J.P. Morgan Chase is evil: $40 in late fees on an $11 balance!

Whenever possible, we use our Costco AmEx card because it has been good to us. We get a percent or two back on our purchases, and when our brand new video camera was stolen in a Paris train station years ago, Amex cheerfully compensated us.

But we recently made a purchase on our Chase Sapphire card somewhere Amex was not accepted. And when the bill arrived, steam began pouring out of my head. Here’s how Chase Bank lost my business.

I called at 9:23 am. Before talking with anyone, the message said, “We’re sorry. If you feel you were disconnected by error, please call back. We apologize for any inconvenience.”

I called right back at 9:26 am and was told I was speaking with [name removed] in Orlando.

I explained that we never saw the bill and normally pay all our bills upon receipt. I said $40.50 in late fees and one month’s interest on an $11.94 balance seems totally unreasonable.

She said, “We wouldn’t be able to adjust fees. We do have the correct mailing address and nothing was sent back to us.”

She said the late fee was calculated based on the amount outstanding during the statement period. The late fee was applied 8/17, the same day we made a $490 purchase using the card and three days before the close of the billing statement. According to Chase, one missed payment on $11.94 plus three days interest on $490 — with interest rates at about 0.2%! — equals $40.50.

I asked, “So if we hadn’t made that purchase, we wouldn’t have been charged a late fee?”

She said we would still have received a late fee, but it would have been $15, not $39.

I said I knew it wasn’t her fault but that this was outrageous and that I had $20,000 sitting in another Chase account that I would be moving to another bank immediately and that I would be canceling this card as soon as I paid it off. I then said, “Have a nice day” and hung up.

These big banks are evil!

P.S. My wife emailed me: “Can you look into one of the local banks, like People’s Bank, near us? Chase has annoyed me for quite a while. Their bank accounts have extremely low interest rate compared to others, and they charge a lot of fees.” With pleasure!

P.P.S. The J.D. Power small business bank ratings give TD Bank the top rating. It’s J.D. Power’s only five-star small business bank. I’ll move my small business banking to them. I’m angry enough at Chase to head out the door this minute, but I’ll wait till Monday so I can bring my son (whose last day of school at his daycare is today) with me and teach him how banks work. We’ll also move our family banking from Chase and Citibank, both of which “earned” lousy J.D. Power scores. Sadly, the clear-cut retail banking winner in the Northeast, Eastern Bank, doesn’t operate around here. But moving to just about any other bank will be a step up from Chase.

P.P.P.S. A friend of my wife seems to be something of an expert on how banks handle late payments. She says some banks are willing to forgive one late payment per year but that Chase NEVER forgives anything.

Posted by James on Friday, August 27, 2010