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Dave wrote to me and asked the following question.

“Dear Steve,

Caught in the Chase scam. Accepted offer of “low interest for the life of the loan” to consolidate debt with a Chase card. I have always paid on time and more than the minimum, and have not used the card for shopping or other purposes. They now advise that my minimum payment will go up to 5% (from 2%) and I cannot possibly meet their demand. I had already (too late) changed my standard of living. I don’t have cable tv, no cell phone, don’t smoke, drink, play the lottery, or have any hobbies that take my money.

Chase says there is no ‘opt out’ for this issue, other than to accept the 2% minimum with a much higher interest rate. Is there any recourse?

Dave”

Dear Dave,

To sum up the situation succinctly, “you’re screwed.”

If the offer made to you was to either keep the 2% payment but have your interest raised or keep your current rate but pay 5% of the balance as a monthly minimum payment, you fell in the same trap as many others.

You might want to try and contact the Proactive Solution Team at Chase and tell them the new terms create a financial hardship for you. They may elect to close your card and keep your rate low. Call Chase customer service using the telephone number on the back of your card and ask for the Proactive Solution Team.

This trap is designed to trip people up and lead them into default which in turn increases income for Chase Bank. It is a brilliant but simple plan for Chase to achieve that goal.

Best little part of the plan is the fact that Chase is apparently not offering an opt out path for current card holders. And the unfortunate part is they don’t have to offer one. In 2010 new credit card laws will go into effect that will prevent such action but as of today, that behavior is perfectly legal.