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Location: Sitting inside a TV truck, Somewhere, more then likely in the Southeastern region, United States

I am a grouchy, bald headed old fart filled with opinions and not the least bit shy about sharing them.

Wednesday, July 11, 2007

If this isn't a scam, why is it legal?

Morrisville, NC - A good friend of mine went through her credit card statements only to discovered that the interest on her Amazon sponsored credit card through Chase Bank had been jacked up to 22.24% annually. Puzzled, as she had in introductory rate of 5.9% that was still well within the allotted period she called to have the mistake corrected.

The telephone clerk explained that Chase had determined she was carrying "too much debt" so (apparently in order to insure it stays that way) they jacked her interest rate up by over 300%. The clerk claims she was sent a notice telling her that was coming, but my friend can't find it in any of the mail she received from them. If you knew this Lady you would know how she saves every little piece of paper, no matter how obscure, so I believe her.

I have several problems with this latest dump on the basic consumer. The first and foremost of which appears to be a mystery. No one seems to be able to define what yard stick Chase is using to decide who is carrying too much debt. My friend always makes more then the minimum payment and has a sterling on time pay record. Does someone get up in the morning and randomly draw names over their morning coffee?

Another problem is an arbitrary 14% plus jack in rates with little or no notice. What if the consumer wants time to move the debt to an account with a reasonable interest rate? What if Chase's debt load determination is in error? According to my friend, the Chase's clerk stated their findings are not up for debate.

Last, but clearly of major concern is this: Why would a credit card company set a consumer up to fail like that? Is the goal to keep that consumer in debt for the rest of his/her life? The new interest rate at the payments she has been making will keep her chained to this debt well into the middle of the next decade.

So if you are considering one of those generous interest rate credit card offers from, take a really good look at the fine print and consider this horror story.

Note: Chase absolutely refused to discuss the "too much debt interest rate" with me. The person with no name at the home office said they did not have time for bloggers and hung up on me.

- 30 -

You want 21 percent risk free? Pay off your credit cards.
- Andrew Tobias

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