New WSJ piece on CC fees includes Chase bombshell: Life-of-balance promo users will face fees & 5% min monthly payments

What I understand is, Chase is screwing with my budget. Now that is not a favor I'd like done often. The other facts stated, which are indeed facts, and which I do understand, are irrelevant to this issue. So I understand what I need to understand, and yet, still -- Chase sucks.

I assume no one has had the latest change of terms take effect yet?

The wording I've seen quoted is, "These changes will take place automatically and will be effective with your AUGUST 2009 statement". That's ambiguous...but I'm assuming it means that with statements closing Aug 1 or later, minimum payments due upon that closing will be 5%.

can you alter your statement due date this month to prolong it to end of august?

"Dear fozzy13,

We're writing to let you know a change in terms notice included with your June 2009 statement for your credit card account ending in xxxx is available online. The changes will be effective on the dates listed in the notice, except we will delay until your October 2009 statement the effective date for the changes listed in the notice that you have a choice whether or not to accept. We will extend the date for you to notify us if you choose not to accept those changes until August 15, 2009."

Huh, I don't recall being given a choice to not accept any of the new terms. Maybe a re-read is in order. FWIW, I just received this via email a few minutes ago.

Ahh, now I see. The differences are bolded.

"We are sending you this notice to let you know that we will be making
some changes to your credit card account. These changes will be
effective as described below.

Here’s a summary of the changes that will apply automatically, effective with receipt of this notice:

(A) We reserve the right to decline any standard APR balance
transfer transactions (including balance transfer checks) on your
account.
(B) We may place limits on or stop your ability to make cash
advances and balance transfers on this account.
(C) We are clarifying the different ways in which we may contact
you and the reasons why.
(D) We are also clarifying our rights to suspend your credit privileges
or stop features on your account, at our discretion.

Here’s a summary of the changes that will apply automatically, effective with your August 2009 statement.

(E) We are changing the balance transfer and cash advance
transaction fees to 5% of each balance transfer or cash advance
transaction (minimum $10) unless we specify a lower fee that is
made available to you.
(F) We are changing the minimum finance charge to $1.50 if any
periodic finance charge is payable for a billing cycle.

Here’s a summary of the changes that you have a choice whether or not to accept. If accepted, they are effective with your August 2009 statement.

(G) Any balance transfer check made payable to cash, to you, or to
individuals or businesses that we will notify you about, may be
assessed cash advance interest rates and fees.
(H) Your Default APR on this account may be applied for any default
such as late payments on other accounts or loans with us or one
of our related companies.
If you accept these changes, there is no need to contact us. The
changes will take effect with your August 2009 Statement.
If you do not want to accept the changes, please call or write us a
letter advising us that you do not want to accept the changes. We’ll
need to receive this call or letter no later than July 22, 2009. Please be
sure to include your name, address and account number and send the
letter to: Cardmember Service, P.O. Box 15098, Wilmington, DE
19850-5098

Please note that if you choose not to accept the changes:
• You’ll still be responsible for any outstanding balances on your
account.
• Your card will no longer be available for use for new activity,
including purchases, as the account will be closed.
• Any rewards points or miles you have earned may be forfeited
unless you call us to redeem before your account is closed.
If you have any questions regarding these changes, please contact us
by calling the number on the back of your card."

Can anyone give their interpretation of the change notice listed by Fozzy13?

If I’m reading it right, it appears a person can only opt-out of G & H, but it also sounds like (from reading the full notice) that opting out and closing the account means they can ask for payment of the outstanding balance immediately or at anytime after the account is closed because of the automatic change in (D). ????

Dawn38, they're saying that the account would be closed to new purchases after an opt-out per G or H, AND that payments must be made according to the operative minimum payment criteria.

Of course, they could claim down the road that even though your account is closed, your minimum payment is being increased anyway even if there's no default. That would be unusual, maybe unprecedented...but then this whole change in terms is similarly unusual.

Dawn38 said: I think I understood your reply that if I opt-out and close the account to new purchases, then I'll make continued set minimum payments, whatever they term that percentage payment to be.Correct. Or do you suppose (G) will only affect checks posted after Aug. 1?I do. I think they know they'd get too much grief if they tried to retroactively changed the BT rate on a non-defaulting cardmember.

I have to decide whether to opt-out by July 22 and I'm not sure what to do. You're right, this change in terms is unusual. Unless you think you are likely to run afoul of the G or H provisions, I wouldn't opt out, unless perhaps you're inclined to close the account anyway.

Thanks fozzy and Dave. I got the same notice online.

Besides minimum payment, it seems like they are getting serious to discourage the 0% BT crowd.

JPMorgan CEO Jamie Dimon Sounds Off on the Future of Credit Cards
Linky

FWIW, JPM lost 670M$ in their credit card business the last quarter. BofA's credit card loss was a staggering 1.6B$ in the most recent quarter alone. I believe the recent change in the terms for those cards is consequence of those companies rightsizing their business. I'd also predict that in the future, the credit card may be handed out not on FICO scores alone but also on their relationship with the issuer. So if you have a checking account and a mortgage with Chase, chances are that you will get better credit card deals or higher credit limits going forward. Those changing rules will probably affect many and this thread shows just one of the many outfalls that are yet to come, IMO.

Good idea to buffer you credit card portfolio with CU cards which are much less likely to do this, although I hear they are stingier with new approval and credit limits as well.

Okay...ready for a Chase update?? We also received the COT from 2% to 5% in June. I called and claimed it to be a hardship. Eventually, after calls to Credit Counseling (they said they can't help us b/c we don't need credit counseling) they agreed to a 5 year fixed term with a 6% interest rate with a payment of $322 per month. That is less than we have been paying them all along..just an increase in the interest rate from 4% to 6%!(And they closed our account - Thank Goodness) Well...just today I received a cryptic letter demainding $287 in the next 25 days to re-enroll my account. What? So I called the number. Miss Tasha says that they were trained wrong and were not supposed to increase our interest rate when they set up the Balance Liquidation Program. Now, my BLP is for 2% with a monthly payment of $287. Go Figure! My guess is that the Class Action Lawsuits and Attorney General Complaints finally got to them. How else would you explain this!?

Thanks AmieJS for the data point.

I've seen reports elsewhere of alternative plans at interest rates much higher than 2%, but the 2% 5-year plan is the only one that's matched with the BLP.

I'd like to see more evidence of exactly how Chase will be handling enrollees in this program.

How does enrolling prejudice your other card memberships & general status with Chase and other lenders? If "hardship" is treated more like a proxy for "this customer doesn't want to get hosed and they CAN pay", then it's possible that enrolling wouldn't have negative fallout--especially if Chase reports it right to the CRAs. OTOH, if it's considered a deal they'll offer mainly to folks who are can pay, but only just barely--or if it's reported in a way that suggests that it's some sort of "workout plan"--then the reprocussions could be very different.

ANY details from enrollees RE exactly how this is being handled by Chase would be most appreciated, as would additional data points on just who is and isn't being accepted for this program.

JW said: I also got the notice fozzy13 posted: Jul. 13, 2009 @ 1:02p, but I do not see an increase in min pmt in that notice. Am I missing it?
I failed to see the language which impliments the increase rate of payment.
The notice you and fozzy received was - just to pick a title - the "Chase BT Fee Increase to 5% Notice".

Completely different from the minimum payment increase to 5% affecting for-life low-APR balances ...

DaveHanson said: Bump for details on how folks who opted for the 2% / 5 year workout are being treated. Have your other chase accounts been affected? For those who've closed a billing cycle since taking the offer, how are the old accounts being reported?

I got my official letter in the mail today stating my terms and confirming my enrollment in the balance liquidation program. The card with the BT was frozen as per the agreement. All of my other cards are fine, though they are low credit lines (5-8k each). I haven't checked my credit report, but I have credit monitoring and haven't received an email saying anything has changed get. My billing cycle ended about 2 weeks ago.

It turns out the increase effective Aug 2009 stmt from 2% to 5% notice was only for my larger balance 5.99% APR B4L account. My smaller 3.99 APR B4L account did NOT get such a notice. I find it odd that AFAIK, nobody else has reported a followup recorded phone call which I received in addition to the snail mail notice. Nothing in the notice provided for me to close the account and keep the lower min pmt. It is also of interest the notice said they could close the account for any reason including no new activity.Chase minimum payment increase notice said: The principle factors we considered in increasing the minimum payment due include the APRs and revolving balances on your account.

This account has had a couple of accidental auto charges (about 5% of current balance) which are being charged top draw interest 21.99 APR rates and cannot be paid off unil the B4L is paid in full. This account escaped the original round, but has had the CL cut at least once.
I'll live, I just have to reduce some pmts on other accounts.

i think the idea would be to apply for new card; steal most of the card limit from the old ones. it seems their attack plan is focused on specific products in your portfolio and not yet spread to total portfolio mode.

same with citi.

rigor said: i think the idea would be to apply for new card; steal most of the card limit from the old ones. it seems their attack plan is focused on specific products in your portfolio and not yet spread to total portfolio mode.

same with citi.

Yep! Sounds about right.

DaveHanson said: Thanks depreshun for the data point. What reasons did the letter they sent give you for the cuts?

"This account, referenced above, has a credit line higher than you have typically used. We have lowered the credit line on your existing account to $5,000.00 due to Your current amount of credit is enough in relation to your income" (same note, both letters)

Thanks depreshun. Interesting they'd cite both the "typically used" and "enough credit" reasons. Sounds like their lawyers are simply advising them to do amply CYA, which is what one would expect given these circumstances, litigation on the earlier change in terms, etc.

fozzy13, I can understand your thinking, but I wonder if there's any reason to believe they won't chase your balance down, similar to what depreshun experienced after BTing away.

Glad you liked my lame pun fozzy13.

My guess is that Chase tends to avoid dropping the CLD hammer while the 5% minpay jack is pending. This is because doing so gives one more argument to those who claim it's poor conduct (because it results in a fico drop due to a utilization jump). Once someone's paid off the balance, like depreshun, then this argument is much less significant. And once they think that a customer has acceded to the 5% minpay jack, they pay be less concerned with customer reaction.

It is certainly difficult reading the tea leaves on all this. I'd love to know whether or not accepting their "hardship" program prejudices your other Chase accounts...but that's another algorithm that's difficult to "reverse engineer" from scattered data points.