What is the catch?

Rebecca · 01-21-2008, 05:05 AM

Warning: long story

I called Chase last week to try to get a lower interest rate on my card (currently 16% and my balance is about $7000). I called once before and they refused. So this time I called and told them I was closing the account. The customer service rep began going through the process to close my account and then (of course) asked why I was doing it. I told him it was because they refused to lower my rate and that I was just going to transfer the balance to a better card. I haven't had the Chase card long (maybe a a few years, it began as one of those 0% balance transfers gone awry).

He then told me that while he couldn't lower my rate, he could put me on a deferrment plan. Basically, for $60 and upon demonstration of economic hardship (a grocery bill totalling more than $50 and I don't have to use the Chase card), The interest would completely stop for 2 years. There would be no payment required for 2 years, and any payments I made would go directly to the prinicpal balance. There would be no additional charge other than the initial $60. It would not be reported to the credit bureau or affect my credit rating. If I did use the card, it would be at a ridiculously high % rate (I've already cut up the card). I have to wait 1 month for this to go into effect and then fax them the grocery bill and "activate" the deferrment plan.

I grilled him about the fact that this sounds way too good to be true. He finally said to me that 1) I've been a good customer in that I've charged a lot and 2) the bank is essentially counting on the fact that I won't pay off the $7000 in two years and that I'll go right back to charging a lot of $.

I know I'll have it paid off within the 2 years. I've already cut up the card, so I don't have to worry about using it.

I just feel like I must be getting taken in some way. Any thoughts???

Megan · 01-21-2008, 07:27 AM

It sounds like the catch is that they charge you $60 and that they assume you'll end up not paying it all off and then they'll charge you a ton of money at the end of the grace period.

I wouldn't agree to anything until I saw it all in writing though, and could read the fine print.

72Tiger · 01-21-2008, 07:30 AM

My thoughts are get the deal in writing, and read it very carefully. As far as what is in it for them, they at least will eventually get the $7k in principal vs losing your account completely if you transfer, or having to settle for a fraction of that if you default.

If you decide after everything, that it is what you ant to do, I would ask them to wave the $60 fee. It's worth a shot.

rstlne · 01-21-2008, 10:26 AM

A grocery bill more than $50 is economic hardship? I know many people here who regularly have triple-digit grocery bills!

Sounds like the deal is the bank expects that some of the people with whom they make this arrangement will end up not paying off the debt and will add more debt. Also, you'll be out at least the $60 but that's less than interest payments for two years. I too would recommend getting the deal in writing before deciding anything.

Rebecca · 01-21-2008, 03:15 PM

Thanks everyone for the advice.

Interestingly enough, I was checking my account online and I noticed that they hadn't charged me for the $60 yet. I then saw a link for this "special" deferment plan I had signed up for. It was quite different than how the rep described it to me on the phone.
Instead of the of the "one time fee" of .89 for each $ on the balance fee (the approx. $60) - it is .89 for each $ on whatever balance there is each month I suppose that is still significantly less than the finance charge I'm paying each month, but I'm so mad that the rep lied to me (I specifically asked about this), I'm going to call and threaten (and maybe I actually will this time!) cancel the account.

AND the site said nothing about grocery bills qualifying. Harumpf.

I hate credit card companies.

72Tiger · 01-21-2008, 03:53 PM

If they lied to you after you specifically asked them about something, I would even notify the Better Business Bureau. Lying has no excuse.

1littlething · 01-21-2008, 04:29 PM

I hate credit card companies. I know, I'm no help at all. But I just can't say that enough.

Julie Rains · 01-21-2008, 05:23 PM

Here's an article on this topic: Bank offer has strings attached.

It looks like the rep was trying to enroll you in a payment protector plan and then, if you qualify for payment protection due to economic hardship, then you could get your interest deferred. I would think of that kind of protection as being applicable to a job loss or debilitating injury rather than a $50 grocery bill.

Thanks for alerting us to this arrangement Rebecca.

Rebecca · 01-21-2008, 05:57 PM

Quote:

Originally Posted by Julie Rains

Here's an article on this topic: Bank offer has strings attached.

It looks like the rep was trying to enroll you in a payment protector plan and then, if you qualify for payment protection due to economic hardship, then you could get your interest deferred. I would think of that kind of protection as being applicable to a job loss or debilitating injury rather than a $50 grocery bill.

Thanks for alerting us to this arrangement Rebecca.

WOW. WOW. WOW.

That is the EXACT plan (well, minus all of the misinformation given to me by the customer service rep) they put out to me. And now that I think about it, I remember getting that $20 check from Chase - I was confused when I saw it because it looks like you are getting a "refund" for an overpayment (which I knew wasn't the case with me!) and when i read the fine print I threw it out.

I feel sorry for the Chase customer service rep I will be speaking to tom. It won't be pretty.

Isis Uptown · 01-21-2008, 06:10 PM

I have one of the only cards I could get with my then-bad credit a few years ago. My credit limit has gradually gone up, I noticed today that it went up by another $200. I looked at a few months worth of statements to see if they were moving up my payment date, or any other shenanigans; I always suspect the credit card company of shenanigans. (My husband has a Chase card and they've pulled some shenanigans; mine is not chase.) It looks like everything is above-board.

I always pay my balance down to zero at least once a month (I pay online, so it's possible to pay more frequently), so, though my APR isn't bad, it's really not an issue. I suspect that they think if they raise my limit, I'll charge more and perchance carry a balance. Not going to happen; I'll just being using a smaller percentage of my available credit, which reflects well on me!

01-21-2008, 05:05 AM	#1
Rebecca Member Join Date: Jan 2008 Posts: 96 Reputation: (32)	What is the catch? Warning: long story I called Chase last week to try to get a lower interest rate on my card (currently 16% and my balance is about $7000). I called once before and they refused. So this time I called and told them I was closing the account. The customer service rep began going through the process to close my account and then (of course) asked why I was doing it. I told him it was because they refused to lower my rate and that I was just going to transfer the balance to a better card. I haven't had the Chase card long (maybe a a few years, it began as one of those 0% balance transfers gone awry). He then told me that while he couldn't lower my rate, he could put me on a deferrment plan. Basically, for $60 and upon demonstration of economic hardship (a grocery bill totalling more than $50 and I don't have to use the Chase card), The interest would completely stop for 2 years. There would be no payment required for 2 years, and any payments I made would go directly to the prinicpal balance. There would be no additional charge other than the initial $60. It would not be reported to the credit bureau or affect my credit rating. If I did use the card, it would be at a ridiculously high % rate (I've already cut up the card). I have to wait 1 month for this to go into effect and then fax them the grocery bill and "activate" the deferrment plan. I grilled him about the fact that this sounds way too good to be true. He finally said to me that 1) I've been a good customer in that I've charged a lot and 2) the bank is essentially counting on the fact that I won't pay off the $7000 in two years and that I'll go right back to charging a lot of $. I know I'll have it paid off within the 2 years. I've already cut up the card, so I don't have to worry about using it. I just feel like I must be getting taken in some way. Any thoughts???

01-21-2008, 07:27 AM	#2
Megan Senior Member Join Date: Dec 2007 Posts: 307 Reputation: (63)	It sounds like the catch is that they charge you $60 and that they assume you'll end up not paying it all off and then they'll charge you a ton of money at the end of the grace period. I wouldn't agree to anything until I saw it all in writing though, and could read the fine print. __________________ Counting My Pennies

01-21-2008, 06:10 PM	#10
Isis Uptown Junior Member Join Date: Dec 2007 Location: New Orleans, LA Posts: 15 Reputation: (10)	I just got a limit increase. . . I have one of the only cards I could get with my then-bad credit a few years ago. My credit limit has gradually gone up, I noticed today that it went up by another $200. I looked at a few months worth of statements to see if they were moving up my payment date, or any other shenanigans; I always suspect the credit card company of shenanigans. (My husband has a Chase card and they've pulled some shenanigans; mine is not chase.) It looks like everything is above-board. I always pay my balance down to zero at least once a month (I pay online, so it's possible to pay more frequently), so, though my APR isn't bad, it's really not an issue. I suspect that they think if they raise my limit, I'll charge more and perchance carry a balance. Not going to happen; I'll just being using a smaller percentage of my available credit, which reflects well on me! __________________ Rosencrantz: I've frequently not been on boats. Guildenstern: No, no... What you've been is not on boats. Tom Stoppard

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01-21-2008, 07:30 AM	#3
72Tiger Senior Member Join Date: Jan 2008 Location: Knoxville, TN Posts: 292 Reputation: (33)	My thoughts are get the deal in writing, and read it very carefully. As far as what is in it for them, they at least will eventually get the $7k in principal vs losing your account completely if you transfer, or having to settle for a fraction of that if you default. If you decide after everything, that it is what you ant to do, I would ask them to wave the $60 fee. It's worth a shot.

01-21-2008, 10:26 AM	#4
rstlne Senior Member Join Date: Jan 2008 Location: New Jersey Posts: 364 Reputation: (115)	A grocery bill more than $50 is economic hardship? I know many people here who regularly have triple-digit grocery bills! Sounds like the deal is the bank expects that some of the people with whom they make this arrangement will end up not paying off the debt and will add more debt. Also, you'll be out at least the $60 but that's less than interest payments for two years. I too would recommend getting the deal in writing before deciding anything.

01-21-2008, 03:15 PM	#5
Rebecca Member Join Date: Jan 2008 Posts: 96 Reputation: (32)	Thanks everyone for the advice. Interestingly enough, I was checking my account online and I noticed that they hadn't charged me for the $60 yet. I then saw a link for this "special" deferment plan I had signed up for. It was quite different than how the rep described it to me on the phone. Instead of the of the "one time fee" of .89 for each $ on the balance fee (the approx. $60) - it is .89 for each $ on whatever balance there is each month I suppose that is still significantly less than the finance charge I'm paying each month, but I'm so mad that the rep lied to me (I specifically asked about this), I'm going to call and threaten (and maybe I actually will this time!) cancel the account. AND the site said nothing about grocery bills qualifying. Harumpf. I hate credit card companies.

01-21-2008, 03:53 PM	#6
72Tiger Senior Member Join Date: Jan 2008 Location: Knoxville, TN Posts: 292 Reputation: (33)	If they lied to you after you specifically asked them about something, I would even notify the Better Business Bureau. Lying has no excuse.

01-21-2008, 04:29 PM	#7
1littlething Member Join Date: Jan 2008 Posts: 49 Reputation: (10)	I hate credit card companies. I know, I'm no help at all. But I just can't say that enough.

01-21-2008, 05:23 PM	#8
Julie Rains Wise Bread Blogger Join Date: May 2007 Location: North Carolina Posts: 265 Reputation: (91)	Here's an article on this topic: Bank offer has strings attached. It looks like the rep was trying to enroll you in a payment protector plan and then, if you qualify for payment protection due to economic hardship, then you could get your interest deferred. I would think of that kind of protection as being applicable to a job loss or debilitating injury rather than a $50 grocery bill. Thanks for alerting us to this arrangement Rebecca.