Hundreds of thousands of JPMorgan Chase customers with low, fixed-rate credit cards are being charged a new $10 monthly fee and are seeing their minimum payments more than double from 2 percent to 5 percent of their existing card debt, reports USA Today (“Chase Adds Fee for Low-Rate Credit Cards,” Feb. 9, 2009). 

The new policy affects 400,000 Chase credit card customers who’ve carried large balances for more than two years on their cards that have low, promotional rates and who’ve made little progress paying that debt off, said Chase spokeswoman Stephanie Jacobson.  

As part of the new policy, Chase cardholders affected by the changes are given the choice between accepting a higher interest rate of 7.99 percent on their promotional balance or making a higher minimum payment on top of the new monthly fee – which is being added to cardholders’ monthly balances where the fee can accrue interest. 

Consumers should be given the choice of opting out of any new card policy and the opportunity to pay off the existing balance at the original introductory interest rate, says Linda Sherry, director of national priorities at Consumer Action, a consumer education and advocacy organization.  

In the original agreements for these specific Chase credit cards, the bank promised customers that their low, fixed interest rate would remain intact as long as the customers made their required payments on time to Chase and to their other creditors, according to a class-action lawsuit filed against Chase by the New York law firm Giskan Solotaroff Anderson & Stewart. 

The lawsuit alleges that Chase’s new monthly service charge and interest rate changes are in violation of both federal and state law. 

Jacobson said the new policy only affects less than one-half of 1 percent of its credit card accounts and that Chase is a “responsible, careful” lender that makes adjustments to credit card terms as it deems necessary based on borrower risk, market conditions, and funding costs.

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