Payment Card News

Jerking Rates

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The nation’s second largest issuer of general purpose credit cards says it plans to pull the plug next year on its practice of jacking up interest rates on cardholders whose credit score declines. Chase announced it is expanding its “Clear & Simple” pricing program with the elimination of the practice. However, the change will not be effective until March 1st and it is not retroactive. The practice of increasing rates based on credit-bureau information is largely confined to the nation’s top ten issuers. In January Chase announced it will
switch to the average daily balance method of calculating finance charges on all of its cards, eliminating the two-cycle method of calculating interest. In March, Chase announced the “Clear & Simple” initiative which included consumer management tools; financial literacy and education; and clearer disclosure of terms and conditions. The tools include automatic payments, free alerts, paperless statements, and payment calculators.

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