Considering that this (February 13, 2009) post that I have found entitled, “Chase Raises Minimum Payments on Credit Cards, Adds Fee,” is on a website with the name, The Truth About Credit Cards.com, I see some irony. Quoting from the article, we note that the Chase corporate line has been used abundantly:
In an effort to crack down on consumers who hold large credit card balances, but don’t seem to make any progress in paying them off, Chase has upped minimum payment requirements and added a related fee.
The credit card issuer notified hundreds of thousands of customers who carry balances and hold low promotional interest rates that a $10 monthly fee (that accrues interest) will be added to their accounts going forward.
Additionally, these customers will be required to make larger monthly minimum payments; instead of 2% of the balance, 5% will now be required each payment cycle.
That’s a substantial jump in minimum payment, as those targeted by the policy have been known to hold large balances for over two years with little repayment, according to a Chase spokeswoman who spoke with USA Today.
But apparently Chase is offering customers who phone in a second alternative, a higher fixed APR set at 7.99% (is it really fixed?).
Let’s take this in order of first appearance, starting with, “don’t seem to make any progress in paying them off.” As I have documented, this is not true relative to my account; see my post entitled, “Only Paying the Minimum–Not True in my Case with Chase.”
It’s also not true relative to many other account holders; see the earlier post and analysis entitled, “Chase “aimed at” account holders who were only paying the minimum? Someone must need new eyeglasses.”
Regarding, “customers who carry balances and hold low promotional interest rates that a $10 monthly fee (that accrues interest) will be added to their accounts going forward,” I am trying to resist outright sarcasm. Unfortunately, this passage is so blatantly absurd, I’m finding it difficult to avoid a “duh!” A $10 monthly “fee (that accrues interest)” means that the promotional rate has been violated, as once new “finance charges” are added and “accrue” (see my posts illustrating Panel 1 and Panel 2 of the actual change in terms notice), the new rate is higher than the promised rate. This also means that “the truth about Chase” is that according to numerous class action lawsuits, it violated Truth in Lending laws.
As for “those targeted by the policy have been known to hold large balances for over two years with little repayment,” I’ve already addressed this above. However, I’d like to reiterate some of the points made in earlier posts. For one, it is irrelevant how big or how little the payments may have been from account holders who have at least made the minimum monthly payment amounts that were printed on their statements. This applies to every customer who was “targeted,” because if those customers had not been making at least their minimum monthly payments, they would have already been converted to usurious default rates.
Further, it remains extremely insulting, especially in these challenging economic times, that account holders who have been making their required payments (and therefore meeting their obligations) would be portrayed in a negative light by Chase. Rather, those of us who have been “hit” by Chase were deceived by a false promise of a “fixed APR Until the balance is paid in full” loan.
To disparage individuals who were previously selected as Chase’s “most Valued Cardmembers” as anything less than sterling examples of cardholders who take managing their responsibilities seriously, is indeed, irresponsible and reprehensible. I hope Chase is punished for this and I consider what it has done to be one form of damage that it has inflicted upon me and other account holders. (Not being a lawyer, I do not wish to interpret nuances of defamation, but I find myself intrigued by the notion that this legal term might very well be applied to describe the situation here.)
Relative to a “a second alternative, a higher fixed APR set at 7.99%,” since I was quoting from the top of the above referenced post, I am not sure what the “first alternative” would have been, but I expect it was the “demand note” attempt on the part of Chase to collect the entire amount owed and close the account in order to avoid the changes. Nevertheless, switching account holders to the higher 7.99% rate in exchange for allowing the account holder to prevent the gargantuan increase in the minimum monthly payment is alleged in class action lawsuits to be consistent with “bait and switch.” Also, the 7.99% rate is for a limited duration. Finally, to present an interesting caveat, is the fact that Chase might then turn right around later, and demand a 5% minimum payment once the account holder has agreed to the higher rate!
Notwithstanding any determination one way or another through adjudication, Chase’s new 5% minimum payment demand is certainly coercive. It enriches Chase and hurts account holders. It places customers in harm’s way of being unable to remain solvent because that payment increase (multiply an account balance times 2.5) is so onerous that it would make a loan shark’s mother proud. In the event that the account is held by a small business owner, or a person with a family (like me), then it will have consequences that will reverberate to impact many more persons than just the account holders themselves.
Not addressed in the post under discussion here, is the truth about “opt outs.” The ”truth about Chase’s executives” is that they testified before Congress and used a discussion about an “opt out” to illustrate the means by which Chase treated customers “fairly.” As described, an “opt out” would allow customers to reject the new terms and ”if they wish, they can opt out and close an account and pay off the balance at the old interest rate over time.” Since there is no opt out, then one is led to conclude that Chase executives obviously lied in presenting such a portrayal. I maintain that the issue of a missing opt out is the most dangerous precedent of all (as other credit card issuers are definitely watching Chase, to see if it can get away with this).
The “truth about Chase” is therefore as follows: it is engaged in a campaign to “pull the wool over the eyes” of the media, website publishers, Congress, other account holders, and me. This constitutes a failure on the part of its leadership to demonstrate competence in managing the long-term reputation of Chase. Such behavior is an affront to shareholders, account holders, and stakeholders, including taxpayers who have forked over $25 billion in bail out money to a financial institution that has demonstrated negligence due to its extremely unethical actions (thus all Americans certainly do, in effect, own shares).
This is why you should “join the fight” and the reason ChangeInTerms.com has declared in a message to credit card companies:
NOW WE’RE COMING AFTER YOU
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on Apr 1st, 2009 at 10:53 am
[...] Chase did not give account holders an “opt out” despite previous Congressional testimony (through which Chase’s executives used opt outs to illustrate the means by which account [...]
on Apr 22nd, 2009 at 6:26 pm
Have you seen the commercial spoof about the credit card minimum payment increase?
Check it out at:
http://www.youtube.com/watch?v=vt-a_8LYzrw
on May 16th, 2009 at 9:28 am
I was also “blessed” with a Chase Credit card and their increase. I sent the following to John McCain, Jon Kyl (AZ’s senators), Ed Pastor (one of AZ’s congressmen), the AZ Republic (Phoenix’s major newspaper), and all the TV channels:
It’s really funny !! Chase has an advertising campaign now running that says “Chase picks up the tab” Hilarious !! It was the consumer, the taxpayer that picked up the tab with the bailout and now Chase turns around and screws millions of credit card users with the following: they are unilaterally, unconditionally raising the minimum payment from 2% to 5% of the balance undoubted forcing thousand to fall behind !!!!
I can understand banks saying
“Look, if you want to borrow MORE money, here are the rules FROM NOW ON”,
I can even understand banks saying
“Look, AS PER AGREEMENT, we are increasing your rate because you are in default”
but I cannot go along with banks unilaterally changing the rules just because they want to. Here is a case: Chase Bank advised me in March that my monthly payment had been increased from $214 per month to $528. Period. No if’s, but’s or anything else. I filed a complaint with the O C C and Chase stands its ground. Their response is “We told you so in November.”
Imagine that I went and stole my neighbor’s car then in court simply said “Hey!! I told him I would some day steal his car. He did not do anything. That means he agreed to it!!!”
I would like to preface the details by stating that the change is no stress on MY budget. However, I am certain Chase is doing this across the board and most families WILL be stressed by such a change. Here are the details.
In 2004, Bank One, subsequently purchased by Chase, sent me an offer to lend me up to my Visa’s credit limit of $25,000 at a rate of 3.99% UNTIL PAID OFF. I went ahead and took out the $25,000 for an investment and have made every payment on time since 2004 (but have not used the credit card since that day). I have no credit problems, my FICO is well over 700. My March payment was $214 and my outstanding balance $10,563.
When my April statement arrived, it included a new “service charge” of $10 per month (on top of the interest charge) and a minimum payment of $528 !!! I immediately called Chase to ask what they had been drinking. The rep advised me that if I closed the account they would remove the $10 monthly “service charge” but that my minimum payment would remain at 5% of the outstanding balance no matter what I did.
I emphasize the fact that I have NOT used the credit card in recent times because, sometimes, banks send you some notice in small print saying that if you use the card after a certain date, you AGREE to the change(s). But I have NOT used the card. So even that “trap” does not apply.
I filed a complaint with the O C C and received a reply from Chase dated April 15 basically restating their position and offering to go back to the lower payment if I agree to refinance the balance at 8 % !!!!!!!!!
If this is legal someone has been sleeping on their legislative job and they need to be awakened so they can pass a law prohibiting this. This has to be a heavy burden on tons of families in this country, especially with the economy the way it is. Here we have the banks being bailed out with tax payers money and one of the big ones turned around a wants to crucify the public !!
on Jun 23rd, 2009 at 5:00 pm
I have a loan on a promotional interest rate. Several convenient checks were
used with a very small interest rate. These checks were issued with the stated
term: ” until balance is paid “. What is Chase doing to their customers? I am still receiving offers with conventient checks. I have excellant credit, Never been late
with payments. Credit line of $25,900.00 What if i used my total available credit
at this time which would be $20,487 than I would have a balance near my credit line. The new pmt would be so high, I couldn’t possible pay it. Why can we not
believe what Chase promises us?
on Jul 26th, 2009 at 6:08 am
I received the same letter that my payments on an $18,000 promotional balance would increase from 2% to 5%. I have been laid off of work for 9 of the previous 13 months, and this is going to be the straw that breaks the camel’s back.
A month later we received a letter that our credit limit had been INCREASED from 21,000 to 26,000 dollars! I suspect that now they want me to get some cash advances at an exhorbitant interest rate to make the $900 monthly payments with!
on Jul 26th, 2009 at 10:56 pm
You can read the solution to Chase Banks minimum monthly payment raise on networthiq.com under redtoblack. The final solution is to do the Dave Ramsey. 1) Pay it off 2) Close the account 3) Destroy the credit card in a creative way (referred to by Dave as a Plasectomy).
on Jul 31st, 2009 at 11:06 am
GOOD NEWS?? I just got off the phone with Chase, who called me after having been contacted by OCC regarding my complaint. Unless I misunderstood (and I asked her to repeat this several times), they are reviewing my account with the intention of offering me a fixed dollar amount monthly minimum payment amount at AN APR EQUAL TO OR LOWER THAN THAT I HAVE NOW (which is 3.99%). The goal would be to get the loan paid off in less than 5 years. She mentioned a possible 2% APR (Yes, APR, not minimum payment). I would really go for that–but maybe this is a come-on to mollify me while they figure out a way to keep me from complaining.
on Aug 11th, 2009 at 1:34 am
Unfortunately, The President, Congress, The senate and so on has not done enough for the American people to prevent this foreseen event. In these hard times in regard to the economy, health care crisis and rising unemployment, This is an unnecessary evil! No good can come from it. Chase is so arrogant, They can’t see that it’s self destructive! It will force many if not most families into bankruptcy, Hence resulting in no payment to Chase that will in turn defeat it’s own purpose. Then what are they going to do, Ask for another bailout at the expense of the very same people that they destroyed? This will hurt me but not destroy me. I will just liquidate my already devalued investments, Pay off most of my remaining debts and close my Chase accounts. Sure it will hurt my credit score but I will have peace of mind just knowing that Chase will no longer have the upper hand over me and mine. In the meantime, We the people should not stand passive and take the punches, We need to stand up and fight for our rights and lively hoods. This will undoubtedly tilt many people over the edge! It’s going to take hard work on our behalves, But it’s something we can not afford to let run it’s course. Wake up people!
on Aug 26th, 2009 at 1:42 pm
I received my monthly bill today from Chase Bank with the 150% increase for my minimum payment. The terms I agreed to is what I can manage, what can I do?
on Aug 26th, 2009 at 2:18 pm
I too was sent a letter changing the min. payment from 2% to 5%. I called chase and was told not only would they not change it back to the 2% payment. I was also told that chase has the right to raise the promo int. rate to any rate chase felt like for any reason or even if there was no reason, even if it was a promo rate until paid in full.
on Aug 29th, 2009 at 7:18 pm
Is anybody looking into a class-action lawsuit? Also, I am surprised nobody is raising hell with their politicians. First they make laws with huge loopholes. Then they are quiet when banks use those and go around robbing and stealing. Are they on JP Morgan Chase’s payroll?
@Kim. What they told you is obviously not true – that would be a violation of the Truth in Lending Act.
on Sep 14th, 2009 at 9:49 pm
I filed a complaint with the OCC a few days ago, and will write my congressmen shortly. But I’ve noticed some of you have already notified your legislators of this travesty purpetrated by Chase. What feedback did you get from your legislators? If they or someone on their staff would just google “chase minimum payment increase” they would certainly get a clear indication of the public sentiment. So why haven’t I heard about anything being done or for that matter if the matter is even being looked into.
Let’s all keep buggin’ ‘em!!
Mike in Detroit
on Sep 17th, 2009 at 3:25 pm
We received the statement with increased rate and I called
the person on the phone stated that the changes were due to the new law that congress passed. I was getting ready for all of my cards to increase but now I find that it is just chase. They want defaults, then they will get a bailout. Congress should make it clear that there will be no bailout.
on Sep 17th, 2009 at 3:47 pm
How does it go…Caveat Emptor (buyer beware)? As consumers we all have choices. If the nice folks at Chase believe they might secure more bailout money after the vast majority of affected cardholders elect bankruptcy, Chase may come out smelling like a rose. I personally also received the 2 to 5% increase, thank goodness I only have a few thousand with them, but I will not give them one more red cent. There is an option in the industry called “settlement” and if they get NO payment, after a few months, toss them a bone and see if the wish to settle. It works like a haggle game, and you can get it down to penny’s on the dollar. Prior to doing this you need to ensure you have another creditor that can accommodate a new loan for you, preferably with fixed rate and length of repayment. IT WILL negatively impact your credit score, but you will not have to file Chapter 7 or 13 Bankruptcy which has an even more negative impact on ones credit score. Bottom line, Chase has acted like the oil companies and jumped on the run away freight train of greed in our wonderful country and unfortunately the consumers who have no other credit worthiness will be left without. Of course the settlement is also an option providing folks can wait them out. Historically when folks default and don’t make the payments, that is generally a red flag to the creditor (Chase) that they believe their consumer is either deceased or will soon be filing on them…hence the settlement option (because a bone is better than nothing). I think each and every impacted consumer should not only sign up for a class action lawsuit, but also shut them off and not pay them back anything (or settle). I wonder? Do you suppose they might just completely fail – - like so many other mismanaged financial institutions nation wide? If enough people avoid giving them any business, it will happen!
on Nov 1st, 2009 at 10:45 pm
[...] the dreams of approximately one million customers by mercilessly squeezing them through its onerous “2% minimum payment is now 5%” change in terms, I say [...]
on Dec 15th, 2009 at 9:42 pm
it’s not only Chase. I just got the same letter from BofA.
I will have to now spend hours digging out the boxes of old paperwork to prove the deal — which at 7.99% fixed doesn’t sound as good as it did some years ago, but a deal is a deal.
on Jan 4th, 2010 at 1:16 pm
I never understood how they can double the minimum payments on people who are barely treading water as it is. The concept makes sense for people who really want to pay down their cards. But for the consumers who have very little to no means now it doesnt help at all.
on Feb 1st, 2010 at 12:54 am
Let me start with saying that I have never posted anything on any site in my life. Honestly, I am HURT! I have always “done the right thing” My credit may not be perfect but it has remained at 650 plus. Which is not to bad concidering that I do not make much money. I have a child that has had three brain surgeries, has C.P. and learning disabilities. My credit has always been a priority!!!! I managed to by a small condo and provide for my family. I have had my chase account for 23 yrs. and honestly I am proud of the fact that I have not had any late payments. I was out of work for 6 months and still no late payments. I recieved a letter from chase that they were going to lower my credit availability from 10800. to 5400. WHAT????? I owe 5100. Sayig that it was because of recent credit activity. I pulled my credit. No activity???? Before I had a chance to call and find out what was going on I received another letter that my account has been closed. I am to continue to pay until the card is paid in full and all rules will still apply. WHY! Because total available credit is to low!! ARE THESE FOOL SERIOUS!! I have been in tears for days. If I were to have a true emergency…. I would probably loose the few things we have. Maybe doing the right thing isnt the right thing anymore. Can anyone suggest who to contact and how? I am humbling myself in that I truley do not know where to start.