I took the day off on the Fourth of July. It was my first, or maybe second, day off in six months, and one result was that I forgot to pay a Chase credit card bill. When I realized my mistake, I paid the bill, one or two days late.
The penalty? A $39 late fee, of course, which I expected. But Chase also tripled our interest rate. The monthly payment we had been making no longer even covers the cost of the interest, and our payment went up about $150 a month.
This wasn't our first bad experience with Chase. The first credit card the Outpost ever got had a reasonable 13 percent interest rate. We had it for three or four years and never went over our credit limit and never, in my memory, made a late payment. Then Chase bought the company that issued the card. Almost immediately, our credit limit was reduced, and our interest rate went to 29.9 percent. Pleas for mercy were ignored.
Fortunately, we have other alternatives. We have paid off the business card, and we will be able to close out our personal account. But the incidents set several thoughts in motion:
1. Defenders of the free market may say we have other options and shouldn't do business with unscrupulous companies. But in neither case did we choose to do business with Chase. In both cases, it bought out more honest companies that we had been dealing with. People with fewer options than we have can easily get trapped by scoundrels through no fault of their own.
2. The idea that usury is a crime runs deep in the human psyche, well back to biblical times and probably much longer. Credit card companies test the public's tolerance of usury at their peril.
3. As a small business owner, I don't have to speculate about how I would react if a loyal customer occasionally made a payment a day or two late. I would say, as I have said many times, "Don't worry about it. Thanks for your business." Honest customers are too precious to throw away on a triviality.
4. Just from a business standpoint, it would be interesting to hear how Chase thinks that what it does makes sense. We have been good customers for years. They have made money off us every single month. Now, because of one payment two days late, they will never make another nickel off us. How does that make sense?
5. What they did isn't a crime, but the penalty would be smaller if it were. All things considered, it would have cost me less to go to Chase headquarters and punch the CEO in the nose. The law takes a dim view of misdemeanor assault, but it also understands that some people need punching.
6. Every couple of weeks, we get a "preferred customer" offer from Chase asking us to borrow more money at low rates, sometimes as low as 4 percent. When the next offer comes, should we take it?
UPDATE: This story curled my toes.