualified university colleagues who would agree), would suggest paying those loans with the highest interest rate, first.  My own Chase account is associated with the lowest long-term rate that I have among my other obligations.  Therefore, why would I go against the advice of financial professionals and pay Chase off first?  (I might add that one needn’t be an expert to figure this out, and every expert on every call-in show gives out this same advice: pay the loan with the highest interest rate, first.)

6) I can prove my claim that I paid more than the minimum (I have statements, et al, if the present balance of approximately $11,524.79 entails calculations that Chase can not grasp).  Chase, on the other hand, has claimed that it ”aimed at” those account holders who have made “little progress in paying them off.”  Okay, well, in keeping with that claim, Chase missed, when it aimed at me!  However, the plot thickens: Chase could now argue that I “fell through the cracks,” or, it made a mistake and its “computer” selected my account by accident – “Oh, we’re sorry — just an erroneous computer glitch.”  Nope, if that was the case, then why, after what should have been a “human review” of my account and payment history, given that I have been corresponding with representatives at the highest level, did Chase send me the same form letter (widely discussed on the Internet), offering the same 7.99% “alternative” that everyone else is receiving?  No thanks, on doubling my interest rate, I will not fall for that trick, no matter how miserable you made me feel (especially over the holidays, which were stolen from me and my family, this year).

7) I’m not the only one who was paying more than the minimum.  These accounts are not associated with “sub-prime” borrowers.  One can easily discern that this is an act of “blowing smoke,” on the part of Chase, given that individuals with low credit scores would have never been considered eligible for promotional offers at attractive low rates of approximately 2.99% to 4.99%, in the first place (which Chase has decided it doesn’t want to honor, anymore).

Chase is continues to “hunker down” as evidenced by its misrepresentation of facts, obfuscation, and its failure to tell the truth on numerous occasions in several venues.  Its actions have now led to the filing of a class action lawsuit pertaining to this change in terms agreement.  The Mr. Lieber did not bring this to my attention.  Rather, I sent the direct link about the lawsuit in my email to him (thanks to one of the many new friends I’ve found here, who gave it to me, first).  I’m sure that Chase already has, or will soon be accepting service on this suit, but for the convenience of ChangeInTerms.com readers, I am providing a link in this post as well.