Chase nixes $10 monthly fees, will credit accounts

Nearly 400,000 accounts were charged $10 a month since January

By Connie Prater

Update: New York Attorney General takes credit for rescinding Chase fee

Citing "customer feedback," Chase Card Services is rescinding a controversial $10-a-month maintenance fee it began charging nearly 400,000 credit cardholders in January.

According to a company spokeswoman, the credit card company will refund any maintenance fees collected so far and discontinue charging the fee.

"Beginning in April, we will be crediting affected customers' accounts for the full amounts that were charged," says Stephanie Jacobson, vice president of public affairs for Chase. Asked for a reason for the turnaround, she responded: "Based upon customer feedback."

Chase is one of several major credit card issuers who have added fees, cut credit limits, raised interest rates and changed terms as they struggle to manage riskier cardholder accounts. The changes have been met with consumer and Congressional outrage -- especially since the banks tightening lending standards were recipients of billions in federal taxpayer bailout funds designed to help increase lending and jumpstart the economy.

According to Jacobson, the 400,000 accounts that were charged maintenance fees represented "less than one half of 1 percent" of Chase's card portfolio. It included cardholders who took advantage of Chase's low-interest introductory card offers, but who had "made little progress in paying down these loans," Jacobson wrote in a follow-up e-mailed statement. "Our desire is to have these loans repaid in a reasonable period of time."

She indicated most of the customers who have taken advantage of Chase's low introductory rate financing repaid the loans within 24 months.

She says one change implemented by Chase -- increasing minimum monthly payment amounts on those 400,000 accounts -- will remain in place. Those cardholders must pay at least 5 percent of their total balances each month, instead of the previous 2 percent. 

To comment on this article, write to: Editors@CreditCards.com.

See related: Cuomo claims victory for Chase fee(asco), Credit card users beware: Terms, they are a-changing, Banks continue to tighten credit card lending standards

Updated: March 30, 2009

	Three most recent Credit account management stories: Credit card revenge spending – Getting burned by the one you love can inspire the desire to get back by charging up credit accounts. The ultimate cost, however, may be borne by you ... 7 ways to protect against being a victim of credit card revenge – Just suffered a break-up from a revenge-seeking ex? Here's how to make sure your credit is safe ... 5 smart things to do before new credit card law takes effect – For some, swift action is called for to lock in a deal before the law's provisions kick in Feb. 22. For others, the best move is to wait ...

	CreditCards.com's newsletter Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!