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November 23, 2015

Chase Ups Credit Card Costs But Does So Transparently

Filed under: Finance — Edgar (aka MrConsumer) @ 6:31 am

How many times have you gotten a notice from your credit card issuer announcing “changes” to your credit card agreement but you can’t quite figure out exactly what they’ve done?

Most times, they simply announce that your new APR is so and so, or the fee for a late payment is $X. Without going back to your original agreement which you don’t have, you have no idea how much more you are being gouged. (We all know that rates and fees rarely go down.)

In a refreshing change, some Chase Freedom cardholders last week received a huge 10.5″ by 17.5″ notice about “important changes to your acccount terms.” Here is what made it even more remarkable.

Very large *MOUSE PRINT:

Chase terms
Click to enlarge

They actually show you, side-by-side, what the old terms were and what the new terms will be. It certainly doesn’t convey good news, with finance charges jumping over five percent, and late fees going up as well. But, at least the cardholder wasn’t left in the dark about what exactly they were doing. A big hat-tip to Chase.

On the other hand, why Chase was raising rates wasn’t quite as clear:

The changes to the Annual Percentage Rates (APRs) described below are to standardize these terms for cardmembers who have the same type of account.

Huh?

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4 Comments

  1. I appreciate that Chase put the old and new terms side-by-side, but I do not understand their reasoning.

    If they were just increasing the maximum APR I would understand, but I thought the the reason why credit scores exists is because people DON’T want standardized terms for interest rates. I know I prefer my interest rates to be lower if I have better credit than someone else.

    Comment by Wayne R — November 23, 2015 @ 10:32 am
  2. First off, I hate Chase Bank.

    That being said, though, most of these fees are ‘penalty’ type fees. Late payment, overdraft, returned payment.

    The balance transfer and cash advance fees are just a money grab.

    Wayne R: This does not appear to affect your individual interest rate on your account. Your personal credit rating ‘should’ determine that rate.

    Comment by bobl — November 23, 2015 @ 11:57 am
  3. HOW COULD ANY SANE PERSON ALLOW A BANK TO DICTATE SUCH TERMS AND PENALTIES JUST SO YOU CAN SPEND YOUR OWN MONEY-PUT YOUR MONEY IN YOUR WALLET!…THEN USE IT FOR SOME PROFESSIONAL HELP.

    Comment by ROGER MOORELY — November 23, 2015 @ 12:32 pm
  4. I like the idea of side-by-side comparison. I am sure the truth in disclosure will not last. The reason the rates are going up is easy to understand in this neighborhood. Just look around to the fancy high rises with major bank names and look at the cars they drive. Your increased rates are paying for it!

    I received a letter from a major credit card yesterday simply stating they are dropping my ‘free’ accidental death or dismemberment policy coverage. I never knew I had it and luckily never needed it.

    Comment by tom gauvin — November 24, 2015 @ 9:24 am

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