Too big to fail banks, specifically Chase (JPM) are certainly not helping.

They have sprung a trap for folks that understood the terms of their “for life” balance transfer offers and didn’t screw up in a way that put them into the usurous interest category. This flaired up at the beginning of the year when they not only raised minimum payments on those responsible customers but also added a $10 a month fee. They quickly lost the class action lawsuit filed over the fee.

They jacked the minimum up on more responsible cardholders in August. I had thought that might die down quickly but the momentum for a revolt seems to be building. Consumers Union got involved in September.
“By changing the terms of these promotional financial products Chase is significantly harming the economic stability of the families who make up its consumer base. We ask that Chase reconsider this devastating change in terms.”

You think a jump in payment from $200 a month to $500 on a $10k balance might push some folks over the edge or at least cause them to further cut spending? I do. You think that extra hit on folks that have already cut back and probably never paid interest on credit card PURCHASES in the first place might keep them out of stores and put yet more retailers, contractors and other businesses at risk? I do.

You think maybe JP Morgan shouldn’t have paid back their TARP money just yet? I certainly do. This is a clear bait and switch scheme since they only offer two solutions: Switch from 3.99% (or 2.99% or 4.99%) to 7.99% interest for less than 2 years to restore the 2% minimum or work with their so-called proactive solutions group (an option they don’t offer unless you already know about it) and ruin your credit. But I think the option they are most hoping for is a short or missed payment so they can jack the interest up to 30%. I guess when you borrow at 0%, getting back 4% isn’t enough.

I’m sure they can no longer sell their ABS bonds for CCs. Watch out JPM holders - they will have a block buster quarter but unless they can lure many, many really rich folks away from American Express, the credit card and retail banking divisions are heading for zero.

What does Chase Card Services CEO Gordon A. Smith know that you don’t? He sold $1.8 million of JPM stock in late July, just before the most recent round of minimum payment increases hit.

PR from Consumers Union, National Consumer Law Center, USPIRG:

http://www.consumersunion.org/pub/core_financial_services/014704.html

And a couple of other enlightening sites:

http://bloggersagainstchasebank.blogspot.com/

http://www.consumeraffairs.com/credit_cards/chase_credit_cards.html

Finally, a couple of protest videos:

http://www.youtube.com/watch?v=vt-a_8LYzrw

http://www.youtube.com/watch?v=LaCpi0m1wew

keemar

Related Posts:

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• According to the 2rd qtr. OCC Derivative Report, the 5 largest holders of derivatives (commercial banks) hold 97% of all derivatives.
• Just reviewed the 2rd qtr. OCC Derivative Report (I know…a little late).
• JPM’s BS redux…

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