We’ve received a number of complaints from consumers who recently learned that their monthly credit card payments have been increased from 2% to 5% – a whopping 150%. Most of the complaints we’ve heard come from consumers with fixed for life interest rates that are in the low single digits. And most of the people we have heard from have simply had no luck getting their monthly payments reduced.
The raising of minimum payments by Chase couldn’t have come at a worse time for those affected. Many have seen minimum payments increase by hundreds of dollars, leaving them with mortgage sized credit card payments. Unfortunately, these consumers are left with very few options, as many companies have made it difficult to obtain 0% balance transfers. Additionally, many people consolidated large amounts of debt onto these low rate cards, expecting to pay them off over a long term period of time.
Given both the decline in 0% balance transfer offers and the large balances many of these Chase customers carry, there truly are very few good options available. (And taking a second mortgage surely isn’t one of them!)
However, I located on credit card that still offers a 2.9% fixed APR for life on balance transfers offered by the Pentagon Federal Credit Union. This seems to be the only credit card providing such deals, and may be a good option for consumers who are being pushed to the brink by Chase. However, this card is only available to certain military or government employees.
Here’s a link to their website: https://www.penfed.org/productsAndRates/creditcards/overview.asp
Lastly, if you have had success with this credit card or in getting your monthly minimum payment reduced, please share your experience so others can benefit. This unfortunate decision has really put a lot of people in very tough financial positions. Any help you can offer would surely be appreciated.
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July 1st, 2009 at 3:40 pm
[...] Chase Raises Monthly Payments to 5% on Some Accounts [...]
July 5th, 2009 at 5:21 pm
Cross-posted to “Citibank Raises Credit Card Rates-But Not That Much”
Chase increased the minimum payment on 3 of mine and my husband’s accounts. However, we were lucky enough to pay off 2 of them which was enough to offset the increased minimum on the one we have not payed off. We hated depleting two-thirds of our savings to do this since we were planning on starting a family within the next year and a half (I’m 34-biological clock is ticking) but we felt we had no choice since the extra $600.00 in minimum payments on those 2 cards we payed off would’ve had to come out of our savings anyway.
I think this is a despicable move by Chase. They are forcing people to make tough decisions like we have, and others that don’t have the savings to pay their Chase cards off or switch their balance(s) to another credit card may be forced into bankruptcy because they simply don’t have the money to make the almost triple minimum payment now required by Chase.
There’s still hope for people that absolutely can not make the minimum payment. I have been reading on other blogs/websites where people were able to get Chase to restructure their loans/balance transfers by being transferred to the hardship department. People are getting 5 year payoff plans at the regular 2% minimum payment at 2-6% interest rates depending on what you qualify for. People need to tell Chase that they can not make the 5% minimum payment and will be forced into bankruptcy. Just say to them “Would you rather I file bankruptcy?” after they tell you there is no opt out, and they will transfer you to the hardship department.
Although, I don’t think this is right thing for Chase to force people to do because people are making payments fine at the 2% minimum payment rate. All Chase would need to do is just let people close their accounts at the current 2% minimum payment terms and pay them off. Most people’s balances would be payed off in 5 years anyway since their interest rate is so low (most of the payment is going toward the principle). But, anyway, there’s no need for people to give up-don’t let Chase get to you, they’re not worth it! Just ask to be transferred to the hardship department, and Chase will work out a payoff plan where you’ll be paying the low minimum payment you’re currently paying! It’ll be OK!
Chase is obviously just trying to get these large low interest balances off their books so they can loan the money out to new people at higher rates. They’re only thinking of themselves. As I was told by a Chase representative, “It’s a business decision.”
July 14th, 2009 at 8:34 pm
I need to add some more information. The department that Chase transfers you to (after you express that you will not be able to make the 5% minimum payment) is Proactive Solutions-that’s what a Chase representative refers to as the hardship department. I found out this info from creditabout.com. Here’s the URL: http://credit.about.com/b/2009/06/26/chase-increases-minimum-payment-on-credit-card-balances.htm#gB3
You can ask to be transferred to them or you can call them directly. I called that number today and the person I talked to said that they are what Chase refers to as the hardship department. You will be asked by the automative system what your account number is, but, you can wait until someone gets on the phone with you before you give it out. If you feel more comfortable, just keep calling the Chase number on your statement or the number on the back of your card until you get a Chase representative that is aware of Proactive Solutions so that they can transfer you. But, if you are approved, you will have a fixed payment for 5 years and your payment will remain the same (never go down) no matter how low your balance gets. For instance, if they set your payments at $300.00 now, your payment will be 300 dollars every month up until the last month that you pay off your balance (5 years from now)-a lot like a car loan or your house payment. I would not accept an interest rate above 6% however. Some people are qualifying for a 2% interest rate!
I don’t know why the Chase representatives tell you there is no hardship department or Proactive Solutions-I tried to talk to a Chase representative today and I was told that there was no opt out etc. even after I told her that some people are stating on blogs that they were able to be transferred to the hardship department or Proactive Solutions to work out the 5 year pay off deal while keeping their minimum payment at 2% and she told me that wasn’t happening, but I was told by another Chase representative the other day that they are helping people who can not make the 5% minimum payments. So, apparently not all the Chase representatives have all the info or they are trying to push people to just pay off their balances like my husband and I did.
July 14th, 2009 at 8:59 pm
I need to correct something. The website where I found out the information about Proactive Solutions department is (about.com), not creditabout.com. People are blogging on there about the 5 year payoff plans that they were able to negotiate with Chase through that department.
August 11th, 2009 at 6:40 pm
This is unbelivable. I have banked with Chase for over a decade. I have my 401K with JP Morgan. I have perfect credit, and always paid my bills on time. My CC balamce was a high of 12K, it is about 8.2K now. My minimum went from 2% to 5% BAM in one month. That is a $244 per month Increase! Where is that comming from? I called the call center and they said transfer to another card or go to the hardship dept. I don’t consider myself a hardship. The banks minimum is non standard, way above the norm, and should not be imposed on people with good credit. I will visit the branch. In the end I would probaly have to move my balance to B of A a much better bank. However Chase will lose all my future business, and be the butt of countless ramblings by me to my friends on how awful they are. I know I’m only one person, but I’m no different, people who are mad just run for the exits… I’m one of them…
August 22nd, 2009 at 7:08 pm
Well I am one of those that just got nailed by Chase and I had no idea that Chase planned on or could have even done this so abruptly. My $173.00 monthly min. payment that I have always PAID ON TIME and always MORE than the min. payment required, went up to $430.00 because it was a balance transfer offer for a fixed rate of 3.99 on a 8,600.00 balance that they would like to get rid of so they can lend that money out at a higher interest to others. I will struggle to make it but I really feel for others who might have to suffer a default interest rate of 30% because they ended up missing a payment due to the fact that they can’t afford the difference in payment so abruptly. Wamu was always good it seemed, but since Chase took over, it turned into as much of a Loan Shark as any Banking Institution can get. But I am not taking this lightly. Next week I will take out all the money in my 2 Chase checking accounts leaving only $12 in each and open new accounts at another bank. I will then write myself a monthly check (since I have all these leftover checks) to my new Banks for $1.00 out of the Chase accounts as a constant reminder to Chase that I am using a different bank for my business now and still keep Chase’s administrative staff busy with my FREE checking accounts. All three of my Sons will do the same with their accounts at Chase. Then I will balance transfer my other 3 Chase credit card accounts that are lower balances with higher interests to another bank. I read where banks said they are doing this so people can get out from under their debt. BS…. My other 3 Chase card accounts with a higher interest, their minimum payments didn’t change. If anyone has suggestions on ways to protest these disgusting tactics of Chase to fatten their bonuses when people are desperately struggling to just survive in this economy, Please share!!!
August 25th, 2009 at 11:32 am
I don’t understand how Chase, or any other bank can get away with doing this. They’ve become loan sharks…
They more than doubled the minimum monthly payments due, making it a hardship for alot of people to afford during these tough times. Why are they making it harder for people who have been loyal cusomers who pay on time to repay these kind of monthly payments.
I happened to come across a blog from someone else who got slammed with a 5% increase in monthly payments.
While I was on the phone with customer service being switched to 4 different people, I told them I just read about an Alternative program (opposed to the 7.99% APR they wanted to increase my account to in order to give me back the 2% minimum monthly payments). The women I spoke to was very nice, and said she would go over an application process with me regarding my hardship, asked a few questions regarding income, rent/mortg. payments, etc. She said I qualified for what I think it’s called the “Balance Liquidation Program”. Basically your account will be closed, they reduced my APR rate to 2% for 60-months, in addition to giving back the 2% minimum balance due monthly, which actually reduced my monthly payments lower than what I was paying.
August 28th, 2009 at 9:38 am
I opened a line of credit with Chase 2 years ago. I took 0% cash advance to help my husband’s business. I’ve never used it for anything else, and have made payments well over the minimum for 2 years. The 0% interest was good for 2 years and would then go to a normal interest rate. Well, apparently they think a normal rate is 29.9%!
I am not, and have not been in default on this, or any other card. They also raised the minumum amount due (which would be fine at a lower interest rate). THREE DAYS after I get the notice that they are jacking up my interest rate, I start getting phone calls from their Balance Liquidation Plan people. Payment had not even come due in that time. Is the government incenting them enroll people in liquidation plans? I am struggling, like everyone else, but am not in what I would consider a hardship situation. My guess is that they want people like me to enroll in their plan so they can show good numbers for participaton and not actually have to write off balances to do it.
My solution: I paid the full balance from savings, and will give Chase the perpetual “finger” in future.
August 31st, 2009 at 9:40 am
Good for you Alex. You got to watch those cash advances. 29.9% is actually the normal rate, even before the credit crisis. But as long as you don’t owe them anything, they could charge 50% and it won’t matter.