Latest insult from Chase: Outstanding balances can be called 100% due at any time

[Newsjock]

Another in the never-ending parade of "Changes to Your Account" notices ... this one arriving today, conveniently ahead of the new rules.

CLOSING/SUSPENDING YOUR ACCOUNT. ... Except as required by applicable law, and without prior notice, we may close your account or suspend your credit privileges or any feature on your account at any time for any reason, including account inactivity. If we close your account or suspend your credit privileges or any feature, we will not be liable to you for any consequences resulting from any such action. ... In addition, to the extent allowed by law, we may require you to pay the outstanding balance immediately or at any time after your account is closed.

Thank you, Congress, for not enforcing the new rules immediately. I'm sure your rewards are on the way.

[Robb]

1. Wow. Essentially an open-ended "notice to accelerate" on credit cards.

That can be called in any time. Talk about an uneven playing field.

[roguevalley]

17. can't get blood out of a turnip. let them. maybe if about ten million

people accelerate at THEIR end and stop paying this bill, these fuckers will either learn or die off.

[midnight]

2. I hope the teabaggers will start quoting the Bible on this abuse.

[marmar]

3. And when nobody can pay them, then what?

Are the banksters really that stupid.....or are the banks really in a lot more trouble than we know? These rash credit card moves lead me to believe that's something's seriously FUBAR.

[kenny blankenship]

27. FEES!!!

And unpaid fees lead to...

[AllentownJake]

4. This is so fucking awesome

Seriously, you have to love these guys! In the midst of over 10% unemployment sending out notices like this. They are like a fucking bill board of what is wrong with America and what caused this mess.

[RobinA]

5. I'm Closing Them Anyway

Chase threatened to suspend my account when I paid one day early, cause their computer couldn't figure out what was going on and thought I hadn't paid at all. When I called to get it straightened out I was going to cancel, but my card had a % going to a charity I support, so I didn't close. Two weeks ago they sent a letter saying they would no longer be supporting my charity. Good bye Chase, as soon as I pay them off this month. I'm gradually switching to the credit union, so I'm hoping to be out of big banks very soon. As much as possible and still live a normal life, of course.

[Sinti]

6. I've seen a mortgage with this clause in it

and I've seen them call it due - refi. Thank you, St. Ronald, for all your mercy.

[unblock]

7. yikes -- is this for a credit card account?

acceleration provisions (under certain specific conditions) are standard for many types of debt, e.g., mortgages.

but i've never heard of this for credit cards, except, i believe, in the case of the death of the cardholder.

[newspeak]

8. so, let's say they call on these accounts

what are they going to do if many people, who faithfully pay each month cannot pay in full? Are they going to try to "squeeze blood out of a turnip"? Also, if they call on these amounts due from good customers--they will run so fast and far from Chase as possible. They will never do business with them again. So, now you've lost some of your customer base. Are they willing to lose thousands of their customer base; because if they did that to me, I'd no longer do ANY business with them.

[Newsjock]

9. Something must be seriously wrong

To echo marmar's comment above, Chase wouldn't be doing this unless they felt it was in the best interests of their profitability. To accelerate credit card debt now is one way to get it off the books as quickly as possible, contain the damage into as few fiscal quarters, and "wipe the slate clean" so they can begin to steal anew.

In other words, they see some serious shit coming down the pike here.

[AllentownJake]

10. They will sue you to get the balance

and if they are in a bad position because they have been irresponsible with their activities and are about to go under, they will send out the notices to raise capital for survival.

[shimmergal]

24. They already did this to me,

At the beginning of the year--told me they were closing the Credit Card program I was on...it was about the time they took over Washington Mutual, whom my credit card was with.

I haven't paid on it since--fully intended to file bankruptcy if they sued. Since my income is small and mostly from social security--and I have no "holdings" -- I figured they wouldn't get anything. They haven't pushed it to the point of suing, which has been a big surprise. Of course I coincidentally had my land line taken out, so they haven't been able to hassle me too much. I s'ppose they still could sue, but the lawyer types I've talked to say my $6000 balance is probably such small potatoes it's not worth it. Especially since they can no doubt either get favorable tax deductions or "credit default" payments and come out without losing much (and they've already made lots of money from my sky-high interest payments.)

Maybe this is why they're sending out those letters--as things stand now, they get money either way?

[unblock]

11. assuming they can legally do this (they did say "to the extent permitted by law") WOULD they?

it's one thing for a company to assert a right and it's another thing entirely for them to exercise it.
they might just be preparing for some contingency, rather than intending to actually do this no matter what.

i guess if i were a soulless credit card company i would target customers who satisfy all of the following conditions:
(1) they are paying late on some competitors' cards;
(2) they are NOT paying late on their chase card(s);
(3) they also have cards from several competitors; AND
(4) their balance with chase is relatively small compared to their entire credit card debt.

the idea here is that the customer is starting to have trouble (1) but chase is not benefitting by racking up late fees (2) so they want to jump ahead of their competitors (3) and collect their modest debt before the customer runs out of money (4).

from a cold business point of view, i think this would make sense. but i don't think it would make sense in most other circumstances. typically the card companies make plenty of money off late fees and default interest rates, and accelerating the debt would either put an end to that or just push the victim into bankruptcy.


there may also be some argument for accelerating debt on customers who have plenty of money, but who just have credit card debt becuase of a low interest teaser rate. IF the company is short of capital, one way to raise capital and lower their own liabilities would be to call in those debts as soon as the teaser rate expires (i'm sure it's not legal to do that prior to that point as long as the customer is paying appropriately).

however, first, it's a nickel and dime way to raise capital, and second, the whole point of the teaser rate thing is to suck you in with the low interest rate and to hope to make big money when it expires and you charge a much higher rate (well not the whole point, they also gain when you pay late prior to the expiration of the teaser rate period). so they'd have to be fairly desperate to raise capital in this way. it improves their debt ratios, but at the expense of undermining their profits.

[AllentownJake]

14. Legal isn't the question

Even if this is illegal, most people won't challenge them. If you are late on your discover card and have a $500 Chase balance they will give you a call send you a copy of the provision and most people will try to find a way to pay or close their account. Will they get the $500 in a lump sum, no but they will get a higher minimum payment.

Remember, the credit card industry routinely approaches the relatives of dead card holders asking them to pay balances when the relative has no legal obligation to do so.

[unblock]

19. accelerating a debt is very different from requesting payment on a deceased relative's account

legally, requesting a relative to pay on a deceased person's account is just a request, and in any event the card company can claim a certain amount of ignorance because they legally CAN go after the spouse, for instance, and for all i know some other relatives in some states anyway. so part of the contacting relatives can be to make sure the cardholder really is deceased and to see if there is another party responsible for the account.

accelerating a debt, on the other hand, is cut and dried based on the terms of the debt and the applicable laws. there's not the same uncertainty. you can't "request" accelerated payment from a debtor who's not required to pay it all back immediately without explicitly telling them that they are not legally obligated to do so. otherwise it's fraud.

if they were to do this, yes, plenty of people would pay anyway, not knowing it's not legal, but some class action legal team would shoot it down for a huge settlement.

[Robb]

15. All of which makes sense, good post. One point

to consider is they don't appear to be targeting anyone in particular -- they've been making these odd moves toward everybody, regardless of credit history.

They're shoring up, trying to get debt off the books before... what? Big(ger) financial collapse? New(er) regulations?

[AllentownJake]

16. Treasuries were trading at a negative yield yesterday

Something is going on. Also the Dollar jumped 9% in an hour.

There is about to be some shenanigans.

[unblock]

20. most of what i've seen is all about raking in profit rather than reducing debts

they are avoiding taking on NEW debt, e.g., by lowering credit limits, especially on unused cards.

but i've not seen too many tactics to eliminate existing debts.
in fact they fought like hell the idea of raising minimum payments from typically 2% to all of 4% (or even just 3%). that would be the simplest and safest way to reduce their exposure without pushing too many people into bankruptcy. if they hated that idea, why would they go for the idea of accelerating the entire debt, i.e., making the minimum payment 100%?

it only makes sense if they're thinking of this as a very targeted tactic, not something they intend to do broadly.

[On the Road]

26. I Agree, This Tactice Doesn't Make Sense to Me Either

Those balances are assets. Interest payments are profit. They want those to grow, provided the customer keeps paying.

Getting all the balances down to zero eliminates their profitability and puts them out of business. Forcing immediate payment assures that a certain percentage of the balances will be defaulted on.

Banks tend to set policies with a heavy hand anyway, but this is puzzling.

[Major Hogwash]

12. Loansharks used to do this all the time when the mafia was running things.

Looks like all they have done is become "legit" companies now.

[Mithreal]

13. K&R

[HCE SuiGeneris]

18. Got that notice for our business just today. USA! USA!

:sarcasm:

Way past time to stand up against this abuse.

[liberal_at_heart]

21. Dem congress will try to take credit for enacting regulation on credit cards

but this is yet another one I will not give them credit for. The credit card companies obviously gave the Congress enough money to stall the legislation so that they could raise interest rates. I am so sick of corporate bought politicians.

[MilesColtrane]

22. I think most credit card fine print has a clause that says they can change the terms...

..of the agreement in any way, at any time.

This is just spelling out what they are able to do already.

It's probably a preemptive strike against any kind of legislation that would come down the pike specifically prohibiting this sort of thing.

Whether they are stupid enough to actually start doing this to their good customers remains to be seen.

[Swamp Rat]

23. Using the song "Your Move" by Yes in a commercial and bragging they paid for it with a credit card

:puke:

[gleaner]

25. I had Chase too .....

We had WAMU at first, which was a reasonably good bank. We were in their overdraft protection program which did not require a line of credit. When Chase took over I had a feeling things would change for the worse. My husband and I closed all of our credit card accounts, paid off in full. We still had the overdraft protection, there was no way to opt out and it was helpful on occasion.

We did a refi of our mortgage with WAMU. We had good credit, so we got a 5.5% fixed rate back when interest rates were averaging 6% or above. Then my husband got sick to the point of death and had to be hospitalized for 14 weeks. During that time WAMU became Chase. Also during that time our house lost most of its value and our equity disappeared. In essence we are renting from Chase Manhattan and calling it a mortgage. My federal pension was reduced by $182 which is what happens when you initially retire on disability (I have MS) and later turn retirement age. I am 62. I guess when you get old they think the disability doesn't matter as much.

My husband came home, still very ill and with a whole new galaxy of medications to keep him alive. Our food costs soared because of inflation and because he has to follow a special diet. We fell behind on our bills and finally we missed one mortgage payment to Chase after never missing a payment before. They gave us two days to pay. We scraped together enough money to make our payment but they wouldn't accept it then. They said we had to pay the next payment as well. We decided to use the overdraft protection which allowed us to write over $1000, but they had turned it off. We called them and begged for a payment holiday which was allowable under our original contract. They refused and tried to bully us into applying for a line of credit at about 30% interest. We explained that we had not been able to make payments to my husband's doctors for the amounts his health insurance would not cover. We wouldn't qualify for any credit. We begged them to help us and they would not.

I called my sister who is 72. She closed out her IRA account that she was depending on and gave us enough money to catch up on the mortgage and our other bills. I don't know what we would have done without her help, and I hated like Hell having to ask her and perhaps take away money she might need. She sent the money by wire transfer so that it would get to Chase by their impromptu deadline and they charged us $15 for the transaction. We brought the mortgage up to date and put in for relief under Obama's stimulus plan which Chase had never suggested to us even though they were supposed to. When the stimulus first became public and we checked it we were not eligible because my pension had not been cut. That put us over the edge. We didn't know it but Chase did. They just didn't feel like sharing. They have lied to us and acted in bad faith at every turn.

Two days after we had squared the mortgage, we found a credit union and we have moved our direct deposits there and opened a share draft account. When and if it is feasible we will ask them to refi our existing mortgage, if we ever get any equity back. We haven't told Chase yet. We don't feel like sharing either. They will figure it out on December 1 when all of the direct deposits except the VA check will not go on. The VA check will be out of there in January. And you can bet that any renegotiation of the existing mortgage will be carefully vetted. There are lawyers circling like sharks just waiting for stuff like this.

What you posted doesn't surprise me at all. Please get out of Chase. Go to a small bank or a credit union with your bank accounts and if you can, close the account they are threatening you with and get some guidance about negotiating a payment agreement you can live with. Chase has lied to all of us. They released a story to the media earlier this year about how they were going to "help" all of their customers by letting them opt into an overdraft program if they wanted it effective January 1 and renegotiate all of their credit card agreements to benefit new and existing customers. Obviously they chose not to wait. I have to thank Congress too. I can't tell you how bad the stress of this has been for my husband, for my Multiple Sclerosis and for my sister.

The final insult was that after the mortgage was paid in full, they sent a letter dated earlier threatening to foreclose and telling us that we needed to let them know if we were ill or our income had been reduced or we needed financial counseling. We had been telling them that all along. They took notes on their computers as we spoke. I could hear them typing. Obviously they lie more easily than they breathe. Too bad we can't all get together and put them out of business, but then the world is for the rich, the banks are for the rich and we are just the fools who keep them running whether we want to or not.

[abelenkpe]

28. This happen to you personally?

Or is this from a news article? I'm so sorry if this happened to you. It's really lame, and makes me wonder about the solvency of Chase if they would resort to such measures.

Have you written to your reps with this news?

[ddeclue]

29. Apparently they want to start a peasants with pitchforks revolution against credit card companies.

This will get them raked over the coals for sure.