Consumer complaint received 2021-02-01
Company: JPMORGAN CHASE & CO.
State: CA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Unexpected increase in interest rate

Complaint:
I recently received notice about increased rates on a credit card. 

CHASE Penalty APR and When It Applies Up to 29.99 %. This APR will vary with the market based on the Prime Rate.c We may apply the Penalty APR to your account if you : fail to make a Minimum Payment by the date and time that it is due ; or make a payment to us that is returned unpaid. 

How Long Will the Penalty APR Apply? : If we apply the Penalty APR for either of these reasons, the Penalty APR could potentially remain in effect indefinitely. 
My Chase PlanSM Fee ( fixed finance charge ) Monthly fee of 1.72 % of the amount of each eligible purchase transaction or amount selected to create a My Chase Plan. The My Chase Plan Fee will be determined at the time each My Chase Plan is created and will remain the same until the My Chase Plan is paid in full. 
Late Payment Fee Up to {$40.00} Return Payment Fee Up to {$40.00} c Penalty APR : We add up to 26.99 % to the Prime Rate to determine the Penalty APR. Maximum APR 29.99 %. Variable APRs are based on the highest U.S. prime rate published in the Money Rates section of The Wall Street Journal two business days ( not weekends or federal holidays ) before your statement closing date. The U.S. prime rate is currently 3.25 % as of XX/XX/2021. The daily periodic rate is 0.08217 %. 
Additional Information About These Changes My Chase Plan Fee : The My Chase Plan Fee is calculated at the time each plan is created and is based on the amount of each purchase transaction or amount selected to create the plan, the number of billing periods you choose to pay the balance in full, and other factors. The monthly and aggregate dollar amount of your My Chase Plan Fee will be disclosed during the activation of each My Chase Plan. 

Penalty Fees ( Late Payment Fee and Return Payment Fee ) : A single violation of each type will not exceed {$29.00}. However, if another violation of the same type occurs within six monthly billing periods, we will charge up to the maximum fee in the table above. The Late Payment and Return Payment fees will not exceed the related minimum payment that was due. 

2. The description of Minimum Payment found under your Cardmember Agreement Rates and Fees Table is changed to read as follows : Minimum Payment : We will calculate the minimum payment as : Any past-due amounts ; PLUS Any special payment obligations in connection with Flexible Financing Offers which require repayment of the balance over a pre-selected number of billing periods ; PLUS The larger of : {$40.00} ( or total amount you owe if less than {$40.00} ) or The sum of : 1 % of the new balance ( excluding any Flexible Financing Offer balances which require special payment obligations to ensure repayment of the balance over a pre-selected number of billing periods ), PLUS any periodic interest charges and late fees we have billed you on the statement for which your minimum payment is calculated. 

3. Getting Started : Your Account " What It Means to You '' for the Amendments section within the Getting Started : Your Account section of your Cardmember Agreement is amended to include a reference to Penalty APR, as follows : We may change the terms of this agreement including APRs and fees from time to time. We may also add new terms or delete terms. APRs or other terms may also change without amendment, for example when the Prime Rate changes or the Penalty APR becomes applicable. See the Variable APR and Penalty APR sections for details.

" Our Responsibility '' for the Amendments section within the Getting Started : Your Account section of your Cardmember Agreement is amended to include a reference to delivery of amendments, as follows : Our ability to make changes to this agreement is limited by applicable law. We may communicate amendments to this agreement to you via mail, email or other electronic means, or included in your monthly billing statements as permitted by law. 

4. Important Definitions The " Cash-like Transactions '' section within the Important Definitions section of your Cardmember Agreement is replaced to clarify and expand the definition as follows : TERM WHAT IT MEANS Cash-like Transactions Cash-like transactions will be treated as cash advances. Cash-like transactions include, but are not limited to, the following transactions to the extent they are accepted : purchasing travelers checks, foreign currency, money orders, wire transfers, cryptocurrency, other similar digital or virtual currency and other similar transactions ; purchasing lottery tickets, casino gaming chips, race track wagers, and similar offline and online betting transactions ; person-to-person money transfers and account-funding transactions that transfer currency ; and making a payment using a third party service including bill payment transactions not made directly with the merchant or their service provider. 
5. Using Your Card The introduction to the Using Your Card section of your Cardmember Agreement is amended as follows : You can use your account in the following ways. Your account is to be used only for personal, family or household purposes. You can not use your account for illegal purposes, such as writing checks against uncollected funds. You agree that we may rely on information provided to us by merchants and the applicable payment network to categorize transactions as Purchases, Balance Transfers or Cash Advances. 

The " My Chase Plan '' section within the Using Your Card section of your Cardmember Agreement is updated as follows : TRANSACTION WHAT IT MEANS TO YOU OUR RESPONSIBILITY My Chase PlanSM If eligible, you may use the My Chase Plan feature through Chase.com or the Chase Mobile App to create, from recent eligible purchase transactions or eligible amounts, a My Chase Plan balance with set repayment terms, subject to the My Chase Plan Fee. From the available offers, you select how many billing periods it will take to pay the My Chase Plan balance in full by making regular payments each monthly billing period. For each billing period during which there is a balance in the My Chase Plan, you will be charged the My Chase Plan Fee, rather than interest under the Purchase APR. 

An eligible purchase transaction for My Chase Plan is a purchase of at least a specified dollar amount but may not include certain purchase transactions, such as cash-like transactions and any fee owed to us, including Annual Membership Fees. An eligible amount for My Chase Plan is a portion of your account balance, as specified from time to time within the My Chase Plan experience. Cash advance, balance transfer and My Chase Loan transactions are not eligible for My Chase Plan.

Your ability to create a My Chase Plan balance is based on a variety of factors, such as your creditworthiness, your credit limit, and your account behavior. You will not be able to create a My Chase Plan balance if you enroll in a debt management program or if your account is closed or in default. 

When you have a My Chase Plan balance on your account, we will not charge you interest on new purchases if you pay your entire Interest Saving Balance by the due date each month. At our discretion, we may make My Chase Plan available to you ; we may decline a My Chase Plan transaction for any reason.

6. Paying Us Back The " Interest-Free Period ( also called Grace Period ) on Purchases '' section within the Paying Us Back section of your Cardmember Agreement is amended to clarify the definition as follows : IMPORTANT INFORMATION WHAT IT MEANS TO YOU OUR RESPONSIBILITY Interest-Free Period ( also called Grace Period ) on Purchases When your account is in an interest-free period, interest is not charged on new purchases. 
Your account is in an interest-free period when you have paid the New Balance or Interest Saving Balance shown on your most recent billing statement by the due date and time.

If you do not pay the New Balance or Interest Saving Balance shown on your most recent billing statement by the due date and time, you will lose your interest-free period and we will charge interest on your purchases. 
You can regain the benefit of the interest-free period by paying your New Balance or Interest Saving Balance by the due date and time. 
After you enter an interest-free period again, interest charges on purchases may still appear on your next billing statement. This reflects interest charged from the beginning of that billing cycle through the date that your payment for the prior billing statement was received. 
Balance Transfers, Checks and Cash Advances do not have an interest-free period and if these balances are not paid in full by paying your New Balance or Interest Saving Balance by the due date and time, you will lose your interest-free period on new purchases. 

When your account is in an interest-free period, we will not charge you interest on new purchases. 
When your account is not in an interest-free period, we will charge you interest on your purchases from the date the purchases appear on your account until your New Balance or Interest Saving Balance is paid in full. 
For more details about how we calculate your interest charges, see the Interest Charges section of this agreement.

7. How to Avoid ... 

The " How to Avoid '' section of your Cardmember Agreement is amended to include a new section for Penalty APR, as follows : " HOW TO AVOID ... '' WHAT TO DO WHAT IT MEANS Penalty APR Do Not : Fail to make a Minimum Payment by the date and time that it is due ; or Make a payment to us that is returned unpaid. 
We can apply the Penalty APR, which is higher than the APR you would otherwise pay, for either of these reasons.

Penalty APR on New Transactions : If you fail to make a Minimum Payment by the date and time that it is due, but you make the payment within 60 days of that due date, we may apply the Penalty APR. We also may apply the Penalty APR if you make a payment to us that is returned unpaid. In either instance, the Penalty APR will apply to new transactions. After we apply the Penalty APR, we will review your account from time to time to see if a reduction in the APR is appropriate.

Penalty APR on outstanding balances and new transactions : If we do not receive the Minimum Payment within 60 days of the date and time that it is due, then we also may apply the Penalty APR. If we apply it in this instance, the Penalty APR will apply to all existing balances on your account and new transactions. If you make six consecutive minimum payments when due beginning with your first payment due after we apply the Penalty APR, then the Penalty APR will no longer apply. If you do not make six consecutive minimum payments when due beginning with your first payment due after we apply the Penalty APR, then the Penalty APR could remain in effect indefinitely. After we apply the Penalty APR, we will review your account from time to time to see if a reduction in the APR is appropriate.

Amendment to your Cardmember Agreement : The changes described in this notice amend your Cardmember Agreement and replace the corresponding terms that currently apply. Any terms of your account not described in this notice continue to apply.

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Company response to consumer: Closed with explanation