Earlier this year, JP Morgan Chase surprised customers with a new fee and an increased minimum required monthly payment. For cardholders who carried large balances month to month, Chase began charging a $10 monthly fee and increasing the minimum payment from 2% to 5% of the balance. The change was announced last November for about 300,000 customers and took effect in January. (See our previous coverage and visitor comments.)
Andrew Cuomo, the New York Attorney General received so many complaints about the surprise move, he required the company to refund the income collected from these fees, totaling $4.4 million, back to customers. Even though the order came from the Attorney General’s office, the official statement from Chase cites customers’ concerns as the reasons for the policy reversal.
The idea that credit card companies can change the terms of their agreements with customers at any time and that customers do not have the same power short of canceling the card provides a strong argument for never carrying a balance from one month to the next, charging only what you can pay off with income before the payment is due. Realizing that we don’t live in a perfect world, this isn’t always possible. But watch for notices in the mail from your credit card company which sometimes these notices arrive in unlabeled envelopes. They can contain information pertaining to changes in your agreement which, if you pay attention, you may decide are not worth continuing your relationship with the company.
Updated May 26, 2009 and originally published March 31, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.