Chase Raises Reader’s APR To 148.14%

Chase credit card raised Lee’s effective APR to 148.14%

Lee was charged a late fee on a Chase card payment, even though he mailed the check ten days before it was due.

When he called to complain, Chase refused to remove the fee and told Lee they, “had no control of the U.S. Postal Service.”

Shortly thereafter, his APR magically rose to over 148%. Read his letter inside.

Lee writes:

    “I was charged a late fee on my Chase credit card. I checked my checkbook and I made the check out and mailed it ten days before the due date.

    I called them on the phone and they were very rude, and said they had no control over the U.S. Postal Service. They kept the late fee on there, then charged me $ 1.00 interest on the late fee, and raised the interest rate to 148%. That is not a typo. I said 148 %.

    I canceled the credit card, then I found out it had an effect on my credit rating, which was lowered. I mailed their main office a letter requesting they fix my credit rating. Waited a couple of months, no response. So I mailed them three more letters, and waited for their response. No responses to any of them.

    I had that credit card ten years, no late fees. I would like to ask your advice on how to handle this, since they refuse to reply to my letters. Any help or advice would be appreciated. I do believe I have (had) the highest interest rate on that credit card of any one in the world. Thank you.”

Lee, have you disputed the report ding through the credit bureaus? That would seem the first place to start. — BEN POPKEN


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  1. Karl says:

    I’m fairly certain that they didn’t raise the interest rate to 148%. The fine print in many credit card agreements is that there’s a minimum finance charge if one applies. In this case, it’s $1. As the bill says, the “effective APR” includes other charges, such as balance transfer fees, minimum finance charges, etc. I suspect they’re required to disclose this to you as the true cost of credit.

  2. TedOnion says:

    The damage to your credit may also be due in part to canceling a credit card you had for 10 years. Yes! If you have a line of credit for a long time, and you close it, that damages your credit.

  3. ElPresidente408 says:

    As someone commented, your interest rate is not 148%. This is what happened:

    On a 28 day cycle, your interest rate was 1.246% per cycle or 0.0445% per day. With an average daily balance of $8.10, you should have been charged $0.10 in interest. However, Chase rounded that figure up to $1.00 which in effect gave you a 12.346% interest rate per cycle, making your effective APR 148.14%.

    I suspect Chase may have some fine print saying if the interest amount is under $1 they round up, or this could have just been an error. Either way your actual interest rate is not that high, but you should still get this sorted out for your record. Being that it is such a small amount Chase should make good on the situation.

  4. bones says:

    You should contact the major credit agencies and dispute the entry from Chase. If they fail to respond to the credit agency in x number of days the entry can be removed.

  5. Chairman-Meow says:

    I had this problem once before with, ironically Chase Bank!. I fought the issue up the CSR chain and had to threaten summoning the state AG befor e they would remove the late fee. The trick here is to ask the post office to postmark your mail before it goes in the system.

    As long as you mail the check within the time period, they cannot charge you a “late fee”. The late fee is determined by the post mark date on the mail! This is done because most Credit Card companies use a 3rd party to process their mail and billing. If the processing company is a little slow in processing, your bill can run in the late zone.

    There was a huge issue with this a few years back. It seems that some CC companies were making huge profits on the late fees because they used crappy 3rd party processing. It eneded up in court and the courts made the ruling on when the bill is considered overdue.

    You should have really fought this one out. I’m sure your state’s AG would have helped you out.

  6. slinky22 says:

    “The trick here is to ask the post office to postmark your mail before it goes in the system.” That’s a great idea, but how are you going to provide this evidence to Chase, when the envelope is in their hands? (or, more likely, in their landfill). I think the only way to truly prove date of mailing is by sending it certified mail. Besides being extremely inconvenient, that can get pretty costly.

  7. Falconfire says:

    Digital Photo of the postmark should hold up in court I would think.

  8. tjrchicago says:

    Alternately to a digital photo, see if your employer has a postage machine. The postmark is printed along with the postage. And trust me when I tell you that metered mail will NOT be accepted with a different date (someone forgot to set the date correctly one time and we had an entire bin of mail returned…minus the few letters that actually had stamps on them).

  9. acambras says:

    I wouldn’t advise using your employer’s meter for personal mail, bills, etc.

    What about online billpay? My bank (Wachovia) lets me set the date for the payment. After I’ve paid bills, I can print out a page with payees, dates, amounts, and confirmation numbers. Knock on wood — I haven’t had any problems.

    There have been a couple of times in my life where I’ve FedExed a payment to a credit card company — $12-15 for FedEx is a lot cheaper than the $30-40 late fee, plus the way credit card companies hit you with a higher interest rate after a late payment.

    Some companies allow you to make your payment online, but there’s often a hefty fee charged (+/- $15) for doing so — I think that’s outrageous. I’d rather FedEx my payment (if it comes to that) than give the credit card companies any more of my money.

  10. Pelagius says:

    Any chance you can check to see when they cashed your check? BofA, for all its faults, lets you pull up an image of the cancelled check via their online service.

  11. dwarf74 says:

    Front_Towards_Enemy – This isn’t federal law, it’s state law. The postmark date, in most states, doesn’t matter at all for whether or not your payment is considered late. This isn’t a federal issue; it’s a state one.

    The only state I know of where the postmark date mattered was Arizona, but I believe that law may have changed since then.

    As a former Billing specialist for an insurance company, I can say for certain that most state laws indicate your payment needs to arrive by the due date, not be postmarked by the due date. Most companies don’t keep envelopes on file for this reason, so I’d guess your postmarked envelope is gone.

    While it’s true the company has no control over the post office, it’s pretty dickish not to at least give you the benefit of the doubt.

  12. “I called them on the phone and they were very rude, and said they had no control over the U.S. Postal Service. They kept the late fee on there, then charged me $ 1.00 interest on the late fee, and raised the interest rate to 148%. That is not a typo. I said 148 %.”

    I’ve been with First National Bank of Omaha for 10 years now for my credit card. It’s not a rewards card, but every time I’ve had a problem with a late payment — including “I went to visit my parents for two weeks and totally spaced on the fact that my credit card came due then” — they have waived all late fees and finance charges and accepted my payment in full. I never carry a balance, so they’re not exactly making money on me either. They’re just really customer-oriented when I call customer service and really understanding about things like the fact that my postperson hates mail and doesn’t really want to be bothered to deliver it ever, or I was in the middle of finals and didn’t pick up my mail for a week and a half, or whatever.

    So there’s my little “I love FNBO” plug. :)

  13. acambras says:

    Everyone I’ve ever met from Omaha has been nice. I guess that’s my Omaha is Nice plug. ;-)

  14. thrillhouse says:

    dwarf is exactly right. Its got nothing to do with the post mark – as tho you could get a picture of it each and every time. I’m sure if you’d read your terms and condidtions, you’ll see that all that matters is when they receive the check. Credit card companies are also notorious for siting on checks and not posting the when they get them. The only way you’ll have any proof what-so-ever is to send it certified mail, return receipt. Otherwise you’ve got nothing.

    credit cards are so darn convenient….

  15. Mr. Gunn says:

    Disputing the negative with the credit bureaus might not do much, even if they reported a late because the major ding you probably took was closing such an old line, decreasing your average age of accounts. Also open another card account with a limit equal or higher than the one you had, to limit the negative effects of increasing your % utilization.

  16. Sudonum says:

    There is a cheaper alternative to certified mail if all you want is something that says you mailed an envelope to a certain firm or individual on a certain day. Its called Proof of Mailing. It costs less than a buck and I have used it a few times when I didn’t think I needed to actually track the package but did want proof that it was actually sent.

  17. sassenach says:

    Sheesh…why would anyone mail a check? Pay online, my friends.

  18. wishlish says:

    Having worked for credit card companies in the past (including Chase), they usually do not hold onto the envelope, and they do not look at the postmark on the envelope when it comes to dating your payment. It’s a shame, but it’s true.

    Given that, Chase’s refusal to wave the late fee is laughable. I’d call and demand to speak with a supervisor.

  19. emax4 says:

    I don’t have a solution, but I’m thinking it should have been 14.8%. Chase must now be using VMS (Verizon Math System)

  20. humphrmi says:

    Hey dude, just above your “effective” APR is your actual APR, stated very clearly as 16.24% and 23.24% respectively. Your effective rate is the amount including fees, but not including credits. Your statement shows you got a credit. I don’t see the problem.

  21. kahnvex says:

    The E-APR is a huge pain in the ass to all Customer Service associates at any unsecured lender. That is not the actual APR, that is the effective annual which is required by Chase to be disclosed to you as the percentage daily amount of interest calculated as the finance charge related to the actual balance.

    The third post which explains in exacting detail the math involved should have put this thread to rest. There is nothing illegal going on, and any Service person should be able to explain that, as we get about 300 of those calls per each of us per month.

    It is an absolute waste of your time to pursue that, as it is basically a worthless number, I’ve personally seen it represented as an even higher number.

    I understand the “sticker shock” that occurs when one sees the bold black number represented as an astronomical amount.

  22. olegna says:

    The weird APR is based on the low balance being higher than the late fee, and would spike back down in the following pay cycle.

    The weird thing is their refusal to credit you your late fee back. I’ve never heard of a CC Co. doing this unless you’ve before and recently. If what the reader says is true, then it must have been a bad-apple CSR. I would bee very surprised if they refuse to remove the late fee in this case. (Even Paul Krugman once mentioned this in his column once — and siad all it took was a phone call to have the late fee removed.)

    With that said: I hate when they say stuff like “we have no contoral over the postal service”. If the US Congress really gave a rat’s turd about CC users they would pass a law TOMORROW that said the date stamped by the Post Office is the date the CC company has to use when calculating whether a payment is late.

    Of course, lawmakers don’t give a rat’s turd about CC user rights because they receive legal bribes from the financial services industry to fund their election-time smear campaigns, not you.

  23. econobiker says:

    Like Sudonum said “proof of mailing” is useful for some situations.

    Issue that I have is that most CC companies specifically state that payment must be received by a specific time and date or it will be considered late. This applies also to telephone transfers which somehow take two days to post to your account while they get the money immediately… hmmm.

  24. brusel says:

    Previously to open an account with Chase Bank I read several negative reviews about this bank, I was expecting something to go wrong, finally my case starts now, suddenly I couldn’t access my account online, I call the bank and the y told me it needed some information update, a representative also asked me if I could recognize 2 transactions, I said no I never use that credit card for purchases I always have accurate control over credit cards, she told me it was used 2 times recently and I have to dispute this charges and the account was closed for security reasons, now I expect the worse, based on the negative reviews.

    I invite every single Chase bank credit holder that had a bad transaction or case you can prove they are wrong, send me an e-mail to let’s fight together.

    I think someone up there is doing something bad, not every Chase employee is guilty.
    My case is just starting with Chase I am ready and expect the worse, after reading bad reviews in several websites about Chase bank.
    I will keep informed about my case.