Using Your Chase Credit Card Is Cause For A Rate Increase

Chase likes to raise the rates of cardholders whose only fault is properly using their credit card, according to an ABC 15 investigation. The rate hikes affect cardholders who do not exceed their credit limits or miss payments, with some APRs jumping from 7.99% to over 22%. From ABC 15:

“Chase quite often if they see someone getting somewhere near their credit limit, but never exceeding their credit limit, will nevertheless bump that person up,” [Joe Ridout of Consumer Action] said.

While Citibank announced this year it is pulling back from random interest rate increases, Ridout said Chase is forging ahead.

“We get more complaints of this nature from Chase than from all other issuers combined,” Ridout said.

The rate changes are almost always cloaked in small print, going unnoticed until they take effect when the next bill arrives. If your credit card company surprises you with a higher APR, call and complain. If they won’t lower your APR, get yourself a new card. Keep the old card around so your credit score doesn’t take a hit, but don’t use it for any new purchases.

Credit Card Interest Rate Hike – Is it Unfair? [ABC 15]
(AP Photo/Amy Sancetta)

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  1. The Walking Eye says:

    Discover’s been doing it to me, I’ve recently noticed. My interest rate’s up to ~22%, but I don’t have any purchases on there so I’ve not been terribly bothered with calling them about it.

  2. mrjimbo19 says:

    thats some great customer service there…

  3. qwickone says:

    Luckily I pay my balances in full every month, so while this applies to me, it doesn’t really affect me. I would stop using my Freedom card because of this, but it really does have the best rewards out there right now.

  4. TechnoDestructo says:

    @qwickone:

    Be careful, those rewards could include randomly changing payment due dates. That is why I no longer have a Chase card.

    (Also, they raised my “fixed” interest rate. Well, it was fixed when I got the card from Providian. I think from now on I’m canceling any card that gets sold to another bank.)

  5. SaveMeJeebus says:

    They did this to me about 3 three years ago, so I am a little wiser to the game now. I had a 2yr 0% intro rate and consolidated some college CC debt. In those two years, I had it down to about $750 and the rate went to 12.5%. That was ok and I actually expected worse from them. Then about 6 months later it jumped to 28%. No missed payments, no charges (ever), no other unfavorable credit on my end; I was just paying this card down.

    I wrote a letter to some of the higher ups expressing my irritation and I got a form letter along with a 50-page disclosure with the “we reserve the right…” highlighted. That day I called and cancelled the card and was treated like “oh well” and paid it in full. Never again.

  6. drkkgt says:

    I did exactly that. The rep on the phone even said that my account was great but he wasn’t allowed to drop lower. So I got a card thru USAA and the chase card sits in a drawer.

  7. CamilleR says:

    Chase did that to me, and when they wouldn’t lower the rate I paid off what I could, transferred the rest, and canceled the card. The experience taught me to check the interest rate on my remaining credit card with every statement and to look at every piece of paper that the credit card company sends me.

  8. Ha! I knew I wasn’t imagining it! Chase is out to get me. I’m actively working to pay off my Chase card and lock it up in a vault so I won’t use it again.

  9. beavis88 says:

    @technodestructo

    BofA just did that to me on my credit card (now) with them – the last bill I got left me with a whopping 8 business days to make payment. And they suggest mailing with 5 business days to spare…good thing I wasn’t on vacation. I only keep the card open as an emergency card – my wife also has one on the same account. I find it a wee bit suspicious that this had basically gone unused until my wife lost her normal card, and had to use this one for a few weeks…

    But what really amazes me about all this crap is what consumers put up with and what companies get away with. I have been beaten into submission by lousy service for so long that I have only one simple rule left for companies that want my business – don’t actively treat me like a toilet. That’s it – I don’t even expect fair treatment any more. Yet even with those incredibly low standards, most companies fail, miserably. Thank the banking gods for my local credit union, or my bank account would be under my mattress by now.

  10. Jason says:

    Well it’s good to know that I’m not the only one getting screwed. Capital One sent me a letter saying that they are turning my 7.9% fixed CC into a variable rate card that starts at 15.9%. And, I pay off my balance every month.

    I immediately cut up my Capital One card and will never use it again. It looks like I will not apply for a Chase card either.

  11. grouse says:

    Chase is the worst financial institution I have ever dealt with.

  12. louiedog says:

    They did this to me a few months ago. I went from 8% to 22%. However, they sent me a detailed notice about it. There was no hidden fine print or confusion. I paid off my small balance, cashed in on my rewards, and decided not to get another Chase card.

  13. vdragonmpc says:

    I had a run in with CHASE also. They chased me from their company. I had a balance and was using them to buy books for college. What CHASE didnt count on was the fact that I had a job and money to pay the bill.
    What was sad was I was told that the rate was raised because of a ‘credit check’ and my status changed… uhm I bought a house and was dealing with that. I fired them and never looked back..

    Other companies that like to play the rate game are: MBNA, Fleet (a division of MBNA), and citibank. I had run ins with their shenanigans over the years.

    They wait for you to carry a high balance and then start a rate treadmill. I had my CHASE go from 9% to 24.99… Why the jump? oh yeah there is nothing that can be done either.

  14. beyond says:

    Haha, my credit cards did this to me. Just don’t carry a balance and it’ll just be a funny story about the crooked credit industry. I just use credit cards for things like online purchases, so I can take advantage of the protections available, and the ability to immediately cancel it if I find the number’s been stolen. Doing that with a checking account would be a huge hassle.

  15. Abqnative says:

    OOH! The same thing happened to me where my interest rate jumped to 22%! I called and asked them why because I had no late payments and no where near the limit. The person told me that they randomly do a credit check and because I had recently made a big purchase ( I bought a used truck), my rate went up. I was shocked! She went on to tell me that I should have read the “literature” that came in the February billing to opt-out of the rate hike. Of course, I never read that garbage because most of the time it never makes any sense. Needless to say, we’ve paid off the credit card and it sits in a drawer at home as well. Its time to get back at these big businesses that rip us off! I know they have to make some profit but geez, this is ridiculous what they do to the American people.

  16. yg17 says:

    So is there a credit card company that doesn’t pull this sort of crap?

  17. cpisano says:

    I have an MBNA (now BOA) credit card and they raise my APR from time to time. I always pay it off every month and have not received any fee assessments in years. Everytime I call they tell me that since I am paying off my balance that it should not matter. I threaten to cancel and then they change it. Quite annoying.

  18. Dan25 says:

    i have never had a problem with my wells fargo credit card. they even offer a 10 day grace period on late payments. My wamu card on the other hand is a totaly differant story. They pulled a chase and capital one on me…

  19. @Abqnative:

    Don’t feel bad. I do read the garbage they send me and I called to opt out of the last rate hike and they tried to tell me they’d cancel my account if I didn’t accept the changes.

    I told them they mailed me a notice saying I could opt out and I was exercising my right to opt out. Within 5 minutes I was told I wouldn’t suffer the charges.

  20. Dibbler says:

    As always…find a credit union and get a visa or mastercard through them. My credit union has had a 7.9% interest rate for years. They don’t have a different rate for each customer. They appreciate the business and since they are a “non-profit” organization they aren’t constantly trying to figure out new ways to screw you.

  21. drbrn_grl says:

    Oh, no. I just got a Chase card because they were offering a low rate on balance transfers. I had to cancel my WaMu account because of the same thing — they hiked the interest rate to 29% for no reason. I also need to cancel my State Farm Bank card because they hiked the rate for no reason. Are there any credit card companies out there that don’t actively set out to piss off their customers?

  22. acambras says:

    @Dan25:

    Just paid off my Wamu card and it felt SO GOOD!

  23. hwyengr says:

    @YG17:
    Apparently, American Express. I’ve had a Blue card with AMEX since its launch in ’99, with a fixed 9.99% APR. I had some late payments in 2002, and went to a default rate of 24%, but after 12 months of on-time payments, they took me back to 9.99% where it’s been ever since.

  24. bravo369 says:

    wow credit cards, banking, cell phones, and insurance…the legal mafia. Something needs to be done about these industries.

  25. Crazytree says:

    Chase sucks.

  26. jabberwonk says:

    My wife and I recently had a problem with Chase. We had a Chase Amazon card that we had signed up for to get free shipping on items at holiday time. Apparently, even though I made purchases at Amazon.com using our debit card after that, Amazon kept resetting our default card to the Chase card. My last order that I placed was mistakenly put onto the Chase card (we didn’t realized this until months later).

    Problem #2 was that 2 years ago when we signed up for Chase online account access we used my wife’s yahoo.com e-mail. At some point in the year of Chase sending us statements on the unused card, they switched us over to online statements only. Yahoo’s over-aggressive spam filters must have been bouncing messages back to Chase since we never received them (even having Chase in the address book doesn’t guarantee delivery).

    So we have a $60 balance on a card that we know nothing about and that we’re not getting statements for. What does Chase do? A quick phone call or letter in the e-mail would have cleared this up instantly. No, the closed the account and wrote off the balance as an unrecoverable balance. We’ve been offering to pay it in full, plus late charges for 3 months now and they won’t even acknowledge the account now. And that took weeks of letters (phone calls only showed the account closed for no known reason) and no matter what we asked, we were told there was “no one” at Chase we could call about this.

  27. adrew says:

    Capital One recently raised my “fixed, forever” 4.9% APR to 9.9%. I have a couple grand of stuff (medical bills) on there from college and have been taking my time paying it off. I called to complain and was told that I could keep the old rate if I locked the card from any new purchases.

    So I signed up for one of the Blue cards from American Express and transferred the whole balance over there. The APR on new purchases is ridiculous (like 19%) but a fixed 4.9% on balance transfers until they are paid off. We’ll see how that goes.

  28. quagmire0 says:

    Stupid humans! Seriously, what effect is raising the rates ON PEOPLE THAT PAY THEIR BILL ON TIME going to have?

  29. SureThing says:

    Wow, that’s complete insanity. You won’t see me signing up for Chase anytime soon.

    I saw that comment about USAA. They are a really great company. After only one problem I’ve ever had with them, the customer service folks called me back to resolve the problem and offer a much better solution. They acted like they truly cared about my business.

    You think this story is scary? Check this out…

    [randomgeek.com]

  30. hwyengr says:

    @quagmire0:

    I’m sorry that I was stupid when I was 22 and ran up massive credit card bills. I’m sorry that I can’t write a single check to erase a couple of years of frivolous spending. While I’m correcting my errors, I’d like to pay as little interest as possible. So, yes. This does affect me, a sub-human that unfortunately carries a balance.

  31. prophetik says:

    I checked my Chase rate a couple weeks ago, and saw it was up to 29% !!! Needless to say, I sucked it up and just paid it off instantly…thankfully there wasn’t much of a balance, but that felt great to do.

    Now…should I just keep it open and not charge anything? Or cancel the account? Which is best for my credit score?

  32. ARPRINCE says:

    @quagmire0: what effect is raising the rates ON PEOPLE THAT PAY THEIR BILL ON TIME going to have?

    It depends. You could be paying your bill on time but are you paying off the total amount due for that month or just a certain amount?

  33. Phuturephunk says:

    Prophetik: As stupid as it sounds, leave the line open and just never use the card.

    For some reason or other, the major credit reporting agencies and the asshole bankers seem to think that closing a line of credit makes you a higher credit risk.

    Fuckers.

  34. Trick says:

    Chase was my first credit card, they were good for a while then I went with AmEx. I hadn’t used the card for a while and then noticed the rate was 24% and I had no balance! Then it went to 29%!!!

    Funny thing was just the other day I get some junk mail from Chase saying if I sign up for automatic payments, they will lower my interest rate to 28.49% and after a year of making payments, will lower my interest to 22%!

    I haven’t used the card in two years!

    AmEx Rewards is my preffered card since I pay my balance in full every month.

  35. joecoolest says:

    Has anyone else noticed a trend of credit card due dates falling on Sunday’s. I have and use a lot of credit cards in my business and personal life, but luckily rarely have to pay any finance charges. In the last year i have noticed a trend of many of the due dates for various cards regularly falling on Sunday when no payment can be made. Seemingly decreasing the grace period.

  36. ruralflunky says:

    I just recently received notice from Chase that they were going to raise my interest rate from, 7.99% fixed to 20.24% variable. When I called them they said that it was because I had been using a lot of credit, not on their card, but others, and my balances went up quickly. Of course it did, because I had done some remodeling. I had just paid down their card to 0, and 3 others to 0, but it had not shown up on my credit reports yet. The credit specialist asked me about my income, and checked to verify that I had paid down my chase card, and then told me they would leave it at 7.99% for now, but the balances on my other cards had better come down or they would raise it anyway. (basically taking my word that I had paid down the other cards, but if they check next month, and I lied, they would raise it.) Asked how I paid down all those cards, and she was down right mean to me. It was very irritating to say the least, because I have never been late on any of my bills, and they actually take an automatic payment every month, plus I usually go back and pay more later. I felt violated. I will not be using the chase card, but I will not close it, because it will hurt your credit, and make it look like you utilize more credit, which is why they wanted to raise my rate. GE MONEY BANK, will reduce your availabe credit, if they think you are using too much credit, so I don’t shop at Sams Club any more either. I would charge on that card, and then pay it off immediately, because of the high interest rate, and had a pattern of doing this, so I was insulted by that, and closed the account. It hurt my credit to reduce my credit limit from $5,000.00 to $300.00, but it hurt my credit even more by closing the account.

  37. LL22 says:

    I sure wish I had read this site BEFORE applying for my Chase Disney
    Rewards card. Yes, I was lured in by the zero fixed rate offer! I
    called to try to cancel my application, but it was too late. I did,
    however, explain in detail why I wished to cancel it. The customer
    service rep insisted that they do not raise fixed interest rates unless
    you default on a payment, but I reminded her of the fine print that
    says Chase can raise rates at any time for any reason and cited the ABC
    investigation. I referred to it as “Bait and Switch” which is exactly
    what this is. I do not know whether Chase would do this to my account,
    but it is possible. This may end up costing me money, beause I had
    requested a balance transfer. For some reason, I thought Chase did not
    practice “Bait and Switch.” I am usually much more careful than this
    when applying for credit. Anyway, she was polite and the call was
    recorded.

  38. Anonymous says:

    Was thinking about opening up an account with Chase to transfer balances…. But now since I read all these messages…. NOT HAPPENING….Nightmare seems to be with Chase.
    I knew Capital One was/is bad for that… Good to know that there’s peeps out there looking out for one another….Thaaaanks