Chase to End Practice of Hiking Credit Card Rates Based on Credit Score Changes
Chase Card Services announced today it will end its practice of potentially raising credit card interest rates based on financial data not connected to the cards themselves. Up until now, Chase (like many credit card companies) has given itself the option to raise a customer’s credit card rates based on downward changes to the customer’s credit score—even if the change in credit score was not directly related to the Chase account. In other words, non-payment or late payment of unrelated bills could trigger an interest rate hike on the Chase credit card; starting in March of 2008 this will no longer be the case.
The change is part of Chase’s “Clear & Simple” campaign to make its rates and fees more transparent to consumers. As part of Clear & Simple, Chase had already introduced personalized alerts to help customers remember when card payments are due, as well as giving customers the option to choose their credit card’s due date, and other features. Chase also dropped a practice called two-cycle billing, which had previously caused interest to be calculated based on the average credit card balance spread over two monthly billing cycles instead of one.
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