February 9, 2009

Credit card policy change provokes suit

A New York Law firm said it filed a class-action lawsuit against J.P. Morgan & Chase for monthly service fees attached to some low-interest credit cards.

Affected customers calling Chase said they were offered a $10 monthly fee and a higher minimum payment schedule -- jumping minimum payments from 2 percent to 5 percent of their balances -- or a higher interest rate, USA Today reported Monday.

Chase spokeswoman Stephanie Jacobson said the new policy affected credit card holders with promotional rates who have kept large balances for more than two years, making little progress reducing their balances.

The change, affected about 400,000 accounts, she said.

Moves like this are not only bad for me as a customer, but bad for the economy, said Peter Norman, an economics professor at the University of North Carolina-Chapel Hill.

Linda Sherry, a director at Consumer Action said customers should be offered a choice the option of paying old balances with the original policy.

The firm, Giskan Solotaroff Anderson & Stewart, said it filed suit for customers who have been charged a monthly service fee on balance transfers to their Chase credit cards that have low fixed APRs for the life of the loan.