I received a notice about my change in terms and conditions from Chase today in the mail. Even I was shocked at how far they are going to fight back against credit card legislation. I thought I would write about some of the highlights.
(1) Change to variable rates – This was a no brainer and sure to happen. Credit card companies couldn’t continue to operate with fixed interest rates. So, they changed the fixed rate to a variable rate. The new variable rate is prime rate plus 8.99%. You can be assured that the prime rate will be going up in the future along with these credit card interest rates. If you want a cash advance, it is prime plus 15.99%! That would put a cash advance at 19.9% at today’s rate. It is pretty sad when a payday lender starts to look like a better deal.
(2) Change of balance transfer fee to 5% – Wow! That is pretty steep.
(3) Balance transfers can be declined – If I initiate a balance transfer with my available credit limit, they can decline it.
(4) The rewording of the Universal Default – Now this is sleazy. The biggest gripe about credit card companies is their ability to change the interest rates for any reason. Well, they redefined the universal default rate. Of course, they don’t dare call it that. The new universal default definition is the ability for Chase to charge me the default rate in the event that I am late with a payment or default on any account that I might have with Chase or its related companies. Of course, most consumers have numerous credit card accounts that are backed by Chase.
(5) They can stop a cash advance – They are notifying me that they can stop a cash advance if they choose.
(6) Communication – They go into detail about how they can communicate with me. They state that if there is a fee incurred while contacting me via e-mail, text, or phone, I am responsible for that fee although I didn’t initiate the communication. That is an interesting one.
(7) Closing of account – This is a dangerous one. If you close your account, the NEW fine print states that they “may require you (me) to pay the outstanding balance immediately or at any time after your (my) account is closed.” Of course, they give me the ability to close my account in the event that I don’t like their new terms and conditions.
The only difference between the old fine print and the new fine print is that they are just spelling out how many ways they are going to take advantage of me should I choose to keep a balance on my Chase card. With the new card agreement, how much of that will actually change when the new laws go into effect in February 2010? This should be interesting. Personally, I think that they are just laying the groundwork to get around the law. This is what this crooked industry has done for decades.
Tags: balance transfer fee, Bob Brooks, Chase, Credit Card Companies, credit card legislation, credit limit, Deceptive Money, fee, fixed interest rates, interest rates, payday lender, prime rate, Prudent Money, terms and conditions, Universal Default, variable rates
August 12th, 2009 at 12:03 pm
I received the same information from Chase about a month ago. Yesterday I received my bill, and I am glad I was sitting down. My new monthly payment had gone up from $ 240.00 to a whopping $540.00. I immediately called them and challenged the change. I explained that I did not receive noticed on the change and that I have never, ever missed a payment. The rep, asked me if I had a job, and just happened that I lost my job, my husbands job has cut his pay by 25% a week ago and this is the reason I was in a panic, seen such an amount. He then advises me to talk to a financial advisor and they will probably have me close my account.
I spoke with the financial rep and told me that it was not because of anything I done that the payments went up, but it is because of the 5% change charge on the balance. It used to be 2% but now it has hit all and any one who has a balance at Chase to a whopping 5% of the entire balance. I explained my situation and that I did not want to default but need to work something out with them. He asked me lots of questions about mortgage payments, other credit cards etc. Then he told me that the bank can give me a loan at a fix rate for 60 months. I had no choice but to agree to both the loan and to close my account. I am not sure why Chase is going this route if the customer is paying on time and paying more than required. I ask each one of you to please keep a close eye on your bills; this is the time these credit card industries will try to get you.
August 12th, 2009 at 3:49 pm
interesting story – did they give you any terms and conditions on the loan? I would love to see the fine print if you have it. That would tell me a lot about their motivation.