Chase suddenly canceling credit cards

August 12, 2009 7:20:39 PM PDT
You may remember Chase Bank bought Washington Mutual bank last year, and now many former WaMu customers say chase is closing their credit cards.

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Again, as we've heard even model customers are getting dumped this time by Chase. It's a familiar story as banks continue to tighten credit, but that's no comfort for those who are shut out.

Beverly Fishman had a great deal on her WaMu-Chase credit card -- zero percent interest until February. The only problem was that one day it suddenly didn't work.

"I was shopping for a friend's birthday present," said Fishman. "And they said it was declined I thought well I know I have a few thousand dollars left on the limit that's strange."

It wasn't until three weeks later that Chase sent her a letter saying it was closing her account, and the real shocker, the bank said one reason was, she didn't pay her accounts as agreed.

"It was very frustrating and irritating because they're accusing me of something that's not true," said Fishman.

But Fishman knew she'd paid all her bills on time. She checked her credit report anyway, and it confirms she was never late and her accounts are in good standing.

"To just shut someone's account down for no really good reason, I'd been paying on time there were no problems," said Fishman.

She isn't the only one. 7 On Your Side has a stack of complaints from consumers saying Chase suddenly canceled their accounts for no apparent reason.

"We're seeing enormous amounts of credit limits disappear without warning and taking some consumers by surprise," said Joe Ridout from Consumer Action.

Ridout said banks are closing credit card accounts because of the poor economy as delinquencies go up and high unemployment makes customers more risky.

Even new credit card protections set to take effect in February won't stop that from happening.

"It still will be entirely the banks prerogative whether or not they want to close a credit card account or continue lending you money," said Ridout.

So what can you do? He says you can always ask your bank to restore a closed account, or if you have a second credit card ask that bank to raise your credit limit. That may help your credit score.

Fishman wrote to Chase asking why it accused her of nonpayment, when she'd always paid.

"I will go to the California's State Attorney's Office to have your bogus claim investigated and perhaps 7 On Your Side," she said.

She contacted us and we contacted Chase.

The bank would not comment on her particular case, but said: "We constantly evaluate the risks and costs of funding credit card loans. When necessary, we make changes to pricing, terms or credit lines based on borrower risk, market conditions and the costs of making loans.

However, Chase did review Fishman's case and shortly after we called, agreed to reinstate her credit card.

That made Fishman pretty happy.

"So yeah, someone at 7 On Your Side got through to them and it all worked out so yeah, so good news," she said.

Chase Bank would not say how many customers have had their accounts closed recently, nor exactly what is the criteria. But it's worth asking the bank to reconsider if your account is closed.

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