Chase increasing minimum payment percentage

**walker24** · 06-25-2009, 09:19 PM

Has anyone else gotten the notice from Chase they are increasing the minimum payment from 2% to 5%? I read on MSN it seems to be targeted toward customers that took advantage of low interest rate balance transfers. I cannot imagine how this will affect some people. At least we will have the balance paid off sooner....

**frugalwarrior** · 06-25-2009, 09:27 PM

No, but we always pay big chunks as large as possible. I hope this doesn't strap you too bad.

**savvy_sniper** · 06-25-2009, 10:05 PM

I got a notice that Chase was raising my rate from 9.9% to 14.9%. I always pay more than the minimum and have always paid on time. Thankfully I only owed them 800+. SO I paid it off a couple of weeks ago. 14.9% of 0 = $0.

I will pay off my Bank of America account in July. I got some confusing letter in the mail about how they would calculate the rate each month, etc. Sliding rate percentage of 0 = $0.

I am DONE with the credit card companies. IF I use a card, I will pay it in full when it comes due or do without. When they start charging a fee to keep the card in my purse, I will tell them where they can stick the card.

GREEDY SO AND SOs!

**kimmy4433** · 06-25-2009, 11:19 PM

I thought the government was going to take care of their shady practices? Please correct me if I am wrong, but if your balance transfer has a precentage rate of "X%" for the life of the loan, they can't raise "that" rate. If you have a balance transfer after such said letter/date then the "new" balance transfer would have the higher rate.

**i.m.cheap** · 06-26-2009, 12:14 AM

I think that only requiring debtors to pay 2% on their balance IS one of the "shady practices" that they are trying to stop. A 2% payment means it will take 20 years or more to pay off a large balance. A 5% minimum lets more of each payment be applied to the balance. With the lesser amount, almost all of it goes to pay interest, the balance is hardly reduced at all.

**frugalfranny** · 06-26-2009, 03:21 AM

Have their credit card but no balance so might not get that one.

Chase and Bank of America are horrible banks. Unfortunately, B of A bought out the cards I had......UGH!

**phoeny_moonstar** · 06-26-2009, 06:20 AM

I thought the new CC laws didn't go in effect until 2010? So until then they can pretty much do whatever. Not that anyone likes it. It's crappy, and they'll nickle and dime you any way they can.

CC free is the life for me!!

**omalleyc** · 06-26-2009, 08:24 AM

This exact same scenario was on the Dave Ramsey show yesterday. Luckily we don't have any credit cards and phoeny is right - the new laws don't go into affect until next year. According to something else I read yesterday banks are doing this so they can get as much money as possible before they have the smack-down put on them.

**Greebo** · 06-26-2009, 08:57 AM

Actually as someone else said, in THIS case, it's NOT a case of "greedy so'n'so's" but a move that will cost them profit. The more you pay off as part of the principal portion of the minimum payment, the less you owe, and the less interest accrues.

It's a trade off for them - sacrificing short term profit for longer term stability, and a wise choice on their part IMNSHO.

**tervsforme** · 06-26-2009, 09:49 AM

Yes, I got this notice and it freaked me out at first. I did take advantage of their balance transfers, I did 3 of them and have a total of $17,000 on there and my interest this month is only $66.00. I have been sending extra every month, but this is going to be a bit tough for me. My payment will be going from $340 to $850. Now I realize, that my balance will be going down quicker as well as the minimum payments, so that's good. My overtime starts in September, so I should be OK, I'm going to get some stuff listed on E-Bay and Craigs list the next few weeks to get some extra cash in case I run a bit short, yes I already have an emergency fund. The bright side with this is that I will be debt free within 2 years!! I'll have a couple of tight months, but I'm ok with that. I was tightening my belt anyway, so now I'll just have to make sure I do it, there won't be any slackage for a few months. I'm up to the task...

**walker24** · 06-27-2009, 11:13 AM

Thanks for all your replies. This is the card we transferred everything we could on to "consolidate" our debt. I will have to revise the snowball as this was our last debt to pay off because of the interest rate. sigh....I am just going to look at the bright side. We will only be chase customers for 2 more years instead of 5+.

**coup** · 06-28-2009, 11:40 AM

We received the same notice. It was the card that I had taken a balance transfer/low interest for life deal. My DH was furious! We are lucky, as I paid off card #1 this month and this particular card is card #2, ie, next to be paid off. So extra was already being budgeted for it.

My heart goes out to those of you who didn't have such lucky timing. If Chase does this to my other cc's, then we will be hurting.

This only adds fuel to my "Get out of Debt" fervor.

**tervsforme** · 06-28-2009, 11:46 AM

Originally Posted by walker24

Thanks for all your replies. This is the card we transferred everything we could on to "consolidate" our debt. I will have to revise the snowball as this was our last debt to pay off because of the interest rate. sigh....I am just going to look at the bright side. We will only be chase customers for 2 more years instead of 5+.

This is the card I used to consolidate also. And I totally agree, having my debt paid off in 2 years is going to be great. The first few months are going to be really tight though. I think I'm going to break my payment in half and pay half with each paycheck, that will help me some, plus the interest should go down a bit faster as well. I stocked up on some stuff this weekend and I'm getting stuff to list on E-Bay and Craigs List. I've been putting it off, but no longer!

**omalleyc** · 06-30-2009, 10:45 AM

I read today on the Dave Ramsey forum that this is because Congress passed a law in 2003 requiring minimum payments be raised since people weren't paying principal because minimum payments were so low. Someone also said that law required the credit card companies to disclose how long it would take to pay off the debt by making minimum payments.

I haven't found anything "official" on it, other than people talking about it back in 2005ish but if that's the case, everyone else should brace themselves for an increase.

**a.nonymous** · 06-30-2009, 11:21 AM

Originally Posted by Greebo

Actually as someone else said, in THIS case, it's NOT a case of "greedy so'n'so's" but a move that will cost them profit. The more you pay off as part of the principal portion of the minimum payment, the less you owe, and the less interest accrues.

It's a trade off for them - sacrificing short term profit for longer term stability, and a wise choice on their part IMNSHO.

This was my first line of thought, too. Until I heard that they only raised the minimum payment on the lowest interest rate cards. Apparently, they even offered keeping the low minimum payment rates in exchange for switching to a higher variable rate.

Smells like a nasty move from Chase with the perfect scape goat (OCC) lined up.