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Thursday, October 7, 2010

Chase Bank "Balance Liquidation Program" might help you actually pay down your credit card debt.

About a year ago I was told by a reader to ask for the 5 year Chase Bank "Pro-Active" program as one way to combat Chase Banks change in terms on their low interest rate credit card offers.

Chase Bank basically STOLE anywhere 10 million to 100 million dollars in monthly interest rate savings from its customers. Chase Bank increased the monthly minimum payment on customers low interest rate, life of the loan credit card agreements by 150% above and beyond what their customers were already paying!
If a customer was making a 400 dollar a month payment to Chase Bank, that payment would suddenly jump to 1,000 dollars a month! If the customer could not make the higher payment, they would default on the low interest rate credit card agreement (example, 2.9%), and the interest rate could increase to as high as 29%! In my opinion this was a criminal act by Chase Bank that to this day has not been rectified. (Important update -June 30, 2013), Kamala Harris has filed a state wide class action lawsuit regarding a huge influx of Chase Bank garnishments immediately after they forced tens of thousands of these customers into default! -end this update)

There may literally be tens of thousands of Chase Bank customers who took a huge financial hit because of Chase Bank first changing terms, then not allowing their customers to opt out of the change in terms.

Chase Bank went as far as to lobby the new credit card reform act of 2009 so that they WOULD NOT have to notify their customers whose terms had been changed that there was a way out of the mess.
Indeed, when I called the number the reader gave me, the five year paydown program was called the Pro Active program.
However, when I got the Chase Bank welcome letter, I was so upset with Chase Bank (Because the accelerated paydown of this low interest rate credit card would cost me hundreds of dollars extra as I applied extra money to this low interest rate card that could have gone to pay down a higher interest rate credit card faster), that I just sort of glanced at their "welcome letter".
Today, I ran across the chase bank welcome letter again and noticed that I was being welcomed to the Chase Bank "Balance Liquidation Program". So even though I was told, and Chase Bank answered to the name Pro-Active, the other name that apparently describes the 5 year pay down program is called the "Balance Liquidation Program".

(edit note - Nov. 15, 2012 - 3:20PM, reading this now, the above sounds confusing. My point was that when I originally tried to get help for the Chase Bank 2% to 5% increase in the monthly minimum payment, customer service did not offer either the Pro-Active or the Balance Liquidation program UNTIL I mentioned either one by name. If it is true that customer service was kept in the dark about these programs, this just magnifies the financial damage that Chase Bank did to customers who were looking for a compromise solution.)

I recall banks sending me similar types of 5 year pay down programs, but the interest rate always seemed to be anywhere from 10.99% to 19.99%, or higher. I think two differences with this Chase Bank Balance Liquidation Program is that the regular customer service department may know who to send you to, whereas with the Pro-Active program they may not, the second difference is you may actually qualify for anywhere from zero percent interest to some other single digit interest rate not exceeding 9.99%.

The idea being that whatever interest rate you are presently paying, if you agree to close your account while continuing to pay off your closed account, you will get a low interest rate as an incentive.

So if you feel you can pay off a credit card debt that currently is at a high interest rate if the interest rate were lower, you may want to consider calling and asking about the balance liquidation program. I think other banks besides Chase Bank may offer this program as well.

Your credit score may take a small hit because of the closing of the account, but I think that is only for perhaps six months, then if you show that you are making timely payments, it should start to help restore your credit score, and you get the added bonus of paying less out in interest rate charges.


Don't forget, the Cat Who Ate Chase Bank, the book, coming out in sometime in 2010.

7 comments:

  1. I appreciate this post, I am in a similar situation and just got off the phone with someone from this program. My acct. is already closed but if I am accepted into this program my interest will be lowered over 50% from where it is now. I just felt like I was paying only interest off and getting nowhere, which is what prompted my call. I will update again soon...

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  2. Wow, that is awesome, especially because your account is already closed. Nice to see Chase Bank actually willing to discuss a Balance Liquidation Option with you and I look forward to hearing how they treat you as will anyone else who reads this article in the future.

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  3. Chase came out ahead of Bank of America and AT&T when I requested of all 3 companies to lower my interest rates due to employment reduction. The Chase Balance Liquidation Program only slightly lowered my monthly payments, but it is light at the end of the tunnel, and 2% interest rate. It's nice to see the balance really going down. BofA on the other hand did nothing to help, and cancelled the outstanding credit line, thus slamming my credit score. (Same with AT&T). So Chase came out smelling like a rose, although I do know of someone that got caught with an obscene interest rate hike from Chase for no reason, right before the laws changed...

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  4. Cassie, thank you for that. I don't know if you were anonymous up above but overall this sounds like good news.

    I think what banksters care about most is not reducing the monthly payment even if they reduce the length of time you pay by lowering the interest rate. This still puts a squeeze on the consumer but it does provide a light at the end of the tunnel.

    I am also sorry to hear about the immature reactions by Bank of America and AT & T.

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  5. Why does it feel like the comments on here are fake postings by people actually pimping for Chase!

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  6. Alan, if you take a moment and read more of this blog, and my other Chase Bank protest blogs, you would probably come to an opposite conclusion.

    Just because I bash Chase for things that I think they have done wrong does not mean I won't offer solutions that are available to people who are trying to pay down their debt.

    The one problem I have with the bank liquidation program is that the account is frozen. It is much easier to pay down a debt if a portion of the paid down debt could be respent every month.

    So if the bank liquidation program required a 2.5% of the total due paid every month, a portion of that, say 33% of what has been paid down for that month, should be made available to respend.

    Until this one change is made, these programs may eventually drain a person's financial resources before they have paid off the debt. But, this program is definitely better than offering nothing.

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  7. I got six percent a couple years ago on two cards with the BLP. Later I made payments larger than they wanted and then learned to pay harder on the smaller one since when its gone its gone.
    With only the big balance account left, you will have option to pay same combined payments to one card or use the cash extra one tough month if you pay only one dollar above the minimum payment temporarily. All these tactics will pay your balance faster than their sixty month idea.

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