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Chase Changes their Credit Card Terms - A Lesson in Reading the Fine Print |
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Written by By Amy Arnold, CardRatings.com Credit/Debt Management Reporter
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Saturday, 04 February 2006 |
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Read the fine print. It’s a rule of thumb we here at CardRatings.com try to impress to our readers on a daily basis. The good news is it’s working! Several members of our credit card forum recently posted messages about a change in terms and conditions with their Chase credit card—the removal of the cap for balance transfer fees. And if you’ve been reading the fine print carefully, you will also note a change in Chase’s Universal Default clause.
Read the fine print. It’s a rule of thumb we here at CardRatings.com try to impress to our readers on a daily basis. The good news is it’s working! Several members of our credit card forum recently posted messages about a change in terms and conditions with their Chase credit card—the removal of the cap for balance transfer fees. And if you’ve been reading the fine print carefully, you will also note a change in Chase’s Universal Default clause.
Typically, Chase's balance transfer fees are 3% of the balance transferred with a minimum of $5 and a maximum of $75. However, beginning March 1, 2006, for Chase cardholders any balance transfer over $2,500 will cost more than the previous maximum of $75.
Chase spokesperson Jessica Iben confirmed that all cardholders—new and current—are affected by the change. The motivation for the move according to Iben is to maintain Chase's competitive edge.
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“Thinking about our other pricing structures as well,” commented Iben, “we believe that it is competitive—including our fee structure as well as our other pricing structure.”
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Gerri Detweiller, author of The Ultimate Credit Handbook and host of EverydayWealth Radio, says it may also be an attempt to prevent customers from moving balances back and forth between cards.
While the removal of the cap primarily affects large balance transfers, when dealing with credit card companies Detweiller reminds consumers that everything is negotiable. You can always call the credit card company and request a fee waiver or a better deal for bringing what they want— your business.
Removing the cap on balance transfer fees is not the only change that Chase has made to their terms and conditions within the past several months; they also made a change to their Universal Default clause. According to Iben, in March 2005 Chase stopped raising card members’ rates for failing to make timely payments to other creditors. While on the surface this looks like a positive step for consumers, looking a little deeper reveals all that glitters truly is not gold.
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“When we’re talking about Universal Default, we’re talking about triggering a customer’s rate increase as a result of a missed payment to another issuer. That’s how we would define it, which is something we haven’t done since March of last year;” says Iben, “but we always assess the risk we take when offering products to card members, and we look holistically at their background including credit fluctuations that trigger a change.”
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So, in layman's terms, if your credit score drops then it is still possible to have your rate increased. According to Detweiller, interest rate increases in spite of timely bill payments are the number one complaint she hears from consumers—whether they hold a Chase card or not. She says one gentleman who has been a Chase customer for 15 years suddenly had his rates increased to 29% even though he never missed a payment. What was the reason? His credit score lowered because of the amount of debt he was carrying.
And don’t forget, your credit score can lower for many reasons, including missing payments to creditors. So, if your score lowers because of missed payments and your rate increases because of the lower credit score, you are still indirectly affected by Universal Default regardless of the terminology in the terms and conditions.
In the long run a couple things still hold true…
It never pays to be late paying a bill.
It always pays to read the fine print.
On a positive note, Chase recently extended the introductory 0% balance transfer rate on their Chase Platinum Visa Card to up to 15 months. There is a $75 cap on this particular offer...as of today at least. You can review this and related offers in the Card Reports section of our site.
We welcome your comments about credit and money issues in our popular credit forum!
Amy L. Cooper-Arnold has been a reporter for CardRatings.com since 2004. Her articles have been republished by respected publications throughout the country, including Young Money Magazine, E/The Environmental Magazine and About.com. Amy recently graduated with honors from Austin Peay Univ. and is currently taking graduate-level classes.
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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings. |
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