And get this - chase has turned those cancelled cards into income - further boosting and boasting about profits!!
http://www.nuwireinvestor.com/blogs/investorcentric/2009/07/jpmorgan-creates-illusion-of-profits.html
Check out these quotes from the above article
"To the contrary, many analysts – including Money Morning Investment Director Keith Fitz-Gerald – say these profits are merely a mirage created by an obscure accounting rule that allows banks to transform “toxic debt” on their balance sheets into income."
"In JPMorgan’s case, the firm took on $118.2 billion in toxic debt when it acquired Washington Mutual Inc. last year. As a receiver of that debt, JPMorgan was allowed to mark that debt down to “fair value,” or $88.65 billion. But now, the bank says that those same debts may appreciate by some $29.1 billion over the life of the loans. And as those loans are paid back, that money is booked as profit."
What this means (in english) is that Chase gets the opportunity to take our WAMU credit cards - cancel or raise rates on them from the original negotiated rate with the original bank - write down a portion of their "bad" debt (those already defaulted and/or in default) then force us all to pay back our loans at a higher rate (and make up some money from the lost "bad customers) and book it all as profit. To put it in layman's terms, OUR BANK, OUR RULES,
@Underh20 wrote:You missed this part:
"JPMorgan's credit card services division posted a $672 million loss in the quarter, compared with a year-earlier profit of $250 million, as more cardholders default. Revenues also fell with the introduction of new rules designed to protect consumers."
Good point - I didn't miss this part. None of the banks expect to make profits on credit cards this year - with an increased amount of unemployment more clients are going to use credit cards more than ever. I understand this part. The shady thing behind all of this is that most banks have gotten themselves in this mess by keeping most middle class credit card borrowers "in debt" with no way of return. I'm not mentioning that famous speech that was made (chickens have come home to roost), however Chase should have realized that when they purchased WAMU just like WAMU realized this when they purchased providian.
Yes the point is not regarding credit and good vs bad accounts, point is that chase should have made that clear when they sent over the letter saying that they were going to be the new cardholder that "we are going to let you keep your account open for xxx period of time on a trial basis then re-evaluate you to see if you are credit worthy. If so, we will keep your account open. If not, we will notify you IN WRITING BEFORE we close your account". NOT SO - they just said "we closed your account your screwed, bye-bye"
My sister got her Chase (Wamu) cc closed effective 7-10-09 and DH had his closed effective 7-14-09. Neither got a letter in advance, just a decline when they tried to use the cards. Chase told both that they closed due to information obtained from Experian. I am worried that my card will be next.
Bronco, could you please PM me about how you got your card back. DH and I are in the midst of getting a mortgage, we've been pre-qualified, but that could be jeopardized by the time we go under contract and are re-evaluated by the bank underwriter, right?