Joe1690

Bank One just sent me a change in terms of my cardmember agreement that was about 2 pages long. These changes will become effective June 1, 2005 except for the minimum balance which will become effective August 1, 2005. Here are some of the highlights.

1. MINIMUM PAYMENT: The following replaces the section entitled “Minimum Payment”: Minimum Payment: You agree to pay at least the minimum payment due, as shown on your billing statement, so that we receive it by the date and time payment is due. You may pay more than the minimum payment due and may pay the full amount you owe us at any time. If you have a balance that is subject to finance charges, the sooner you pay us, the less you will pay in finance charges because finance charges accrue on your balance each day. Your billing statement shows your beginning balance and your ending balance (the “New Balance” on your billing statement). If the New Balance is $10.00 or less, your minimum payment due will be the New Balance. otherwise, it will be the largest of the following:$10.00; 2% of the New Balance; or the sum of 1% of the New Balance, total billed periodic rate finance charges, and any billed late and overlimit fees. As part of the minimum
payment due, we also add any amount past due and any amount over your credit line.

2. TRANSACTIONS IN FOREIGN CURRENCIES: The following replaces the section entitled “Transactions in Foreign Currencies”:International Transactions: International transactions include any transaction that you
make in a foreign currency or that you make outside of the United States of America even if it is made in U.S. dollars. If you make a transaction in a foreign currency, Visa International or MasterCard International, Inc. will convert the transaction into U.S. dollars by using its respective currency conversion procedures. The exchange rate each entity uses to convert currency is a rate that it selects either from the range of rates available in
the wholesale currency markets for the applicable processing date (which rate may vary from the rate the respective entity itself receives), or the government-mandated rate in effect on the applicable processing date. The rate in effect on the applicable processing date may differ from the rate on the date you used your card or account. We reserve the right to charge you an additional three percent (3%) of the U.S. dollar amount of any international transaction, whether that transaction was originally made in U.S. dollars or was made in another currency and converted to U.S. dollars by Visa or MasterCard. In either case, the 3% will be calculated on the U.S. dollar amount provided to us by that entity. The same process and charges may apply if any international transaction is reversed.

3. USING YOUR ACCOUNT: The following is added at the end of the section entitled “Using Your Account”:You promise to use your Account only for valid and lawful transactions. For example, internet gambling may be illegal in some places. It is not our responsibility to make sure that you use your Account only for permissible transactions, and you will remain responsible for paying for
a transaction even if it is not permissible.
4. CREDIT LINE/AUTHORIZED USAGE: The following is added at the end of the section entitled “Credit Line/Authorized Usage”: Your total available credit may not be restored for up to 15 days after we receive your payment.

There were also changes to interest accrual on severely delinquent accounts, arbitration, and several other things.

The two things that bother me the most are the credit line/authorized usage section which is clearly designed to increase the bank's profits since if I have paid off my balance my credit line should not take 15 days to be restored. The other thing that bothers me is the new foreign currency structure where they can charge 3% on all foreign transactions even if they are placed in US dollars. This bothers me because more international transactions are being set up so that they are reported in dollars meaning I will have to pay 2 conversion fees just to use my credit card. ONe to the institution where I purchase the product and 2 to the credit card company. Paying a 6-8% premium is outrageous and the credit card companies don't deserve this extra money since they are not converting any currency. Therefore, I will either use my mastercards which supposedly haven't changed to this heavy handed tactic or to my American Express cards that charge only 2% and if it is in US dollars don't charge me anything else.

Sincerely,

JC

Counsellor

Which Bank One card is it? Marriott Rewards, or ????

Joe1690

The card I have is the World WildLife Fund Visa but this wasn't part of my statement but a separate letter outlining the changes to this card. Therefore, I presume it applies to all cards. The reason I got it so quickly is that I am signed up for online statements online so since my statement closed April 8th it is listed on the website as of april 8th even though my statement is not posted yet.

Sincerely,

JC

JoeSixpack

I have a BankOne Priority Club card and noticed the same things. The card is now in cold storage.

ananthar

I think these are standard Chase terms (who recently bought Bank One). Chase doesn't like you to use your credit line more than once per cycle. In the past they would simply freeze your card if you tried to pay it off more than once. Thus the new terms (may hold payment 15 days) is reasonable, provided it is not applied to the first regular payment.

Banks have a legitimate concern that your payment may bounce and the traditional immediate credit effectively extends you additional credit before the check has cleared.

Joe1690

Well, if these are chase's standard terms this comes as a suprise to me seeing as I have had a chase card for 2 years now and whenever I have paid my bill the credit line has instantly been raised by the amount of my payment. I use my bank's bill pay service though which means they take the money out before chase even receives it. Also, I notice that chase's terms have changed to mirror bank one's more than the vice versa. For instance chase used to have 2% foreign currency transaction fee but now it is 3%. They used to only charge 2% for balance transfer $5 min $45 max but now charge $5 min max $50 with 3% charge. They also have switched from a single to a double billing cycle just like bank one has. Also, chase use to infrequently send convenience checks but now I get them at least once a month just like Bank One has always done. Therefore, I disagree that these changes are chase's typical terms and conditions.

Sincerely,

JC

wahooflyer

This is ridiculous, especially considering that online payments clear within a couple of days and can't be stopped or bounced like a paper check.

I have made multiple payments mid-cycle on my British Airways Visa as I only have a $2000 credit line (plus however much they'll let me go over each month with the Signature benefits). Apparently I won't be able to do this anymore as my credit line will be "frozen."

At least with time (and especially if I sockdrawer the card or keep a low balance on it) Chase is likely to raise my credit limit and Signature overlimit ability, so perhaps I'll use the card more at that time.

Back to the Amex Green for my business expenses, then. At least Amex restores my charging ability when I make multiple payments in a cycle on my charge card (but not my SPG credit card). My exposure limit on the Green card is somewhere around $7000 now that I've had the account for over a year (used to be $1000 due to my limited credit history) so that makes it a much more sensible choice to put my reimbursable expenses on.

Chase, you're shooting yourself in the foot with this new policy.

ananthar

Just to clarify, Chase in the past would give immediate credit, but then freeze the account arbitrarily if you try to pay off the full credit line more than twice per cycle. Hence the proposed terms are actually better. Not sure who is responsible for the new terms (Chase or the former BankOne)

In addition, I suspect, the new 15 day hold will not be applied if you pay online at the credit card's web site (hence it says "may not be applied for 15 days"), since then they get the money by EFT within 2 days (and Chase does not post the payment until 2 days after you schedule it unless you pay a $14.95 fee for same day posting).

Steve M

I don't see how this would increase the bank's profit (other than by reducing bad debt). They're not saying that they're not going to credit the payment the day it is received, this stopping the accrual of interest. All they're saying is that they might not restore that amount to your available credit for up to 15 days.

Also, the "up to 15 days" is reasonable in certain circumstances. As others have reported, they usually restore it immediately. But cases where they may want to delay available credit restoration might include when the payment is unusually large, or when there's something unusual about the check itself.

For example, if you had a $19,000 balance and a $20,000 credit limit, and sent in a check for $19,000 that was a "starter" check numbered 101 without your name imprinted on it and signed by someone other than the cardholder, I would expect them to wait 15 days before restoring your available credit. I'm sure that things rachet down depending on how more close to "normal" the payment is.

Joe1690

The reason I say it will increase the bank's profits is because a lot of consumers don't read their terms and conditions and the notice of changes and therefore wrongly presume that when they pay the bill their credit line will be restored immediately. As such, if I have a credit line of $2000 for example and made $1600 of purchases the previous month and then pay off my bill and spend an additional $600 before the 15 days is up on the credit line restoration according to the new policy then I will be hit with an over the limit fee, won't be considered for a credit line increase and additionally may be considered in default thus raising my interest rate. As such, this does make money for the bank with card members who either have extremely small credit lines or those who spend close to their credit line in a month.

Sincerely,

JC

Alcibiades

So BankOne/Chase CC users used to get charged a total of 2%, 1% from MC or VISA and 1% for themselves. But now that MC and VISA have dropped their 1% surcharge, BankOne/Chase wants to take 3% for themselves ?!

Steve M

There's nothing that indicates that they are going to start holding all payments or most payments for 15 days. In fact, the delay in credit restoration for some payments has been going on all along. It just seems that they are now making specific provisions for this in the agreement.

Steve M

I think it's very unlikely that MC and Visa are giving up their 1% fee for doing the currency conversion. It's just that they are no longer adding it into the amount of the transaction that they present to the bank. It's very likely that this fee is now being collected from the bank as an separate charge.

Alcibiades

Why do it that way ?

Alcibiades

Using a Chase credit card has meant 3% for years, 2% for Chase and 1% for MC or VISA. For whatever reason, MC and VISA arent charging each transaction with the 1% anymore. Dont know why they changed or the motives, but on the surface thats how it is.