Led by Chase – the top issuer – credit card providers are converting more of their best-rated customers to variable rates, a policy category that is exempt from provisions in the upcoming reform laws. Avoiding the tougher rules on hiking fixed interest rates is one factor contributing to the trend. The other: variable rates, most often based on the prime rate, will mostly move upward in coming months, especially as the economy moves deeper into a sustainable recovery.
Major credit card issuers are offering extra reward points, promotional websites and online comparison shopping tools in an all-out blitz to grab the biggest share of Cyber Monday sales and beyond.
JPMorgan Chase, the nation’s top credit card lender, said today it will no longer require customers to settle disputes through arbitration, a practice that lawmakers and consumer advocates claim to nearly always favor the credit card companies.
With Chase and American Express leading the pack, credit card issuers sent out 180 million direct mail offers to U.S. consumers in October, a 34 percent jump over September’s batch of mailings.
A prominent consumer group has formerly asked the Federal Reserve to stop credit card issuers from “unfairly hiking interest rates” and put a halt to other dubious practices ahead of credit industry reform laws.
The bleak picture among major credit card issuers persisted again in October, with charge-offs – loans considered uncollectible – remaining high, and late payments of 30-plus days continuing to edge higher.
The chief executive of banking giant JPMorgan Chase & Co says that any bank, including Chase, is not too big to fail, contradicting the fueling rationale behind the huge bailouts of the financial crisis.
As far as anybody can tell, it will be the most lucrative credit card sign-up rewards deal ever. Chase, the largest credit-card lender, and British Airways, are expected to offer new customers 100,000 airline miles in what will very likely ramp up the competition among card issuers for affluent customers.