JP Morgan Chase Eliminates Monthly Credit Card Service Charges
JP Morgan Chase & Co. has announced that it will refund monthly service charges on about 400,000 low interest credit cards. This move comes after thousands of consumers began to complain. JP Morgan Chase had announced to customers back in January that they were going to start to charge a $10 monthly fee and raise minimum payments from 2% to 5% of an accounts outstanding balance. However, it seems that JP Morgan Chase has had a change of heart. In April, Chase will cease charging the $10 monthly fee. Chase does plan to keep the minimum monthly payments at 5% of the outstanding balance.
It seems to me that some banks are trying to gain back customer confidence. JP Morgan Chase did accept $25 billion of TARP funds recently. Furthermore, credit card issuers have been under attack by consumers for unfair lending practices. Credit card issuers have recently cut cardholder lines of credit and raise interest rates on customers who have been paying their accounts on time every month. Card issuers claim that they have had to raise rates and cut credit lines in order to make up for losses due to delinquent accounts.
I think that the economy will eventually get better and credit will begin to flow again. The recent unleashing of the governments latest program TALF (term asset backed securities lending facility) will help credit to flow again. The idea behind the TALF is incentive institutional investors into purchasing consumer asset backed securities. Once these markets start to revive again, credit will start to unthaw, people will begin spending and jobs will start to be created instead of lost.
JP Morgan Chase & Co. has announced that it will refund monthly service charges on about 400,000 low interest credit cards. This move comes after thousands of consumers began to complain. JP Morgan Chase had announced to customers back in January that they were going to start to charge a $10 monthly fee and raise minimum payments from 2% to 5% of an accounts outstanding balance. However, it seems that JP Morgan Chase has had a change of heart. In April, Chase will cease charging the $10 monthly fee. Chase does plan to keep the minimum monthly payments at 5% of the outstanding balance.
It seems to me that some banks are trying to gain back customer confidence. JP Morgan Chase did accept $25 billion of TARP funds recently. Furthermore, credit card issuers have been under attack by consumers for unfair lending practices. Credit card issuers have recently cut cardholder lines of credit and raise interest rates on customers who have been paying their accounts on time every month. Card issuers claim that they have had to raise rates and cut credit lines in order to make up for losses due to delinquent accounts.
I think that the economy will eventually get better and credit will begin to flow again. The recent unleashing of the governments latest program TALF (term asset backed securities lending facility) will help credit to flow again. The idea behind the TALF is incentive institutional investors into purchasing consumer asset backed securities. Once these markets start to revive again, credit will start to unthaw, people will begin spending and jobs will start to be created instead of lost.
Labels: credit card service charges, credit cards, JP Morgan Chase, securitization markets, TALF, TARP
Credit Card / Financial news blog post by Todd Holliday at 8:43 PM 