MSNBC: Did Chase pull a credit card bait and switch?

[brentspeak]

http://www.msnbc.msn.com/id/30111663/

Did Chase pull a credit card bait and switch?
Consumer advocate: 'I have never seen a credit card practice this abusive'

By Herb Weisbaum
msnbc.com contributor
updated 2:55 p.m. ET, Wed., April 8, 2009

Until recently, Brian Woods of Akron, Ohio was a happy Chase Bank customer. Several years ago he accepted a promotional offer to use the bank’s “Lower than Prime” balance transfer checks to move high interest debt to his Chase credit card. The Chase solicitation promised: “No tricks. No gimmicks. Just savings.”

The offer was straightforward. Woods would pay a 3 percent transfer fee and get an amazingly low interest rate of 3.99 percent APR “until the balance is paid off.” Woods says he paid “on time, every time” in order to keep that interest rate.

Woods became an angry Chase customer when he received his January statement and saw a $10 “monthly service charge” had been added. The bank also bumped up his monthly minimum from 2 percent to 5 percent sending his payment from $140 to $300.

“I’ve seen banks do screwy things before, but this was the most blatant breach of contract I’ve seen a bank do,” he says.

Woods called Chase customer service and was told the bank would drop the monthly fee and return the minimum payment to 2 percent if he agreed to a new interest rate of 7.99 percent for a year. After that, he was told, the rate could go even higher.

“I said no, that’s blackmail, I’m not doing it,” Woods tells me. He got off the phone and contacted a lawyer.

This was not an isolated case. Last November, Chase notified about 400,000 people with these low interest cards their minimum monthly payment would more than double and a $10 monthly service fee would be added.

“I have never seen a credit card practice this abusive,” says Joe Ridout with Consumer Action, the San Francisco-based advocacy group. “The people who accepted this offer were those who really read the fine print. They understood the fine print. Then Chase went and erased the fine print and wrote some new fine print that was very advantageous to the bank and lets them gouge their cardholders.”

[cliffordu]

1. I'm at WAMU - Since Chase took over I'm moving everything to my local

credit union.

To hell with the big banks.

[Catshrink]

9. WAMU cancelled my credit card because I hadn't used it in over a year.

bye bye!

[Another Bill C.]

2. The best thing to do is

join a local credit union and get a card through them. You may not get the lowest rate but you won't get "bait and switch," either. You'll have a voice in the way the CU is run and can even run for a spot on the board if you want.

[RaleighNCDUer]

3. Better yet, get a debit card from the credit union. The debit card

would be a MC or VISA debit, and can be used as you would use a credit card, but only up to the amount in your account. You just cannot carry a balance on the card, and incur no interest charges - you in fact EARN interest on the amount in your account.

Debt - bad.
Savings - good.

[DJ13]

4. Careful

Most debit cards do not offer the same consumer protections as credit cards do, even when the debit card has a Visa or MasterCard logo on them.

[uppityperson]

8. We found that out when disputed a transaction. Credit cards offer more protection

against bad things happening to your purchases. As we used a visa backed debit card, we thought it would but our credit union said it didn't.

[Blue_In_AK]

10. This is good advice.

I've had a VISA credit card through my local credit union for years, and the interest has remained at 10.5% since the beginning. In addition, when I got behind a bit a few years ago, they were very cooperative in working with me until I could get current, never raising my rate, cutting my limit or reporting me to anyone.

[OregonBlue]

5. I had exactly the same thing happen. Wrote to Ron Wyden. He has written me about this several times.

Then I got a nasty call from Chase letting me know that they know that I contacted my senator about their sleazy practices. In my case, since my payment doubled and I run a small business, I had to cancel my health insurance.

I wrote to Wyden again and let him know that Chase was harassing me and that I was not aware that he would have shared my letter of complaint with Chase. They called the other day to say they are dropping the $10 "account fee" but will not change the minimum payment back to the agreed upon rate.They are offering me a rate than is more than double the previous rate for one year. After one year, that rate can be changed to ANY interest rate that they so choose. I would have to be brain dead to accept that deal. I will continue to make my payments at the double rate until this is paid off and I will never do business with these crooks again.

They are sharks!! Chase CEO, James Dimon even had the gall to complain a couple of weeks ago that CEO's and Bankers are being vilified. Wow, he is so clueless.

NEVER, NEVER, NEVER DO BUSINESS WITH CHASE. THEY ARE CROOKS!!

[smoogatz]

6. How is this legal?

Since when is a contract not binding on both parties?

[rfranklin]

7. I think they have a clause that says they can change it...

at any time for any reason. I know that some cards have that line featured in their solicitation letters.

[K Gardner]

11. I just today watched "MAXED OUT", on Showtime - the documentary about predatory

lending, credit card companies, credit scores and bill collectors, etc.

It was excellent and I'd recommend anyone who hasn't yet seen it to watch or rent it if its available for rent. Scary stuff.

[ThomCat]

12. The fine print always says they can change the terms at any time.

So they give themselves the right to screw us. We are just supposed to trust them and have faith that they won't.

Right.

It's going to get worse. This is baby steps. As they get away with this, they'll do it more often to more people until this becomes the standard. Soon we'll all be conditioned to expect that rates and terms change every year.

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