Credit Card Companies Respond to Congress

Congressional action causing changes in credit card industry…

Well, it looks like all the attention Congress has been paying to credit card companies and their questionable practices is starting to pay off. As discussed in our recent post, “Citi Bank Eliminates Fees,” Citi Financial Services announced that they would be making some dramatic changes to their policies. Now, it looks like Chase will follow suit! Surprisingly, these changes actually favor cardholders rather than the credit card companies.

Changes at Citi Bank

On March 1, Citi Bank announced that they would no longer utilize their “universal default” policy. In case you aren’t familiar with universal default, its just one more trick credit card companies use to suck more money out of your pocket. Credit card companies use universal default as a means to raise your interest rates if you happen to make a mistake with another credit card. In other words, if you pay one credit card late, another credit card can use this late payment as the basis for raising your rates on their card. It’s akin to getting an increase in your electric bill because your gas bill was paid late.

Citi also announced they would no longer raise interest rates or change other terms within its credit card agreements indiscriminately. With these new changes in place, Citi cardholders should only experience an increase in their interest rate if they exceed their credit limit or make late payments.

* See our complete list of Citi Bank Credit Cards >>>
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Chase with Changes of Their Own

On March 27th, Chase Card Services also jumped on the customer-friendly bandwagon. In order to help make it easier for their customers to understand their accounts, the company launched a number of helpful new tools. These tools include free alerts that will help cardholders make their payments on time by sending friendly reminders by email, phone, or text message. In addition, the company will make it possible for cardholders to set up automatic payments each month. And, as an added incentive, the company will be offering a cash kickback to those that sign up for the service.

Chase will also be starting to contact customers that appear to be having financial problems in order to help them develop methods for getting their finances back on track. According to Carter Franke, chief marketing officer for Chase Card Services, this initiative “will help our cardmembers maintain healthy credit, learn the benefits of responsible credit use and avoid fees. This is good for our customers and good for us.” Franke goes on to say “We want to build a long-term relationship with all of our customers. We continually review our practices and policies and make adjustments to improve their value.”

* See our complete list of Chase Credit Cards >>>
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It’s nice to see a new, kinder, gentler attitude being displayed by credit card companies. According to Citi, these changes are being made in an effort to “put our customers first.” But the discussions recently taking place in Congress have probably spurned action by Citi and other card issuers. Either way, cardholders are the one’s who benefit from the recent changes– whether it was caused by goodwill or Congress.