JP Morgan Chases Customers With Low Interest Rate Credit Card Debt
Feb 12th, 2009 | By Rob | Category: Credit Cards, featured
JP Morgan Chase took action recently to cut off the supply of low cost credit it offered to consumers through promotional balance transfer rates. I’m sure that we all remember the good old days when banks offered a low interest rate balance transfer at a fixed rate for the life of the balance of the debt to almost everyone. Well, it turns out that 400,000 Chase consumers who took advantage of this offer a few years ago and didn’t appear to have any plans to repay the money quickly will be paying a bit more on their debt in the future.
According to a USA Today article, the bank has begun charging a $10 a month fee ($120 a year) and raised the minimum monthly payment to 5% of the principal balance. The customers affected had large balances for more than two years and had made little progress paying them off. Those who called were offered the choice of the higher minimum payment and annual fee, or a 7.99% interest rate.
The announcement is a bit amusing to me, since after I repaid a large amount of debt on my credit card over the summer, I received a letter from JP Morgan Chase that they were hoping that they hadn’t lost my business. They accompanied the letter with a similar fixed low interest rate balance transfer offer (1.99% for 6 months or 3.99% for the life of the loan) through convenience checks, and followed it up with another balance transfer offer in October/November.
A class action lawsuit has been filed by a New York law firm, Giskan Solotaroff Anderson & Stewart, on behalf of those affected. Go get ‘em!
A college professor started a site focused almost exclusively on this issue. It’s here: http://www.ChangeInTerms.com, and seems to be a great source for info / updates on the figt of this. (BTW, at least six other class-action lawsuits have been filed against Chase on this).
BTW the “The customers affected had large balances for more than two years and had made little progress paying them off” is a Chase “spin lie.” Just run the math on 2%-of-balance payments on a 3.99% or 4.99% APR loan. What Chase is doing, really, is just very-thinly-veiled extortion.