Chase Credit Card / 2% to 5% min without opt out option
My wife and I personally have three credit cards with Chase Bank. On June 23, 2009, we received a change in terms for each account stating the minimum payment would be increasing from 2% to 5% of the ending balance. Over the years, we have consolidated our debt to these cards because Chase promised fixed low rates for the life of the loan and 2% monthly minimum payments. They said we had earned these terms as one of their "best" customers. We are not proud of our debt, but we had our reasons (child abuse at our daycare, our 6-year-old has Tourette's Syndrome, and I had bacterial meningitis). We made every single payment on time, in spite of the bad economy and our personal family hardships.
All 850, 000 of the customers targeted for this change in terms want to opt out of this change to the amendment to keep the terms the same and close our accounts but Chase WILL NOT LET US; this seems ILLEGAL and is definitely AMORAL. Carter Franke made a statement in front of the U.S. Senate Committee on Banking, Housing, and Urban Affairs on January 25, 2007. Franke said Chase would provide a customer with an "opt out" option when changes to terms were announced. Franke said, "this means that the customer may reject any change in terms, close their account, and pay off the balance under their existing terms." He lied.
Less than 14 months later, he provided testimony in front of the House Committee on Financial Services regarding the credit card reform bill (HR 5244). Franke said, “The bill requires a bank to follow payment terms which cost a great deal to implement – costs that will be passed on to consumers – and will virtually end competitive efforts to win business through low or zero interest offers. At Chase, our experience is that consumers appreciate these offers and take advantage of them. Many have become our long-term, valued customers…We believe that especially in times of economic uncertainty, our customers appreciate knowing that whatever financial strain they might face, we won’t add to it, as long as they remain in good standing with us.”
Carter Franke then threatened the same House Committee as follows: “We also very strongly believe the context in which HR 5244 is being put forward argues for considerable restraint on this legislation. In this uncertain economy, with credit markets already much tighter than they have been in many years, prudence would seem to dictate extreme caution with legislation that has the potential to further restrict consumers’ access to credit…there is clear indication that restricting credit cards [with this legislation] would likely have painful consequences for consumers and small businesses - and eventually for the U.S. economy."
I don't think the credit card companies should have been allowed any changes to terms after President Obama signed the credit card reform bill (HR 5244). Chase may have needed some time to get their paperwork in order but these changes to terms were definitely against the spirit of the delay in the effective date - it gave Chase time to follow through on their "painful" threats.
This recent credit card amendment to increase our minimum payments from 2% to 5% is absolutely ridiculous and needs to be reversed. These one million people cannot afford it and most of them will have to file for bankruptcy. We were already paying down our debt at a rapid pace with our low interest rate loans - we did not need "help" to pay them down any faster.
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