June 23rd, 2009 by Kenneth Long
Chase has had many changes in 2009, some of which have angered certain cardholders that may have been carrying low interest balances for at least 2 years. One change that has been very good for consumers has been the improvement in benefits that Chase is providing through debt management programs. In fact, their benefits are now among some of the best available through credit counseling.
Chase is providing very good benefits to its cardholders that take the step of getting out of debt by completing credit counseling and enrolling in a debt management program. Its almost as if Chase is giving an ultimatum for cardholders that may be overextended on their credit accounts.
Cardholders with good credit may opt to pay off the accounts quickly or transfer the balances to another lender to avoid the 5% minimum payment requirements. However, those with lower credit scores and those who are having trouble making all of their monthly minimum payments may need to seek credit counseling.
What Chase is Providing
These are the main benefits that Chase is currently providing to eligible cardholders through a debt management program:
- Lower Monthly Payment: Chase can lower the required monthly minimum payment from 5% down to 2.2% of the balance, which can reduce the minimum payment by more than half. In addition, Chase allows credit counselors the flexibility of making further cuts in the monthly minimum payment through a process known as call to action. This places additional discretion at the hands of a credit counselor that is trying to help a distressed cardholder balance their budget. A call to action label on an account can lower the minimum payment further. A standard call to action may allow for an even lower minimum payment of 2% of the balance. If the client has endured a hardship and is on the brink of financial ruin, then a hardship call to action may lower the minimum payment to as low as 1.75% of the balance.
- Lower Interest Rates: Chase is reducing interest rates on most accounts to as low as 7% APR through debt management. This may save hundreds or thousands of dollars each year while repaying the debt. Depending on the level of hardship, a client may be eligible for further reductions in their rates based on the call to action guidelines.
- Reage: Clients that have fallen behind would not have to catch the account up before receiving benefits. This would also help the client avoid fees, which Chase usually agrees to waive through a debt management program.
The higher minimum payments that Chase has imposed on certain accounts has certainly put some clients at risk of financial problems. However, these clients may get relief by taking action right away. Either they need to repay it quickly on their own, transfer the balance to avoid the higher minimum payments or get help through credit counseling.
Chase has indeed lost popularity points based on their changes to cardholder agreements. Those clients that are seeking credit counseling are finding though that the benefits have actually improved for Chase accounts.
This entry was posted on Tuesday, June 23rd, 2009 at 11:52 am and is filed under Credit Cards, Credit Cards: Chase, Debt Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.