A number of visitors have been justifiably angry at Chase for raising their monthly minimum payment requirements on fixed for life balances from 2% of the balance owed to 5% of the balance owed.  For many, the new payment required is mortgage sized and, in some cases, more than $1,000 a month.

Most of the consumers who have left comments on the matter have had no luck dealing with customer service.  However, the post below is from a visitor who was able to negotiate a lower monthly payment, although he was forced to accept a substantial interest rate increase.  Here is his story:

“Like many others, a week ago I got the rude surprise that Chase was raising the payment on my two cards from 2% to 5% of the balance. I had earlier transferred high interest cards to these life-of-the-loan 4.99% offers. I always paid on time–in fact, electronically a week prior to the due date to be sure I retained the excellent rate. I also paid above the minimums. With the new requirements, however, my total payments would now go from roughly $500 per month to $1250! An arbitrary increase of $750 per month was simply not an option for me.

I called and requested to opt out, close the cards, and keep the existing terms. I was told this was not possible but that I was welcome to pay off the cards in full or accept the new payment terms. Since I pointed out I didn’t have the nearly $25,000 required to do so and would have to fall into default on the cards if the new monthly terms took effect, I got transferred to another person.

This second customer service rep suggested I transfer the balances to a low interest card with another bank. I informed her that this was simply not an option for me, as I didn’t have the credit available. When I once again mentioned the inevitability of defaulting if the new payment terms took effect, she transferred me to yet another person, who took down details of my monthly income and expenses.

I was then offered to have the accounts closed and have a 5-year payout on the balance at 15.99% interest–more than triple the current rate. I was so shell-shocked that I met this with stunned silence, after which she offered me a 5-year 12% deal. Supposedly it’s fixed and can never change. Then again, it seems I’ve heard that before. But I wound up taking them up on this rate the next day, though I was required to make an immediate payment on each card to initiate the new payment schedule, despite the fact that I’d just had my normal payments on both cards credited to my accounts two days earlier.

Needless to say, I will never, ever do business with Chase again. I intend to pay off both cards in under 4 years–sooner if possible, as I will pay above the monthly required payments like I usually do. But once that happens, I will never give them another penny. I love the fact that they say people like me are not paying down quick enough, but they are more than happy to raise the rate and thereby prolong the debt payoff. Chase’s actions–especially after receiving the bailout money–are simply deplorable.”

Unfortunately, this is the first news of someone getting a deal that’s been posted on Smart Credit Choices.  Hopefully, others will have better luck.

I haven’t really had the motivation to post recentlly, despite all the credit card news, as it seems hopeless to blog about important news on credit cards when I know no one will find my writing in the search engines.  I contacted a very well respected search engine link expert named Eric Ward and hope to have the cash to hire him soon.

However, as the credit crunch continues to drag on, its becoming more difficult to buy my way out of this Google penalty.

I sent in my monthly reconsideration request a few days ago and have literally done everything I can to remove the problem links a blackhat SEO company used to get my site rankings.  I even posted on the sites that they are spammers and causing people to get penalized.  Guess what?  None of them took down the links, as I don’t think honest or competent people are running these sites.

Nevertheless, I did my duty as a good web citizen and reported the sites that led to my penalty - even though my links are still there.  This will probably do more harm than good, but I figured it was the right thing to do.

Hopefully, I’ll be back to blogging soon.   Until then, if you happen to stumble on this page and know how to help, please shoot me an email.

If Google actually indexed my blog posts, people would have been aware that credit card rewards programs have been on the decline for quite some time.  Unfortunately, Google hates this website, and you may have only recently learned of the fact that credit card companies are cutting rewards programs through the mainstream media. 

A recent article on CNBC.com (http://www.cnbc.com//id/29637583) discusses some superficial trends in the credit card rewards landscape.  However, the article misses the big picture, which is best understood in the context of the past three years. 

A great place to start is cashback credit cards.  In 2006, Citi offered a card which provided a full, unconditional 5% cashback on all gas, grocery, and drugstore purchases.  This offer was quickly discovered by saavy consumers who not only just used their cards where they could get 5% cashback, but also paid their bills in full every month.  These consumers made handsome profits by simply using their credit card in place of cash.

It didn’t take the banks very long to isolate money losing rewards programs.  Consequently, full 5% cash back offers were quickly replaced with 3%, 2%, and ultimately, the 1% cash back rewards card.  Today, earning 1% cashback is about as good as it gets, although a few cards still offer double rewards.

Blue Cash from American Express, for example, still offers a full 5% cashback on gas and grocery store purchases.  However, there is a rather large caveat:  you must spend $8,500 in order to earn 5% cashback.  Until you hit that threshold, gas and groceries earn 1.5% and all other purchases earn 0.5%.  Despite this spending threshold, consumers who do all of their spending with this card and pay their bills in full can still make out pretty well with this deal.  However, I wouldn’t be surprised if American Express pulled this deal from the market tomorrow, as credit card companies are about as predictable as the weather these days.  (You can learn more about cash back offers in the cash back credit card section of Smart Credit Choices.)

While cash back credit cards have seen the most dramatic cuts over the past few years, airline rewards cards have remained relatively stable.  One reason for this lay in the fact that most airline credit cards associated with a single airline charge hefty annual fees of $75 or more.  Another reason these cards haven’t cut promotions as much lay in the fact that it takes quite a bit of time to earn enough miles to get a flight.  With most cards, you’ll have to spend $50,000 to earn enough points for a single flight. 

Consumers who want to earn airline miles without paying an annual fee still have options.  More than a few credit cards offer no fee airline rewards.  For additional information, see the airline credit card section of Smart Credit Choices.

Overall, it is quite true that credit card rewards programs are on the decline.  However, this is not a new phenomenon.  It has been going on for a few years.  What is alarming is the recent rate of change, which indicates that credit card rewards programs will get stingier before things improve.

Since August of 2008, Smart Credit Choices has been suffering under a Google search penalty.  Because of that, many of our articles and blog entries which are written to help consumers in these difficult times, are all but impossible to find when searching on Google.

We’ve tried to contact Google to get them to stop hating us, but with no luck for nearly 9 months.  We don’t know how much longer Google will continue to hate us, but if you can help us out by sharing our site with friends our linking to us from your blogs, we’d appreciate the help.

Credit card companies have been tightening lending standards dramatically over the past year, with a recent Fed study reporting that more than 60% of senior loan officers increased credit requirements.  This does not bode well for consumers, especially those trapped by high interest rates or in need of short term funds.

TALF, the Term Asset-Backed Securities Loan Facility, was supposed to begin in early February and facilitate the packaging of credit card loans into securities.  This would, in theory, free up capital for credit card companies to issue new credit card loans.  Unfortunately, the TALF has yet to begin operations, and consumers are still facing difficulties obtaining credit card, car, and student loans.

Tomorrow should bring news about the TALF program, and hopefully the news is good.  Otherwise, consumers will face even more obstacles in the quest to obtain credit.

Sources:  http://www.reuters.com/article/bondsNews/idUSN0927208920090209