And now, children, it’s Storytime
With your old friend, J. P. Morgan Chase:
The new deal, effective in October, changes my interest rate from the 8.99 percent fixed rate to a prime plus 11.99 percent variable rate. The notice says that would set the rate at 15.24 percent at present — an increase of 60 percent overnight.
The card in question has no revolving balance on it, so I’m not overly concerned. But the thing is, the bank just gave me a grand incentive to make sure no revolving balance accrues to the card.
From a business standpoint, has Chase made a smart move? I mean what would you rather have as a money lender, a revolving balance at 8.99 percent making you some money or no balance at 15.24 percent or more making you no money?
As with any good story, there’s a punchline:
This statement was in the notice: “The principal factor we considered in amending your account was maintaining profitability on your account.”
So you plan to make my account more profitable by coaxing me to not use it? Brilliant! Give the guy or gal that thought that one up a $20 million bonus!
I’ve become persuaded that any bank’s collection of “principal factors” is nothing more than a reprogrammed Magic 8-Ball. Then again, they’re not about to tell you the true motivation, which is “Because we can.”
Especially in view of the fact that in the not-too-distant future, they can’t.
Kay Dennison »
15 July 2009 · 2:44 pm
I plain damn don’t use credit cards. It’s about damn time some restraints were placed on the money-changers.
Kim »
15 July 2009 · 3:34 pm
Credit card companies are nothing but legalized loan sharks. Chase is just one of the thieves oops credit companies that have made our decision to be a credit card free family.
Jeff Shaw »
15 July 2009 · 4:49 pm
I think we are coming full circle now with credit cards in America. What will the U.S. do for GDP if the consumer financial services sector stops zinging its customers?
What a hoax it has been. Like medical plans. don’t get me started.
Jason B. »
15 July 2009 · 9:51 pm
So good to see others that I can agree with on this. I closed my last credit card account five years ago and don’t make payments on anything except the house.
btw, my grandparents did just fine with the “if we can’t afford it, we don’t need it” rule. Then there are the people I know now, complaining about money problems, but they have a $500 phone on their hip! And they’re probably still paying that out. How does that make sense?
Ok, sorry, I did get started…
Donna B. »
15 July 2009 · 11:24 pm
The last of our credit cards got cut up in 2004. In 2006 we paid off our house and the last remaining vehicle loan.
We don’t really have a big cushion even now, as our house payment and vehicle loan were fairly small and we’re still paying insurance on both, of course.
This evening, our AC quit and we will likely borrow money to pay for a new one. It was 23 years old and probably not that efficient and… doggoneit, I hate borrowing money. But I hate sweating more.
Steve B »
16 July 2009 · 1:37 am
I’m assuming they hope to still come out ahead soaking the credit addicts. You know, the same people that financed mortgages they couldn’t afford, and so now are living off of credit cards, making the minumium payment every month.
Which is still basically legalized loan sharking.