I’ve noticed a slew of new reports about Chase’s egregious actions against its best customers. Here are a few stories from today -
WXIA-TV (Atlanta) – JP Morgan Chase Adds $10 Fee to Credit Card Accounts
Excerpt: “The company says it plans to add the 10-dollar-per-month fee to customers who have low promotional rates, and those who have carried large balances for more than two years and haven’t made progress in paying off their balances.”
WTAE-TV (Pittsburgh) – Call 4 Action: Chase Adds Fee For Low-Rate Credit Cards
Excerpt: “At a time when many consumers can least afford it, JP Morgan Chase, the country’s largest issuer of credit cards, is ordering some of its cardholders to pay more….
Such tactics are emblematic of an industry in financial trouble, according to University of Pittsburgh business professor Jay Sukits.”
“A representative for Chase said the change affects less than one-half of one percent of its accounts, adding, “Those who are impacted have carried large balances for over two years while making little progress in paying them off.”
Delaware Business Ledger – Chase credit card fees on balance transfers drawing flack
Excerpt: “The Wilmington-based credit card business of JPMorgan Chase is coming under fire for fees and higher minimum payments for some customers.”
WCPO (Cinncinati) – Credit Card Rates Soaring…Even if you Have Good Credit
Excerpt: “But banks — struggling to survive in this credit crunch — are raising interest rates on even their best customers, according to a recent report in USA Today.
The report says Chase Bank is going a step further: adding a $10 monthly fee to many Chase cards.”
The Dallas Morning News – More Consumers Find Credit Card Terms Changed as Issuers Cite Rising Risk
Excerpt: “ Chase notified customers in December that it was raising the minimum card payment from 2 percent of the unpaid balance to 5 percent and was adding a $10 monthly fee that would start with the January billing cycle.…By raising the minimum payment by over 150 percent on short notice, effective in January – when most folks are on a tight budget – they effectively force people to accept their alternate offer,” she said. “I believe their timing was deliberate – the timing of the mailing of the disclosure during Christmas rush and the effective date of the change.”
USA Today – Chase adds fee for low-rate credit cards
Excerpt: “Cash-strapped consumers can’t seem to get a break from high credit card fees and rates.
In the latest fee rolled out by a bank, JPMorgan Chase, the nation’s largest card issuer, has begun charging hundreds of thousands of borrowers a $10-a-month, or $120-a-year, fee. Industry watchers say the fee is unusual because of its size but also because Chase is adding it to borrowers’ monthly balances, where it accrues interest. The bank is also raising the same consumers’ minimum payments to 5% from 2%….
…The change affects consumers with low promotional rates who have carried a large balance for more than two years and made little progress paying it off, says Chase spokeswoman Stephanie Jacobson.”
Notice how in nearly every report, Chase continues to perpetrate the myth that these changes only affect consumers who carried a large balance and made little progress paying it off. In fact, in my case and in Dr. Lahm’s case and my guess is in the majority of other cases, significant progress was being made in paying off the balance. I borrowed $38,400 three years ago and the balance when the change-in-terms was enforced was slightly above $20,000 – nearly half paid off. I think paying off $18,400 was making significant progress.
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on Feb 10th, 2009 at 12:33 pm
I had paid off over 50% of my transferred balance in just about 2 years.
I owed 17,500 from an original balance of 36K.
Either I was incorrectly included or they are liars in addition to being crooks.
I’ll let others judge.
on Feb 10th, 2009 at 6:37 pm
Well, Marv,
As you know from the posts that I created (including the “Case Against Chase” report), I’ve paid my original balance down as well. Humm, do you think it is more likely that you are lying, and that I am lying, or that Chase is lying?
I think we know the answer: Chase has told more lies about this issue than I would have ever imagined (and I know from people emailing me and from other sites and “rants” that we are not the only ones who have made great progress — but again, it’s not really even relevant because Chase set the minimum payment amount, and it is not a “crime” if that is all some others did pay). Thanks for your posts.
on Feb 10th, 2009 at 9:33 pm
I thought it important to note that tonight my wife got a 3.99 offer from Chase in the form of checks. The rate is good until Feb 2011. The only fees stated are a 3% transaction fee. No repayment terms or other fees are mentioned. I wanted to call them to find out the repayment terms and perhaps get it in writing (which they will never do), but I don’t want to jeopardize my wife’s account. I may try and bluff and say I received it.
This is another Chase grab. I wrote Glasny asking if they could issue a cease and desist due to the pending litigation. This would stop Chase from sending out any offers…I would think. I have also written my congressman and state senators….
on Feb 10th, 2009 at 9:41 pm
Hi Sid,
I am faxing as many of the House Financial Services Committee Members as I can, tonight. The link is:
http://financialservices.house.gov/members.html
The reason is, supposedly Chase CEO Jamie Dimon is to appear this week. I would at least like to hope for the possibility that one of our elected representatives asks about this change in terms issue with Chase.
I received (and answered) your email. My wife got a 4.99% offer this week as well. Have not had time to post that yet (it is “Priceless!,” though, isn’t it!). Kind regards.
on Feb 10th, 2009 at 10:00 pm
Excellent, Dr. Lahm! I will also fax as many of the House Financial Services Committee Members as I can.
I think it’s safe to assume they don’t like to read. So, I’ll keep my message short and simple. I think what my fax will say is:
“In 2008, Richard Srednicki, the CEO of Chase at that time, was called before the US Senate Committee on Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations to give testimony about his company’s credit card practices and to argue that regulation of the credit card industry was not needed. According to the transcript of his testimony, when asked about how his company goes about changing the terms of his customer’s credit card accounts, Richard Srednicki said that Chase would, ‘provide that customer with an ‘opt out’ option. This means that the customer may reject any change in terms, close their account and pay off the balance under their existing terms.’ But, in November of 2008, Chase notified approximately 500,000 customers that their minimum monthly payment would be increasing from 2% to 5% of the outstanding balance and Chase would start assessing them a $10 monthly service charge (a finance charge) effective January, 2009. These customers were >NOT< given the option to opt-out. Perhaps you could ask Chase CEO Jamie Dimon when he appears before you this week … WHY?”
What do you think?
on Feb 10th, 2009 at 10:09 pm
Hi Chris,
This is part of my letter/fax (below). Yours is excellent, but the “finance charge” versus “service charge,” “fee” (whatever else they try to call in in the PR spin) is a very, very important point (so adapt/borrow as you see fit):
Chase spokespersons (and other correspondents in letters) keep calling a new $10 monthly charge a service charge; but, the whole truth is as follows:
Chase spokespersons as well as correspondence from Chase (and reports from consumers attempting to negotiate by phone) are insistent on calling a new $10 monthly charge, a “service charge,” but according to the change in terms notice: “The charge is $10 per month ($120 total annually), and it is a finance charge.” Thus, the promotional rate has been violated.
on Feb 10th, 2009 at 10:12 pm
P.S. You may have noticed a link to contact the whole committee. This is the text that I used for that:
—-BEGIN—-
On April 3, 2008, I testified for a hearing of the U.S. House of Representatives, Committee on Small Business entitled, “The Role of Credit Cards in Small Business Financing.”
Somewhat ironically, I am now a victim, too, of credit card company abuses. I am sending you information in the form of links on a website that I have created in protest against Chase bank for its recent egregious actions against me (via a change in terms notice), and what I have estimated to be several hundred thousand other account holders:
http://ChangeInTerms.com
Chase has imposed a brutal monthly minimum payment increase. I am an academic at Western Carolina University, and my payment on an account that had been around $240.00 per month will increase to almost $600.00 per month. Unfortunately, I was employed last year at Middle Tennessee State University, and my home back in Tennessee is languishing in the real estate market. Thus, it is even harder to swallow Chase’s act of coercion (Chase has offered account holders the “option” to give up a previously promised promotional rate, in exchange for a new finance rate – double in my case – and monthly payments that are closer to what they had been).
I have seen news reports indicating that JP Morgan Chase CEO Jamie Dimon is scheduled to testify before the House Committee on Financial Services, and I am asking you to please consider the fact that Mr. Dimon’s bank has imposed changes that are completely contrary to previously delivered testimony regarding “opt outs” and treating customers “fairly” (i.e., changes are unfair and provide no “opt out”).
My site’s “Press” page (http://www.changeinterms.com/press-members-of-the-media/) has additional information about my personal battle with Chase. I believe that the letters and other documents tell a story that needs to be brought to the attention of your Committee Members. For example, Chase spokespersons (and other correspondents in letters) keep calling a new $10 monthly charge a service charge; but, the whole truth is as follows:
Chase spokespersons as well as correspondence from Chase (and reports from consumers attempting to negotiate by phone) are insistent on calling a new $10 monthly charge, a “service charge,” but according to the change in terms notice: “The charge is $10 per month ($120 total annually), and it is a finance charge.” Thus, the promotional rate has been violated.
The actions by Chase described in my letter(s) and “issue backgrounder” report (all on the site) will most certainly put me, my family, and thousands of others in harm’s way financially (the notice to account holders stated that changes would take effect as of January 1, 2009). Please see:
http://changeinterms.com/pdfs/CHANGEINTERMS-THE-ISSUE-BACKGROUNDER.pdf
If anything that I can do to aid the Committee, please contact me.
—-END—-
I have turned the above into a post on the home page.
on Feb 11th, 2009 at 4:47 pm
To your original point, it is almost impossible for it to be true that these customers did not make significant progress toward paying off their debt. The reason is simple. To get slapped with the fee, you have to have had the balance transfer at the low rate for 2 years, and you have to not have been charging other purchases at the higher purchase APRs. Simple math tells you that if you are paying a 2.99% APR, and are paying a 2% per month minimum payment, then after 2 years with no other charges, you will have paid about 1/3 of the debt off.
on Feb 11th, 2009 at 5:13 pm
Thank you, jj,
One other thing that is very simply: Chase seems to think we can’t read, either. Chase should observe the following, as stated in the change in terms notice, I quote (panel 2 of 2):
“The charge is $10 per month ($120 total annually), and it is a finance charge.” Thanks for your great comment!
on Feb 13th, 2009 at 2:29 pm
[...] As other posts here have observed, Chase PR spinmeisters have largely been successful with members of the media, minimizing the issue of its change in terms, by portraying that: [...]
on Feb 16th, 2009 at 11:49 am
[...] also have a comment here on the site from “jj” regarding the simple math involved in determining that even at the 2% of the balance monthly [...]
on Mar 3rd, 2009 at 4:50 pm
2 years ago I transferred a $4000 balance at a fixed 4.99% rate. Today I owe less than $1600 (60%) and I am also hit with the $10/month fee which changed my APR from 4.99% to over 12%. I also paid a balance transfer fee 2 years ago of 3%. I am infuriated and I can only imagine how others who have much larger balances like Dr. Lahm feel. I contacted multiple firms today. I sent out an e-mail to Lou Dobbs, the New York Times, LA Times and my two Senators in California. This is an absolute outrage, I cannot imagine why on Earth a credit company is seeking to penalize and get rid of the most responsible credit consumers.