I appreciate what Congress has done to improve consumer's rights with credit card companies by passing HR 627. Section 3 was important to me: "Declares that, if two or more different APRs apply to different portions of an outstanding balance, the amount of any periodic payment beyond the required minimum payment shall be allocated first to the balance with the highest APR. Allocates any remaining portion to any other balance in descending order, based on the applicable APR each portion of such balance bears, from the highest rate to the lowest." I lobbied for it because Chase was doing it to me on two credit cards.
Section 3 made a big impact on me two ways, one good, one bad. I am now paying less interest on two Chase credit cards that have high balances and mixed APRs, which is good. However, I will never see a benefit from that. Chase just notified me that as of August 1, 2009, they are increasing the minimum payment due on two cards from 2.25 percent to 5 percent. That means my combined monthly payments jumped from about $800 to $1,600.
This increase, to double, is unacceptable. My Social Security check is only $1,100 a month. Luckily, my wife is still employed. Also, I was in the process of refinancing my first and second mortgage to pay off all my credit card debt. Now our debt-to-income ratio has changed considerably and I may not get loan approval. That will mean bankruptcy and/or foreclosure for us.
I spoke with Guy, at Chase in a "special solutions" department, on July 2. He said Chase will not reverse their decision to raise the minimum payment, and I have no avenue for appeal. Furthermore, they would not honor my request to delay the minimum payment increase ninety days so I could refinance. Guy indicated that Chase has not raised the minimum payment for all customers. They are being selective or discriminatory.
In fact, Chase is treating me both ways. I have three Chase credit cards. They raised the minimum payment on only two. Both of those cards are affected by Sec. 3, because I had used a promotion that offered 3.99 percent interest until the balance is paid. The third card is not affected by Sec 3, meaning the APR is not mixed, the minimum payment has not changed and is still only a 2.25 percent.
The new law was intended to help credit card consumers. Chase has found a loophole and has applied it selectively to certain customers. They are pressuring consumers in an attempt to get released from their obligation to charge "3.99 percent interest until the balance is paid." I need relief from this new Chase policy, and evidently many more consumers are in the same position.
Jul 2 2009 - 7:37pm