Chase Gives its Customers a Much-Needed Kick in the Pants

Since this is SO GOOD for the consumer, why stop at this one credit card? Why don't all lenders change the requirements for consumers, so they are required to pay off their credit much faster? For instance, an auto loan, which we all know is usually not paid off, for some, until they trade in for a newer model and take on more debt. If that payment were increased by two or two & 1/2 times their current payment, everyone would finally own more of that expensive car. All credit cards should immediately require more money be paid -- 5%, since this is what Chase is recommending -- every month. Even those deductible mortgage loan payments could be increased, so we'd all get out of debt faster, increase the cash flow of our lenders, and be financially healthier.

Already, I hear some naysayers asking, "Where's the money going to come from every month, to pay all these increased monthy payments?" Details, details. I suggest they call the helpful people at Chase Proactive Solutions, who I'm sure will be able to answer that silly question to their own satisfaction. This poster above may be able to answer that question as handily as she approved of Chase's proactive grab for more of the consumer's monthly budget.

Great comment, thanks for presenting the alternate viewpoint. You're right that most consumers would be up a creek if all creditors started calling in our debts more quickly. My main point is that the faster we can get out of credit card debt, the less interest we're forced to pay the credit card companies.

Your article angers me because you do not look at all sides. Chase encouraged these customers to transfer high amounts of debt onto their cards by enticing people with 2.99% life of the loan interest rates and other similiar rates. I was one of those customers. Since I have a high credit limit, I took advantage of it to buy a piece of real estate. Now after I have consistently made my payments on time, they want to jack the minimum payment to almost three times the initial payment. Many of these customers will not be able to afford that kind of hike in their payments. Since Chase refuses to offer an opt out or try to negotiate with the customers, how many do you think will have to default and file bankruptcy? I believe Chase is hoping these people will not be able to make these payments, and when they are late with this payment just once, the low interest rate ends, and they get penalized with some ghastly 30% interest rate after making payments for months on time. Tell me, if you had a mortage, how would you like it if the bank increased your mortgage payment almost three times. Enough said!

J, Thanks for your comment. I do realize there are plenty of Chase customers like you that have a large amount of debt on their cards. Have you tried calling Chase? I'm curious to know exactly what they tell customers who aren't able to afford the new minimum. On the bright side, if you can make the payments, you'll own your piece of real estate that much quicker.

I can answer the last question. I've called twice to Chase about the new minimum they will require. The 1st CR was very polite, but said there was nothing he could do to help me. The second time I tried someone, armed with some new info on possibly reaching a "hardship dept", the CR was extremely rude and again said there was nothing Chase could do, and there was no such hardship dept.

Although I've made my monthly payments by auto deduction from checking, and pay an extra amount over the mimimum payment to cover the monthly interest, this higher 5% mimimum will work a hardship on me. I've read in online forums, some people have been able to work out a 60-month installment loan with a lower payment. I've no idea what kind of info you have to give over the phone for that to happen. I've no specifics on what DTI ratio they require for this help. Also, I don't want to trust Chase with a new payment plan, since they have behaved so badly with this one.

Apparently, Chase wants people to default and have to pay penalty rates instead of the low FLOB rates we have now. Or, they want to benefit from changing the deal by having lots of us get angry & pay them off. They win, either way.

They aren't imposing this new minimum payment on any customers EXCEPT the ones with the low rate balances who have been paying as agreed, just the payment we were told it would be, when we signed up for their much-ballyhooed low rates to save us money each month! These Chase people are dirty dealers who do not value honesty or honest customers.

The article is clearly written by someone with zero knowledge of the credit card industry and finance - a Suze Orman-like automaton that believes that all debt is bad. NOT ALL DEBT IS BAD! If you can borrow money for 2.99% and put it in a CD that yields 5% (not possible now, but available a little more than a year ago), the spread is PURE PROFIT (taxable, yes, but still profit). Now, if your minimum payment goes up, your cash flow planning is screwed up and the amount of time you are able to keep money earning is reduced. (In finance, we say that Chase has unilaterally reduced the duration of its asset. This in turn reduces the duration of our liability, and changes the cash flow requirements of the liability. Not good.)

Chase is doing its affected customers no favors by taking this action. Anyone had the freedom to pay 5% per month if they wanted before the change in terms. Now it is forced upon customers. How is that good or customer friendly? IT'S NOT! Thus the article's title is pure naive stupidity. Chase needs a good kick for this unethical change, not the reliable customers who the bank is reaming.

You're right, not all debt is bad. But so many people out there have huge credit card bills and don't see that they're wasting loads of money on interest by simply paying the minimum each month. For them, a raised minimum will actually be helpful. I'm not saying it's the customer-friendly thing for Chase to do, but this particular credit card company's action definitely has a positive side in that it forces us to pay down our debt faster.

Well, the last word from the author of this article, or someone claiming to be, proves you can explain til you're outta breath and blue, and somebody will still say Yes, there WERE weapons of mass destruction in Iraq. Or, someone will still say, it HELPS people to have their minimum payment raised. Nothing much you can do about these kinds of people, as they don't hear, they don't understand what is happening, they want to keep their own misconceptions intact. So, lil Carrie, I hope you stay in good health and never, ever need to put high medical bills on a credit card deal that turns out to be a bait and switch. Because only then will you understand that being able to pay your debts with a 2.5% minimum payment each month is a blessing. For a credit card company to come back on you and demand you pay twice as much each month, that is their greed, and it is just plain WRONG.

Medical bills are one of the largest causes of credit card debt in the country: Americans spent $294 billion last year on out-of-pocket medical expenses, and 25% (or $74 billion) of that amount was put on consumer credit cards. A bill was just introduced in Congress called the Medical Debt Relief Act aimed to alleviate the damage medical debt can do to credit scores. While it won't stop Chase and others from jacking minimums, it will help in other ways.

Wonder why JP Morgan Chase does not do the right thing by all their customers, and require 5% minimum payments from them all? Why are they doing a favor to only the low interest customers? Should be obvious to everyone, this favor is only for Chase. Chase hoped they might be stupid enough to charge more at regular rates on the same card, and end up in never paying down the higher interest balance. No wonder people who step into that cow patty, try to pay off the low rate balance as fast as possible. These relatively few customers who read the fine print, are being penalized for avoiding that trap. Chase is setting the bar for credit card company behavior a couple of notches lower, just what we need in a recession. Just what caused Congress to pass that bad law they are all trying to circumvent. Does anybody wonder why most regular folks detest and loathe the overpaid CEOs of financial companies? Hope they go under in the next collapse they are helping to bring on. No bailout next time.

This minimum payment increase is not helping me. It is a guise for Chase to get out of the 3.99% for the life agreement and raise the rate so I can keep the same minimum payment. I see this as a strong arm practice that most customers will have to give in to in order to keep within their current budget. Keep the nice rate but double the payment, or let us gouge you so you can afford to make the same minimum. Thanks Chase, I will be paying the same minimum for a longer term with a higher rate than agreed upon. (Which I had to pay a 3% transaction fee to get into.)