Credit card boosts minimum payment
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NEW YORK - JPMorgan Chase & Co., the biggest US credit card issuer, plans to raise the minimum payment on balances to 5 percent for some customers, less than a month before new federal curbs begin to take hold.
The increase from 2 percent starts in August, Chase said in a notice received by customers in June. Customers who pay less than the minimum may be charged extra fees, the bank’s website says. JPMorgan has about 159 million cards in circulation, a regulatory filing shows, and a spokeswoman said the new minimum affects less than 1 percent of its customers.
The change is at least the second disclosed by JPMorgan, which told consumers this month balance-transfer fees will rise to 5 percent. Card issuers have said a law signed by President Obama to restrict interest-rate increases and penalties will push up fees, curtail credit, and restrict rewards. The law was aimed at practices that are unfair to consumers.
Citigroup Inc. raised rates on as many as 15 million credit card accounts it cobrands with Sears Holdings Corp., Macy’s Inc., and other retailers, the Financial Times reported, citing people close to the situation. The new law requires that consumers receive 45 days’ notice of “significant’’ contract changes. The law starts to take effect Aug. 20.
Chase confirmed its balance-transfer fee on credit cards will rise in August to 5 percent from 3 percent. The bank cited “new federal regulations’’ in a notice to cardholders.
JPMorgan chief executive Jamie Dimon said May 27 the card business was the “most challenged’’ and the new rules could cost the bank about $500 million. The unit lost $547 million in the first quarter.
