TZ tipped us to the increase, saying it happened to him. He also pointed us to this page on ConsumerAffairs.com where dozens of customers have posted complaints. A sampling:
"I have a Chase credit card that has a low fixed rate of 2.99% until paid off. Today, I found out that Chase is now charging me an additional $10.00 monthly service fee and is raising my minimum due from 2% to 5%."
* "Change in terms of a agreement for a rate that has a added fee of $10.00 to carry the card that I did not sign up for when the orignal purchase was made."
* "I recently got a lifetime balance transfer offer for 4.9% from Chase banks. I paid the 3% NO LIMIT fee for my $20,000 balance to lower my debt at a long term FIXED (as described in the offer) rate.
After meeting ALL their conditions, and making timely payments as required, chase has now more then DOUBLED their minimum payments and now charges a $10 monthly fee. The only way to avoid this was to take a 3% higher rate that they offered (7.9%),
If I don't make this large increased minimum payment, I will default on the loan terms and they will increase my rate significantly..... thus making the 3% I paid a few months ago worthless."
Where financial health is concerned, current minimum payments are really too small in the first place, so if you can at all afford to pay more than the minimum you should do it. In other words, we're not against bigger-than-minimum monthly payments in general.
What we are against, however, are credit card companies changing their terms in such a drastic way, especially in an economic climate where most customers will not be able to easily move to a competitor.
If this has happened to you, you'll probably save money if you cancel the card completely and pay it off under the original terms of your agreement. Closing the card will ding your credit, but it will also prevent Chase from sucking extra money out of you—money that could be used to pay off that debt, in fact.
Chase Credit Cards [ConsumerAffairs]
(Photo: DerrickT)
Update - Chase Agrees to end $10 Monthly Fee:
[www.nytimes.com]
this was something most anyone thinking about it ahead of time. rather like the "OMGBONUSES" all over the news now was a total no brainer expectation before the bailout was approved.
jail time for all so far as i'm concerned.
]]>Gerald A. (Gordon) Smith, CEO - JP Morgan Chase Card Services
Phone: 302-282-3100
Fax: 302-282-3939
E-Mail Address: gordon.smith@chase.com
1) The mailed balance transfer checks and the marketing material attached to them closely resembled (or are nearly identical to) previous balance transfer checks and attached material. Users of previous checks had not experienced an immediate change in terms ($10/month fee and a forced accelerated payoff schedule) after using the checks. It was therefore reasonable for users of the checks to expect that there would be no changes in terms and that the terms of previous loans would be sustained following the new transaction. Nothing in the materials suggested that a change in terms would follow as a result of using the checks.
2) Only users of the mailed checks were subjected to the changes in terms, and the notice of this change was given immediately after use of the checks. This suggests that Chase had intended to use the checks as a mechanism to trick customers into a change of terms.
3) The fact that so many customers disapprove of the change of terms shows that they would not have agreed to use the balance transfer checks had they know of the coming change of terms.
4) The $10/month service charge was applied only to those that used the checks. This amounts to an additional charge of interest on the loans and is inconsistent with Chase's claim that the loan had a low, fixed interest rate.
5) The new terms trumped old agreements favorable to Chase's customers. For example, customers were permitted to pay as little as 2% of the balance per month at the low rates offered previously. This allowed them to enjoy the lower rate for a longer period of time. Customers also were not forced to pay a $10 month fee.
6) Chase should and would have known that customers would normally decline to use the checks if the customers were aware of the new terms.
In light of 1-6 above, it seems plausible that Chase intended the mailed material to deceive their customers and induce them into an arrangement with Chase for the purpose of enriching Chase. The expectation that customers would be fooled into using the checks is supported by Chase's alteration of terms only of those using the checks and by the checks' resemblance to previous checks. Had the changes in terms been broadly applied to other customers, Chase might argue simple coincidence, but such changes were not broadly applied. This shows that Chase targeted a group of customers.
]]>More info on this issue here:
http://www.ChangeInTerms.com/
(I have no affiliation with this site, but this guy seems focused on this very specific issue w/Chase, so am providing the link here).
As well, the following two law firms are exploring class-action lawsuits about this:
http://www.pinnaclelawgroup.com/
http://www.gslawny.com/lawyer-attorney-1383679.html
(No affiliation w/these either -- just providing the links for others).
]]>Try this on for a reason to turn like the dogs they are on their customers:
It is my suspicion that Chase is willing to force as many accounts as possible to go into default and/or closure as a means to justify (more) money from the "Bailout". I would like to see Washington conduct some sort of investigation into this possible abuse of Federal funds and banking practices.
If a company is mismanaged it should be allowed to fail. The pattern of abuse has already been established. Why would anybody think it would change? Washington should not punish the consumer while rewarding the failing mismanaged companies, nor should it let another penny go without strict oversight.
This is NOT stimulating me, it is only encouraging me to NOT SPEND and to look for another way to find financial relief.
This "Bailout" was a VERY bad idea. How is this helping the consumer or the economy?
I have written to my Congressman, Senators and the Office of the Comptroller of Currency to complain (they regulate the banks). I suggest everybody do the same.
Push the "bailout" theory, that probably is the stimulus behind this treachery and let Washington know just how bad they misread the solution.
]]>Chase is absolute slime. My account with them started in 1993 as a First Card Visa, then becoming Bank One through merger, and now it's merged again to Chase. As soon as Chase took over the account in March 2005 (never one late payment, never over limit from 1993-2005) they increased the APR to the default rate of 29.99% and absolutly refused to lower it even under threat of closing the account. I carry a balance on this card and was not previously in a position to pay it off, but it's been paid down to where it's now within $2K of zero. They've been so VERY generous in slowly reducing the APR (27.99% currently), but within 30-60 days the balance on the card will be paid in full. Zip. Nada. Paying off this card will be like the scene in Jeepers Creepers where the nasty winged creature gets hit in the chest with the harpoon... hehehe... SCREEEEECH! (sound of zero balance hitting account!) Anticipation is so sweet....
]]>@ArcanaJ:
no, it doesn't. You are Ubercool!
]]>I long ago swore off Chase for any banking, especially credit cards. I had a credit card account and two charges showed up I did not recongnize. Unlike my other cards, when I filed disputes Chase acted as if "I" had done wrong and had to prove to them I deserved an investigation of those charges! The rare times I have had a problem charge with another bank, they immediately credit me and handle it. Not Chase, who made me feel like a criminal for filing a credit card dispute and making them had to waste their time on it.
]]>At least people who bought bigscreens can enjoy them. Those that bought the SPX with $10000 last year have lost thousands with what to show for it?
Oh yea, treasuries are paying 2%? Banks less.
Invest and watch your principle shrink. Save and watch inflation destroy the value.
How do you feel now? Or do you believe it will come back (within 20 years)
It is not that saving and investing are unwise, but that it is as uncertain as anything else. You can plan to retire well and be hit by a car before you retire.
Moderation in all things. I'm specifically not saying to be a spendthrift, but I don't think the pre-reformation Scrooge had any joy in his wealth.
]]>@henwy:
Office of the Comptroller of the Currency:
The bank can generally change the account terms of credit cards or open-end lines of credit, including the interest rate, at any time, unless the open-end line of credit is secured by your home and is therefore subject to special rules limiting permissible changes in terms. The law requires notice to you when certain account terms, such as the interest rate, are changed. If the bank intends to change one of these loan terms, such as the interest rate, it must send the change in terms notice at least 15 days in advance of the change.
The 15-day advance notice requirement does not apply if
• the consumer has agreed to the change, or
• the change is due to delinquency (late payment) or default (such as going over the limit).
In both these instances, the bank must provide some notice prior to the effective date of the change, but there is no 15-day rule.
Be sure to review your account agreement, which is the contract governing your credit card account. It provides information on changes that may occur to your account.
If you received a change in terms notice, you should check to see whether the bank has provided a way to opt out of the change in terms. Some banks permit you to preserve the lower rate on the account by closing the account to future purchases and paying the balance under existing account terms. This may be important to you if you are carrying a balance.
Yah the latest is not including the transfer fee in the balance transfer promotional offer. I still kick myself for not catching that one. We had a Chase card of one type or another for many years. Had used them numerous times for their low/no interest for X months offers for vacations etc and simply always paid them off before they expired.
We got one of those offers 4 or 5 months ago, used it to get $5,000. Get the first month's statement and it had a $100 balance at 13.95%(the fee) and the $5,000 at 1.9%. And of course, payments go to the $5,000 first...
Can't blame Chase, I went back and read the terms and there was some new language in there that I did not grasp at the time, something along the lines of "promotional rate applies only to the exact amount transferred/advanced by using the enclosed courtesy checks."
So now for a few months they will make an extra 8 or 10 bucks interest off of us, then never make another dollar off of us ever... so I guess it works out for everyone.
]]>@concordia:
Yeah, was wondering that too. Dark Shadows was soo bad it was good.
Maximize profits now, because it's a whole new ballgame soon.
]]>I don't know what your credit history is, but Chase does, and if they think they've caught you in a tight situation, that's why their doing this. Credit cards are not a great way to manage large amounts of debt, because things like this happen. However, if it's unsecured debt, you just have to take it. Maybe some publicity will make them show some mercy, but that's all you really have at this point.
FWIW, I have a promo transfer account with Chase and haven't seen this fee show up. They probably know I can bail on them at any minute, so they're content with what they're getting out of me now.
]]>@henwy: Sucking it out of people is right.
I come from a banking perspective, where the relationship is important. You may lose a little money on someone for a year or two, but keep them happy and you'll come out ahead in the long run.
But these days, it's like there is no "long run." Even though I explained to Chase why I was a low-risk customer (mid-700s, never missed ANY revolving payment in my life), they still didn't see my angle that 4.99% was a fair--and profitable--rate. They are clearly using the increase as a transfer payment to cover their bad customers. In theory, bad customers should pay their OWN high rates for their risk profile. The creditor shouldn't be running good customers away in order to cover their short-term losses.
I've never worked in the credit card realm, but I've been in commercial and consumer lending for most of my career.
]]>I <3 my chase amazon visa. It's like a slot machine that always pays off, burping out gift certificates. That whole doubling of rewards to 6% was spiffy too. Just in time for the whole christmas shopping season.
]]>Any citation for this opinion of yours?
]]>Actually, whether they make money on it isn't all that clear. It all depends on how long the OP will continue to pay. If they think that he's only going to be financially afloat for another year based on his stats, chances are good they'll choke on his balance. When they do, it's most of 20k down the toilet.
It's this assessment that's causing them to raise minimum payments and create the other fees and crap. Everytime someone goes bankrupt and defaults on all their bills, the credit company loses almost all of the balance and interest. Since an extra $10-$20 a month is unlikely to be the death blow, they might as well suck a little more while they can. That's what my reasoning would be anyway.
]]>Maybe this is Chase's new "profit recovery fee"???
]]>I won't go into details, but I'm one of the affected here. We felt 4.99% in this rate environment was fair, but Chase still wanted 7.99% or $10 a month and 5% minimum.
The $120 a year is actually quite a bit higher, as the $10 monthly charge is assessed at a higher rate (8.99% in my case) and was already up to $10.02 when my statement arrived. Since the order of payments means you pay off your promo rate FIRST, the "fee" continues to compound continuously in the background.
Really, really f*cked up. I've never been treated like this by a card I've had for more than a decade, with NO defaults.
]]>@tz:
Don't cancel the card - it could negatively affect your credit, and it won't be costing you (once the balance is paid off).
]]>Maybe someone needs to start a pool on who does it next and when.
]]>I also noticed in their latest balance transfer offer that they have removed the maximum cap on the 3% balance transfer fee. Back in the day it was capped at about $75, then $150-200. Now there's no cap.
Not that I'm going to transfer anything now that they are putting hidden monthly fees on the transfers.
Obviously their purpose here is to jack up that low, low 2.9% interest rate that you are paying at the minimum monthly payment. Considering that they can and are getting free money from the government, it's not like they aren't profiting off of any loan they make that's being repaid.
]]>ACK! Stop staring at me!
]]>But first Citi betrayed me by jacking up my rates, then this week Discover did the same thing. Now I'm frantically paying off those balances and have resolved never to use either card again. I won't close the accounts because they represent a huge portion of my available credit. The only card I can rely on now is the Visa issued by my credit union.
I really wish that new credit card legislation had come a lot sooner.
]]>They're not offering that option. Their position is: our card agreement lets us change anything at any time. In theory, they claim they could change the rate to 200%, and say "pay it off in 30 days, or the new rate applies."
]]>"You can reject any change and close the account and keep paying at the old rates"
This is the whole issue - you CAN'T do this. They aren't offering you the option to keep paying on the old terms.
Your choices are:
1. agree to the fee and the much higher minimum payment
2. accept a much higher rate
3. pay off the balance immediately
*sigh* gonna have to find someone else who wants my money I guess.
]]>I kept the account open because even with the fee, I'd be better served paying off higher accounts, but I am hoping the lawyers get me some of the money I pay them back.
]]>@lawnmowerdeth: Why would there be any action, much less a class action. Chase can change the terms, read the agreement into which one enters when they open the account.
You can reject any change and close the account and keep paying at the old rates, or pay the balance in full, or refinance the balance somewhere else, but there is nothing improper in what they are doing. Inadviseable- perhaps, unkind- perhaps, just not a nice thing to do - certainly. However they are not making money on these accounts and that is what they are chartered to do so changing the terms is indeed in their long term best interest.
]]>And debt...
]]>But others are probably harder if they can't transfer. If you were
doing a $100 per month and it just went up to $250, that's $150 you
won't have each month. That is why they were bailed out - to strangle
those who had loans?
There are other low or zero introductory balance cards with no fees,
and if worse comes to worse I'll just move everything to my credit
union since I'd rather pay the interest to them even if it is more
than to the plastic loan sharks.
This was one of those "15 day" notice things they mailed out at the
end of the year (I'm out of town and get my mail forwarded so I don't
have it yet unless it is "lost").
That is the problem with doing restrictions "starting July 2010". All
the companies will just pull something like this by May 2010.
The gov't didn't want only the "bad banks" to take the money as they thought this would cause a run on them
]]>article here: [www.nakedcapitalism.com]
]]>Fortunately for me, my balance is fairly small and I will be able to pay it off in a couple of months. But for those who carry a large balance or are on a fixed income, this could hurt.
]]>In my case, the minimum went from 2 to 5%.
]]>I'm sure congress will allow this. They haven;t cared about you or me in Washington for a very long time now.
]]>