Consumer complaint received 2023-01-31
Company: JPMORGAN CHASE & CO.
State: DE
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Advertising and marketing, including promotional offers
Sub-issue: Confusing or misleading advertising about the credit card

Complaint:
Chase bank is advertising to their existing customers, balance transfers up to $ x amount, @ 0 % APR for 24 months. In exchange, the customer pays a 5 % balance transfer fee. 

However, in small print, they say " Prior to taking advantage of this offer, if you did not have a balance or you paid your balance in full each month, you did not pay interest on your new purchases. This is referred to as an interest-free period. If you take this offer and do not pay off your entire balance each month ( including the promotional balances that you add by using this offer ), you will lose that interest free period. This means that you will begin paying interest on all new purchases, even if you pay your purchase balance in full each month. '' HOWEVER, they also say, and have on their FAQs regarding this particular offer, " Here 's how we credit your payment to your account- The minimum payment will be applied in the following order, interest charges, fees, and principal from the most recent statement from the lowest to the highest APR balances. Any amount over the minimum due will then be applied from the highest to lowest APR balances. 

These 2 statements are completely contradictory. The first statement they say you have to pay the entire balance, including the amount of balance transfer, in full, in order to avoid getting charged interest on your current charges. The second statement they say, they will apply minimum pay to interest, fees, principal from most recent statement from lowest to highest APR balances. This means the minimum payment would go to interest/fees first, then to the balance transfer, then anything OVER the balance transfer SHOULD go to the balance with the highest APR ( current charges ) since the balance transfer is at 0 % APR. I called and spoke to several people, and they all said the same thing, there was nothing they could do, the entire payment will go to balance transfer, and you will get charged interest on any current charges. I can't say that they are blatantly lying, because they had that " small print ''. But what I can say is that they have 2 completely contradictory statements regarding their methodology of payment allocation, and even if somehow their methodology that violates section 1026.53 of the credit CARD act of 2009 isn't illegal, it is at bare minimum confusing to the customer.

The smaller print statement, I believe is illegal, as it violates section 1026.53 of the credit CARD act of 2009 allocation of payments. The part that contradicts the small print is how payments should be allocated based on section 1026.53. 

So to summarize : I believe Chase at best misleading their customers, into believing they will have 24 months @ 0 % APR of their balance transfer, as they are not making it clear that unless they pay off the entirety of their balance transfer + any current charges, they will be subject to interest on all of the current charges. Again, at best, Chase is intentionally confusing their customers by stating 2 different methodologies of payment allocations depending on where you look. Lastly, I believe because they are enforcing their allocation methodology of what was in the small print, that they are in violation of the allocation of payments set forth in the Credit Card act of 2009. 

In addition to these thoughts, I can't help but feel that this product is predatory, as it appears to be offering relief to consumers who may have credit card debt, thinking they will have the opportunity to pay down debt without accruing interest, but in reality it is just shifting the bucket in which their interest will be charged.

Company response to consumer: Closed with explanation