Chase RateJacked me after lowering interest steadily over 2 years

[GregB]

Since late 2007 Chase has steadily lowered my interest rate from 11.9% to the current 7.24%. The last drop to 7.24% was early this year while people were starting to complain about RateJacks from Chase. I assume this means they have been charging me prime + 3.99%.

The change in terms says prime + 10.99%, currently 14.24%. It is effective October.

I PIFed about half the months this year and have paid them $96 in interest this year on balances up to $5300 against a $20,000 CL. That payment pattern is similar to 2007 and 2008. I used the card for $26K in purchases this year, which should have made them around $500 in transaction charges.

I would never pay anyone 14.24% interest. They won't get a penny in interest on that account now. Perhaps they wanted to raise the interest rate to the point where I would always PIF. The problem with that logic is that now I will use it less since I have to be SURE that I can PIF by the due date. Why would I use that account when I have 3 other cards at 7.9%?

Not very smart, Chase!

Message Edited by GregB on 08-04-2009 01:32 PM

[Anonymous]

Sorry to hear that. Par for the course right now with Chase. I am out of town and cannot get my mail until Thursday and I am fully expecting a letter from Chase, for whatever reason they want, waiting for me....if they do not cancel the card altogether.

I am sure at some point I will be boarding the same boat you are on.

I keep a zero balance on my cards, however, I feel badly for those who cannot at the moment!

Message Edited by plasticman on 08-04-2009 01:51 PM

[Watchmann]

Do not be surprised to see a CLD sometime in the future as well.  A $20k CL from Chase is ripe for the picking to be severely downgraded.  They are in a slash and burn mode right now.

[GregB]

Looking at the new terms effective in October and checking current offers shows:

- They have a current BT offer. 4.99% for 23 months, 2.99% for 18 months, 0% for 9 months. 3% transaction fee with a $249 max on each of the three offers.

- The new BT terms will be 5% fee with no max. 

If I BT at least $15K, the 3% fee with a $249 max starts to make sense. Assuming I make payments not much above minimums means that the 23 months works out to 5.8-6% effective annual rate, the 18 months works out to 3.85-4%, and the 9 months is 1.85-2%. In each case the lower rate was calculated assuming no payments. Paying minimums increases the effective annual rate but not by much and isn't worth calculating.

I have two 0% BTs expiring next month. One with a $12K balance that will change to 9.24% with BMW and one with a $5500 balance that will change to 5.99% with Cap One. My solution seems to be pay off my $4900 current balance with Chase in the next 4-5 weeks, deposit a BT check into my account and pay off the two expiring BT offers. The FICO hit from the high util on Chase will be offset by the two cards going to zero util.

This seems to be a perfect example where having numerous credit cards helps. Chase is going to have a fit because my only other Chase card has a 2 year 3.99% no fee BT at 80% utilization. They will probably try to CLD both accounts but, after all, they caused the problem. 

[Anonymous]

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@Watchmann wrote:
Do not be surprised to see a CLD sometime in the future as well.  A $20k CL from Chase is ripe for the picking to be severely downgraded.  They are in a slash and burn mode right now.

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You spoke a mouthful.  I can't agree more.

[Anonymous]

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@GregB wrote:

Since late 2007 Chase has steadily lowered my interest rate from 11.9% to the current 7.24%. The last drop to 7.24% was early this year while people were starting to complain about RateJacks from Chase. I assume this means they have been charging me prime + 3.99%.

The change in terms says prime + 10.99%, currently 14.24%. It is effective October.

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Most of the earlier APR decrease was probably due to the prime rate dropping.

I just got a similar letter yesterday - my 5.24% APR is going to 12.24%. So it appears Chase may just be adding 7% to our select formerly-low-APR group. No matter to me - my account only carries a low-APR-for-life BT at the moment, and when that's paid off it will become a PIF only card, so Chase can play with the APR all they want ...