I was aware of others talking about credit cards changing rules, raising interest rates, lowering credit lines, and the such in the face of the ‘credit crunch’ (another reason would be to sneak in things before they were limited by the CARD Act this month), but I had been pretty fortunate. For example, a lot of people have had trouble with Citi raising interest rates, but mine has stayed the same. Eventually, a few months ago, my Discover card sent me a notice that they were going from a low fixed rate on the card to a higher variable rate. I quickly wrote and ‘denied’ the change which closed the card. I then quickly paid it off so that I would not have to even worry about it anymore.
Chase though has quickly taken things to a new level, and honestly a new low. I have had a few problems with Chase in the past. I made a mistake and accidentally paid late (just a day or two) a couple times when I was not so ‘on top’ of making my payments on a specific schedule. As a result, they shot me up to the default APR on the account in question. Even though it has been approximately two and a half years since the problem first happened, they still have not come off of this rate. Of course, that was not a big problem, because at the time they distributed low APR balance transfers “for the life of the balance” both on the website and as physical checks (now if they make a similar offer, they limit the term to approximately 3 years or less).
I have another Chase branded card that I received from the Buy.com website. I signed up for it to get $30 off an order. This card did not get the default rate when I messed up on the other chase card and has a decent APR, so I used to use it as my primary credit card. In August 2007, I started consolidating some debt and getting my finances in order. I had a 5.99% balance transfer offer available on the Buy.com card and 6.99% (online) and 7.99% (paper) offers available on the other Chase card (I had to take advantage of both since I needed the 7.99% paper check to pay off my existing balance on the Buy.com card since you cannot typically do BTs within the same credit issuer). I then called and shifted $1200 of my available credit from the normal Chase card to the Buy.com card. At this point, I essentially filled both cards with balance transfers to consolidate and reduce the interest payments on all of my outstanding debts. Since then, I have just paid them down each month without adding to my burden (except that I BTed some more onto the Buy.com card from another card that was about to have the interest reset to a higher level at another point when 5.99% was offered again in December 2008).
So, now you have an idea of where I am at in June 2009, with two Chase cards at limits of $700 (regular), and $4100 (Buy.com) with balances of $520 and $3800. I then receive a one two punch that is what is causing me to write this post. First, they reduce my credit line on the Buy.com card to $3900, not a big deal but slightly annoying since it can affect my credit score adversely. That does not really matter though since we already had our mortgage approved.
The second is that they knocked the minimum payment up from 2% of the outstanding balance to 5%, at least on my Buy.com card. I think I received a notification that this was going to happen, but, in my head, the math did not click correctly and I did not think to act on it in any way. I could be wrong though as I received a separate notice that the balance transfer fee was going from 3% to 5%. Anyway, this annoyed me, but I knew it was in their rights (assuming they did send me notice which I cannot prove or disprove for certain) and probably to be expected since they need liquidity, especially with the WAMU takeover, etc. The annoying part though is what I read on Chase’s Consumer Affairs thread. While I fortunately can pay the increased 3% payment without much difficulty (I pay extra on a higher interest card, I can just shift over the difference), there are a lot who cannot because they had payments jump from from $390 a month to $950 a month. Normally, I would just feel a little bad for these people, but Chase says they will budge on requiring you to pay 5% of the balance… if you accept an interest rate hike! So basically, they are keeping their word to charge the rate for the ‘life of the balance’, but by manipulating other variables in their control to change what the ‘life of the balance’ is, they are effectively extorting people to give up their right to that low APR or have it forcibly taken away from them when they cannot pay (because of course, if you are even late on a payment, the ’special offer’ immediately ends). As far as I can tell, the CARD Act would not protect against the minimum payment changes, but just require them to give you 45 days notice as with other changes.
Chase…what a bunch of villains! They bought up all my gas cards and then changed the due dates without telling me. I was paying my cards on the same day I always did, and discovered later that I was being hit with BIG late fees because the payments were showing up a day late.
They send out those little flyers with 12 pages of 3-point type and know for SURE that nobody is going to read them. (Just like the health care bill.)