Groups ask Chase to stop messing with minimum payments
By Consumers Union on Tuesday, September 8th, 2009
Imagine you open your credit card statement and see that the minimum payment on your promotional fixed rate balance is more than double the amount you are usually required to pay. It may not be too difficult to imagine because this may have happened to you already. Consumers Union has been flooded with calls and emails from consumers who are complaining that Chase bank raised their minimum payment from 2% to 5% of their total balance and is literally forcing them to go into default.
These stories all have the same set of facts.
• These customers held balances subject to “fixed interest rate for the life of the loan” promotions offered by Chase through balance transfer and convenience check solicitations.
• They used Chase’s promotional offer for large loans in reliance upon the terms of the promotion.
• The consumers were not late in making payments.
• Most paid more than the minimum payment each month.
• The minimum payment was raised so that it included 5% of the balance (up from 2%)
• When contacted about the increase, Chase told the consumers that the minimum payment could be brought back down to the prior 2% level only if the consumer agreed to forgo the promised promotional interest rate and instead accept a doubled interest rate.
Though it is true that over the long term higher minimum payments can reduce debt faster, a sharp rise in minimum payments can throw a family budget into disarray, especially during a recession.
• Refrain from increasing consumers’ minimum payments, with respect to balances subject to promotional fixed interest rates.
• Restore the minimum payment for those consumers who have been affected by this change in terms, to the level in place at the time the consumer incurred the promotional balance.
• Restore the promotional “life of the balance” interest rates for those consumers who gave theirs up for the sake of a manageable monthly payment.
What can you do?
If this story sounds all too familiar, there are two things you can do. First, share your story with us so that we can keep track of what’s happening out there and how people are resolving these issues. Second, complain to the OCC which is the agency that regulates Chase bank.