Friday, June 26
Posted 4 p.m.
Chase raises fees and minimum payment due
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
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
"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
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.