Friday, June 26
Posted 4 p.m.
Bankrate reporter Leslie McFadden contributed this entry.
JP Morgan Chase & Co. will raise the balance transfer and cash advance fee on some of its credit cards to 5 percent starting Aug. 1, the highest fee charged for either service by the major card issuers, according to a Bloomberg report.
Previously, Bank of America charged the highest fee in those categories -- 4 percent for balance transfers and 5 percent for cash advances.
Also beginning in August, a provision in the Credit Card Accountability Responsibility and Disclosure Act takes effect that will require card issuers to give consumers a 45-day heads up before rate increases, fee hikes and other changes apply to their account.
"In a higher loss environment, it's important that we are prudent with our balance transfer and cash advance offers," Chase spokeswoman Stephanie Jacobson wrote in an e-mail. "As a result, we are making fewer balance transfer and cash advance offers and targeting them to selected customers, primarily those that choose to engage in spending with us on their card. Additionally, we have raised the maximum fee we can charge up to five percent."
Chase also hiked the minimum payment due from 2 percent to 5 percent for some accounts. If this change in terms sounds familiar, that's because the bank imposed the same adjustment on a segment of cardholders in January. This is round two.
"Chase has recently increased the monthly minimum payment on select accounts that have carried balances. Effective August 2009, impacted cardmembers will have their minimum payment increased from 2 percent to 5 percent of the statement balance," says Jacobson.
Affected consumers complained to Bankrate that they were unable to opt of the minimum payment increase. In some cases the increase made their monthly minimum payment unaffordable. "Minimum monthly payment was $170 now will be $620," wrote William M. "We cannot pay that."
If the increase deals a death blow to your payment ability, don't resign yourself to default.
Borrowers who can't meet the higher minimum should contact the card issuer and explain their situation, advises Greg McBride, senior financial analyst at Bankrate.com. After that, he says to consider credit counseling. Find a reputable agency through the National Foundation for Credit Counseling.
Jacobson acknowledged that cardholders with payment difficulties can discuss their circumstances with customer service.
Questions? Comments? E-mail Plastic_Rap@Bankrate.com.