However, Chase Bank is having the last laugh after all, and in my opinion, at Andrew Cuomo's expense.
Not only has Chase bank raised the monthly minimum payment from 2% to 5% on the same customers that they rescinded the 10 dollar a month fee on, but even if these customers call the Pro-Active phone number and negotiate a five year, 2% interest rate plan, that customer may still lose MORE THAN TEN DOLLARS EVERY MONTH once they accept that plan.
The average household has approximately 9,000 to 10,000 dollars in credit card debt. However, when we factor in that a certain percentage of homeowners have NO credit card debt, that just means that anybody with credit card debt probably has at least 15,000 thousand dollars of debt, or more.
Lets say that 7,500 dollars of that credit card debt is with Chase bank 4.99% and 7,500 dollars of debt is with another Bank at 9.99 percent interest. Lets keep in mind that the other bank rate at 9.99 is still considered a decent rate, and is probably higher than that for many people.
The consumer would save the most money by applying the largest payment they could afford to the higher interest rate card, and then just pay the minimum on the Chase Bank card. Interestingly enough, MOST Chase Bank credit card customers were already paying more than the 2% minimum, however they knew they could fall back on the 2% monthly minimum if necessary.
So every month, the Chase bank card is saving the consumer approximately 30 dollars a month in lower interest rate charges. If however, a consumer accepts the five year plan to pay down their debt, the Chase payment STAYS THE SAME each and every month, and the result is, less and less money is available to pay down the higher interest rate card.
This Proactive deal is definitely more flexible than accepting the 2% to 5% monthly minimum payment hike, but it is possible that by making the same paydown payment amount on the Chase Card debt every month, the payment that is going to the higher interest rate card will inevitably lag behind. Over time, the charge in accruing interest on the higher interest rate card will be MORE than the ten dollar a month fee that Chase Bank repealed!
The conclusion is, Chase Bank has fooled everybody into thinking the ProActive deal is automatically a fair deal, yet the ProActive Deal creates more income for Chase than the 10 dollar monthly fee would have generated among those same customers when one factors in the higher interest rate credit card debt those same customers will be delayed in paying down. Wow!
The bottom line is this, ANY OFFER THAT CHASE BANK MAKES TO TRY AND GET PEOPLE OFF THEIR CURRENT DEAL SHOULD BE MADE AS AN INCENTIVE OFFER, NOT AS AN EITHER OR PROPOSITION. This is a level of consumer abuse I have never witnessed before, and Barack Obama just stands by and approves.
Here are examples of "incentives" that Chase Bank should be using to get people off their low interest rate offer.
Agree to pay 5% instead of 2% every month and receive a 100 dollar gift card EVERY SIX MONTHS for doing it!Agree to the Pro-Active 5 year, 2% interest deal, and receive a 100 dollar gift card ONCE A YEAR.Agree to pay 3% every month instead of 2%. receive a 50 dollar gift card every six months.Agree to a pay 4% every month instead of 2%, receive a 75 dollar gift card every six month.
Do you see what is happening, by making crazy, insane demands of its own customers, Chase Bank is getting away with forcing their own customers to do something FOR FREE, that Chase Bank should instead be offering an incentive to get.
If Chase bank wants to entice me to change terms, I will listen, but I do not want to be FORCED into making a change, and then accepting the best of several rotten choices. In the meantime, Mr. Cuomo, I hope you don't think you accomplished anything significant by rescinding the 10 dollar a month Chase Bank fee, in many instances, that 10 dollar fee would actually have been cheaper than the alternatives.
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