By Mark Huffman
ConsumerAffairs.com
July 22, 2009
Last month JP Morgan Chase targeted its low-interest credit card holders with a big hike in minimum monthly payments, setting off howls of protests. This month Chase appears to have launched a campaign to close some accounts altogether.
David, of Gilbert, Arizona, said his Chase account was closed and he only found out when he tried to use the card.
"I tried to charge $25 to the card and it was denied. When I called Chase they said it was due to my credit report," he told ConsumerAffairs.com.
Tavis, of Alexandria, Virginia received a letter saying Chase is closing her account. She said she was told it was due to high balances and low available credit.
"This was a WAMU account that I've had for over three years," she told ConsumerAffairs.com. It was never late and I always paid over the minimum."
In fact, many of the complaints to ConsumerAffairs.com about Chase closing credit accounts appear to come from former Washington Mutual customers, who became Chase cardholders when Chase acquired WAMU.
Many consumers also are upset about the way they find out their credit card accounts have been closed. They say they learn about Chase's action when they try to use the card and it doesn't work.
"I don't have a letter, I don't have a packet that indicates that they have the right to shut off our accounts without our knowledge," said Susan, of Santa Clara, California. "They are okay with us being embarrassed by our cards being declined in stores or wherever we shop."
Denise, of Broadway Heights, Ohio, thinks her account closing has something to do with the fact that it's a former WAMU account, and sees a pattern with other complaints.
"They said they sent a letter over a week ago and I have not received it as of yet," she said. "I always paid my card off in full every month. Never left an outstanding balance. Also, customer service said the same thing about a credit agency report on me. I was also a customer of WAMU."
In fact, all credit card companies are taking action - some more aggressive than others--to reduce their portfolios. Customers that have the slightest credit blemish are being weeded out, or hit with a large interest rate increase. Even cardholders with good credit are being lumped in with more questionable customers.
Credit card companies say they are only protecting themselves. With rising default rates, they must prepare for the worst. Left unsaid is the fact that new credit card reforms take effect in February, which will restrict their ability to use these tactics--so they're getting as much revenue as they can while the getting is good.
