For Immediate Release
Consumer Groups Call on Chase Bank to End Minimum Payment Hikes on Fixed Rate Credit Cards
Chase Policy is Putting Many Customers at Risk of Default or Forcing Them to Accept Higher Interest Rates
WASHINGTON - Consumers Union, National Consumer Law Center, and USPIRG called on
Chase bank to stop hiking minimum payments on credit card customers
with fixed interest rates in response to numerous complaints from
consumers about the practice. Over the past year, Chase has been
notifying many of its customers that their minimum payments would
increase from 2% to 5% of their balance. Customers can keep their
minimum payment at 2% only if they agree to forgo the low promotional
interest rate they signed up for and accept a doubled interest rate.
In their letter to Chase, the groups note: “While over the long term
higher minimum payments can reduce debt faster, the sharp rise in
minimum payments can throw a family budget into disarray, especially
during a recession. The real effect of these sharp increases in minimum
payments is to force customers who can’t face a more then doubled
minimum payment to give up their favorable fixed promotional rate. This
sharp increase will also force many consumers to default into penalty
interest rates which will keep them indebted for longer.”
A complete copy of the consumer group letter to Chase is found below:
September 8, 2009
Gordon A. Smith
CEO Card Services
J.P. Morgan Chase & Co.
270 Park Avenue
New York, NY 10017
Re: Minimum payment increases
Dear Mr. Smith:
During the last twelve months Chase bank has twice notified many of
its customers that their minimum payments would increase from 2% to 5%
of their balance. Consumers Union has received complaints from more
than 100 of these Chase customers, all of whom describe the following
similar set of facts:
rate for the life of the loan” promotions offered by Chase through
balance transfer and convenience check solicitations.
The consumers were not late in making payments.
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.
Chase’s change in repayment terms raised credit card payments to
Here are just two Chase customers who have shared with Consumers
Tom from California told Consumers Union about his experience with
Earl from Maryland told Consumers Union that he took advantage of a
We ask Chase for the following:
affected by this change in terms, to the level in place at the time the
consumer incurred the promotional balance.
those consumers who gave theirs up for the sake of a manageable monthly
By changing the terms of these promotional financial products Chase
Gail Hillebrand or Michael McCauley – 415-431-6747
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