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I Got Caught in the Chase Credit Card Term Changes That Raise My Interest Rate. – Dave

“Dear Steve,

Caught in the Chase scam. Accepted offer of “low interest for the life of the loan” to consolidate debt with a Chase card. I have always paid on time and more than the minimum, and have not used the card for shopping or other purposes. They now advise that my minimum payment will go up to 5% (from 2%) and I cannot possibly meet their demand. I had already (too late) changed my standard of living. I don’t have cable tv, no cell phone, don’t smoke, drink, play the lottery, or have any hobbies that take my money.

Chase says there is no ‘opt out’ for this issue, other than to accept the 2% minimum with a much higher interest rate. Is there any recourse?


Dear Dave,

To sum up the situation succinctly, “you’re screwed.”

If the offer made to you was to either keep the 2% payment but have your interest raised or keep your current rate but pay 5% of the balance as a monthly minimum payment, you fell in the same trap as many others.

You might want to try and contact the Proactive Solution Team at Chase and tell them the new terms create a financial hardship for you. They may elect to close your card and keep your rate low. Call Chase customer service using the telephone number on the back of your card and ask for the Proactive Solution Team.

This trap is designed to trip people up and lead them into default which in turn increases income for Chase Bank. It is a brilliant but simple plan for Chase to achieve that goal.

Best little part of the plan is the fact that Chase is apparently not offering an opt out path for current card holders. And the unfortunate part is they don’t have to offer one. In 2010 new credit card laws will go into effect that will prevent such action but as of today, that behavior is perfectly legal.

Credit Card Accountability Responsibility and Disclosure Act of 2009
(Provisions will be effective on February 22, 2010, unless otherwise noted.)

Provides Enhanced Disclosure of Card Terms and Conditions

  • Requires issuers to provide cardholders with 45 days notice of annual percentage rate, and other significant changes (Effective August 20, 2009);
  • Requires issuers to disclose changes in card terms that take effect upon renewal;
  • Requires issuers to disclose the period of time and total interest that will be paid if a consumer repays a card balance by making only the minimum monthly payment;
  • Requires full disclosure in billing statements of payment due dates and late payment penalties; and
  • Prohibits the use of the term “fixed rate” unless the APR or interest rate will not vary for any reason over the period specified.

Requires Fairness in the Timing and Application of Card Payments

  • Requires credit card statements to be mailed 21 days before the bill is due rather than the current 14 days to treat a payment as late or deny a grace period otherwise offered (Effective August 20, 2009);
  • Prohibits issuers from setting early morning deadlines for credit card payments;
  • Requires that credit card payment due dates be the same day each month;
  • Requires that payment at local branches be credited on the same-day; and
  • Except for deferred interest balances, requires payments in excess of the minimum to be applied first to the credit card balance with the highest rate of interest.

Fosters Responsible Lending

  • Requires issuers to consider a consumer’s ability to pay when issuing credit cards or increasing credit limits.

Restricts Certain Fees and Interest Charges

  • Prohibits issuers from charging a fee to pay a credit card debt by mail, telephone, or electronic transfer, except for live services to make expedited payments;
  • Prohibits issuers from charging over-limit fees unless cardholder has agreed to allow the issuer to complete over-limit transactions and restricts the manner in which over-limit fees may be assessed;
  • Requires penalty fees to be reasonable and proportional to the omission or violation
    (Effective August 22, 2010);

  • Prohibits applying excessive fees to the credit available on low-credit, high-fee credit cards; and
  • Prohibits interest charges on debt paid on time (prohibits “double-cycle billing” and requires that when grace periods are offered, they must extend to partial payments ).

Prevents Unfair Increases in Interest Rates and Changes in Terms

  • Prohibits APR, fee, or finance charge increases during the first year an account is opened and subsequently on outstanding balances subject to limited exceptions that do not permit “universal default” or “any time/any reason” repricing;
  • Requires a credit card issuer who increases a cardholder’s interest rate to periodically review and decrease the rate if indicated by the review (Effective August 22, 2010); and
  • Requires promotional rates to generally last at least 6 months.

Strengthens Oversight of Credit Card Industry Practices

  • Requires Federal Trade Commission to issue rules that prevent deceptive marketing of free credit reports; and
  • Requires credit card issuers to post credit card agreements on the Internet and provide those agreements to the Federal Reserve Board to post on its website.

Enacts Safeguards for Young People Who Obtain Credit Cards

  • Requires issuers extending credit to consumers under the age of 21 to obtain the signature of an individual 21 years or older who will take responsibility for the debt or proof that the applicant has an independent means of repaying any credit extended;
  • Limits prescreened offers of credit to young consumers;
  • Prohibits increasing a credit limit unless both the cardholder and other jointly liable individual agrees to the increase; and
  • Increases protections for students against inducements to obtain a credit card, and increases transparency of affinity arrangements between credit card companies and universities.
    Enhanced Penalties

  • Increases existing penalties for companies that violate the Truth in Lending Act for credit card customers.

Gift Card Protections (Effective August 22, 2010)

  • Requires certain gift cards to have at least a five-year life span; and
  • Eliminates the practice of declining values and hidden fees for gift cards not used within a reasonable period of time.

If you’ve already trimmed your life to the bone and cut out everything that might be discretionary in your life, I think you might have reached the end of your financial rope.

Could you please tell me more about your situation and how much you owe to other creditors? Just give me an update in the comments section of this question.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

1 Comment

  • Dave,

    Thanks for your feedback. Actually I have several cards, all pretty well maxed out. I am fortunate enough to be employed, realized my error in credit world, and (without using my cards further) have always paid more than minimum. I was not offered the higher interest rate in exchange for leaving my min. at 2%. I only called to inquire about opting out and surrendering my card. They said there was no opt out policy. I will likely not be able to pay their increase to 5%, which in turn will allow them to increase my interest rate. Once that flag hits I assume other cards will start dumping on me as well. I am discouraged. I know my use of credit waw dumb, but barring the Chase attempt to increase their bottom line I had already changed my own purchasing behavior and was able to make my payments complete and on time. Now I face credit disaster.

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