Washington Mutual secured-card customers received bad news last week. Customers learned that the secured-card program, which was one of the better ones, is being discontinued. The program will officially be killed on January 12. The decision to kill the program was made by JPMorgan Chase, which acquired the beleaguered bank in September.
A Washington Mutual source, who did not want to be identified, says that Chase had a problem converting the WaMu secured cards into Chase cards. In fact, Chase no longer offers a secured card, so it made the decision to ax the program an easy one. I'm told that without a secured card of its own, Chase would have had a problem servicing the WaMu accounts. What's more, there are no plans to reintroduce a secured product in the future.
WaMu customers will receive a refund check shortly after the secured-card program is discontinued -- and once WaMu reconciles customer accounts. If there isn't enough in the account to cover what customers owe -- meaning that a refund is not owed by WaMu -- customers will be responsible for making their accounts whole. Annual fees, meanwhile, will be refunded on a pro rata basis.
Meanwhile, this secured-card move should give current WaMu credit-card customers pause. Two things immediately come to mind. Number one, the WaMu card portfolio, which includes a lot of Providian customers that were brought into the WaMu fold when WaMu acquired Providian in 2005, will be analyzed for credit quality. There can be little doubt that some of WaMu's customers would not have made the cut if a Chase underwriter had been approving card applications for WaMu. Speculation is that Chase is going to let a large number of current WaMu customers fall away (run off). For people who used WaMu to rebuild their credit ratings and history, this will be bad news, especially given the current credit environment.
The second thing, though it's not nearly as bad as having your account closed, is that the free FICO scores that WaMu customers receive as part of their card membership may not survive the transition. That would suck. When FICO scores cost $15.95 a pop, it's a nice perk indeed when a consumer can get a free FICO score each month (story link here). In October, The Wallet, a Wall Street Journal blog, quoted a Chase spokesperson who said that it was "too early" to comment about the specifics of the WaMu/Chase integration (story link here). For now, I am expecting the worst and hoping for the best. UPDATE: It's Now Official: WaMu FICO Score Is Dead (story link).
In the meantime, I hear that JPMorgan Chase's acquisition of WaMu is going well. Indeed, all of WaMu's business divisions could be fully branded as Chase by mid 2009. No idea, though, when JPMorgan Chase will fully integrate WaMu's card operations.
I'm thinking the longer it takes, the better it will be for current WaMu credit-card customers.
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Monday, January 5, 2009
WaMu Secured Card First Casualty In JPMorgan Chase Acquisition
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40 comments:
American banks needs to go back to only issuing credit cards to people who can actually afford to have one like in the 70s and 80s.
I thought the same thing when I read your first sentence about them having trouble integrating secured cards. At least they are trying to integrate the non-secured.
I have two WaMu cards. One started out as a Providian card 7 years ago. The newer one is all WaMu.
We'll see which, if either, make it through the other side and become Chase cards.
Anon, pheww! I thought you were going to say the '50s and '60s. Remember when Bank of America blanketed the country with BankAmericards? Potential customers were receiving them in the mail, even though they never asked for them.
http://www.creditmattersblog.com/2008/09/everything-you-ever-wanted-to-know.html
Denizen (Clutch), I hope you make it through unscathed.
Uh oh... That new name is beginning to stick.
Anyway, thanks and I'll keep my fingers crossed for myself, others, and of course our beloved PFICO.
Yeah. That PFICO (Bankcard Industry Option FICO) score is a nice perk. That's something I do enjoy.
I think it will be interesting to see what happens to the credit limits on these cards. I have 3 Chase cards already (1 former Chase and 2 former FirstUSA/BankOne). My WaMu card has a very nice limit and I think that they will eventually lower it.
Jeff, no worries here. My two lowest limits are with WaMu and Chase. Bring them any lower and I won't even use them.
Will be interesting to see what Chase does with the limits on the WaMu cards that it migrates over.
What I find interesting is that different lenders have chosen distinctly different tactics
(AMEX=CLD Citi=RateJack Chase=NewFees Juni=Closure) With all the good AA taken, what will the rest do to stand out and be original?
They'll have to pick one of these. Citibank's didn't go over too well. I'd probably go with Amex's tactic. At least you can spin that one.
I give them more credit than you, I think they will come up with some really creative ways of screwing us.
Wondering what it will be keeps me at CB and CreditMattersBlog. That and the great refreshments served here.
Denizen, haha. Thanks for the laugh. I try to keep the refreshments fresh around here.
You're 'freshments are the freshest in town... keep up the good work!
Will do, Clutch. Will do.
Thanks.
At first, I wanted Chase to take their time on the integration process, as there were very little doubts that Chase would discontinue a good majority of the perks that Washington Mutual offered.
But as time goes on, I want them to speed it up. I really want to see where the chips fall, whether it's a pretty picture or not.
I'll be sitting by waiting. If Chase wants to close (or sell to another creditor) my oldest and my 2nd largest CL tradeline, I'll be sure to take my deposit funds with me. Since I'm a small fry and they're a large behemoth, I'm sure they won't miss it.
Let's see what happens.
In other words, you want to get it over with. I imagine a lot of people would rather things unfold nice and slowly.
Regardless, I have a feeling that customers aren't going to like the end result. Maybe I just don't have a lot of hope for how Chase is going to handle some of these WaMu customers.
what is strange is that they are closing "secured" accounts - these are accounts that already have the collateral to back them up... at least initially ;)
kind of a dumb move if you ask me.
Anon, I think the decision was mostly driven by practicalities. Because Chase doesn't have a secured product, it was going to have a tough time servicing the accounts. It didn't want to get back into the secured-card business (Chase used to have a secured card of its own).
But you're right. This was easy money. The accounts were backed by collateral.
My situation is this. I have been trying to build some sort of credit and had good standings with my secured credit through WaMu. Now I still can't get a nonsecured card and with Chase not offering a secured card I must move on to another financial institute that does. My history of good standing with the secured card is a loss of time. I wasted almost a year of working on this and now I must start all over again. Ya, that's kinda a sucker punch!
Anon, that's a tough situation. Lost in the shuffle are folks like you who were working on establishing a history -- but who aren't quite done establishing that history just yet.
I will say this: that year isn't a total waste. Your history will still show that you used your card responsibly. What other cards have you recently tried to get?
I wrote the other anonymous up above we will call "sucka punch". I just started today to find something different. Wamu has turned me down for an unsecured card evan though I spent so much time on their unsecured card. Without the unsecured card being available I see no other way of getting credit. I am off to see what banks currently still have unsecured cards available. I will most likely move my banking to one that has them.
Anon, keep me updated. Curious to see how this works out for you.
Good luck!!
What does Chase expect me to do with canceling my secured card? I am a college student trying to establish my credit, I paid off every month online BEFORE my bill came in then you give me the hose with no other option. I have collateral on my account and I am practically a zero risk. Chase you have left a bad taste in my mouth and I will miss Wamu's great service. I will take my business elsewhere.
Jakob, it's too bad that Chase has decided to leave WaMu secured cardholders high and dry. I've heard from more than one reader that this decision sucks and that it leaves them with a dearth of options.
Since Chase didn't have a secured product of its own, the bank found it easier to just terminate the WaMu product. I understand that decision. Doesn't mean, though, that customers weren't hurt by the decision.
Jakob, when you find another product, let me know what you settled in on.
This is anon "sucka punch" again. So today I looked up many options for who still has "secured credit" options. I weighed some options and decided to go with Wells Fargo. They seemed the lesser of evils. I opened a savings, two checking accounts, and a secured credit card for free. The secondary checking account was for any ebay and paypal transactions. They suggested this because they have had cases with online security and don't think it is a good idea to have these things tied into your main accounts.
Their secured credit line is almost identical to Wamu. Minimum opening of $300 up to I believe $13,000 max. They also have the option of adding more into it by showing up at the branch to put money into it to raise your limit. Not bad eh'. So now I began the process of changing everything over to Wells Fargo in hopes that this will help.
One other thing...The person I spoke with was very knowledgable. If anyone else goes somewhere else please tell us all about it.
Sucka punch, thanks for the follow up.
I vowed long ago to never do biz with Wells Fargo. I was brought into the WF fold years ago when the bank bought First Interstate bank. I was not happy with WF. Everywhere I turned, WF was charging me for something. I eventually withdrew my money from WF and headed to WaMu. Alas, we know that WaMu has now been killed.
Others, however, have had a good relationship with WF. No problems at all. It will always be a YMMV (your mileage may vary) situation. Sounds like you're happy. Just keep an eye on your nickels and dimes.
On Dec 29,2008 recieved letter from Chase stating "We will be closing your securted credit card on Jan 12 and refund your balance" called the 800 number and went to my bank Washington Mutual and was told " As of the 12th of Jan it will be closed by Chase.
On Jan 20th checked our online account with W.M/ Chase credit card and it was closed with a 10.00 refund from our 29.00 fee to open it 9 months ago refunded to our account.
READ ON
Checked it again on the 24th of Jan and Chase opened our account back up and "And hit us with Late fees and interest rate of 77.00 dollars and when we called to point out "Chase closed our account on the 12th of Jan was told" You have to pay the late fee with interst of $77.00 because you did not make a payment that was due on the 22nd of Jan????? and it gets better.........."We still report to your credit and if you do not pay this, your credit will be ruined and you will not recieve your money (balance on secured card is or was around 500.00)
So after closing our account, reopened it and the 500.00 balence will be with interest around 400.00 refund if we ever see it!
This is robbery from the Chase Banking
Anon, sounds criminal to me. Which entity are you dealing with? Chase or WaMu? I suggest you call whichever one you aren't currently dealing with. Get a supervisor on the phone.
I'd like to know how this gets resolved. Keep in touch.
Same thing happened Anon. The person on the phone said pretty much told me I wasn't the only one getting screwed. Time for Class action.
Just an update!
I recieved a letter on 26th of Jan from Chase Thanking me for being one of there customers with yet another 800 -356-0011 if we had any questions!
Called and was told our secured credit card was closed on Jan 12 and a refund of 458.00 from our balence of 505.00 will be returned in 7 days. Asked what happened to our 505.00 was told we missed our pay date of 22th of Jan SO they hit us with 39.99 late fee and 9.00 fee for closing our account!!
Call me old fashion but this is stealing!
I pointed out Chase closed our account on Jan 12,2009 how do we make a payment........he said it really didnt matter who closed the account you missed you pay date on the 22th of Jan. 2009!
So thats it............Sadly we have had a checking account with Washigton Mutual for 20 years in (Good Standing) not one over draft or problem we will be closing that account on Saturday and look for another Bank!
Anon, that's just sad. Chase, as a result of this, will now lose a customer.
I take it that you talked to a supervisor?
Yes, I talked to Supervisor at Washington Mutaul who told me they did not want this to happen. And Supervisor at Chase who confirmed all the above to be true.
I feel very badly for all the people who have lost there hard earned money from this trickery and unfair practice.
Chase/JPMorgan is not a bank to be trusted!
Thank you
Anon, thanks for the follow up.
I also had a secured card, but only for 6 months or so. I doubt I'll qualify for an unsecured card. I called WAMU this weekend and they said something about the account being processed on the 31st of January, and that I can expect the refund in 15 business days. I had paid off my card about two weeks prior to their closing of the account, so I'm not sure why its taking them a month to get the refund to me.
I meant the 30th. I doubt they do much banking on non-business days. =)
Called the Controller of Currency customer Assi group 18006136743 and was told Banks can close any accounts at any time without notice, (read the small print) Ok What Chase did was close low risk secured credit cards around 200 thousand accounts on Jan 15, 2009 and then opened them 10 days later stating"You missed your due date and have been finded $39.00 dollar etc misc fees we will refund what is left in your account the middle of Feb?
We now have to wait for them to issue a refund of our funds less what they take out in bogus fees.
When major Banks act in irractional and unfair practices it fuels the fear in a lot of people about our economy.
I just found out that the payment I scheduled on March 1 for my WaMu/Chase account was lost during the transfer. Chase won't even admit it was their mistake and have charged me multiple $39 fees for non-payment! I am closing my account.
Anon, shoot me an email at plastic101@gmail.com. Want to talk with you about the situation.
Ugh, I know this is old news by now, but I'm a college sophomore studying abroad this year and am suddenly left stranded without a credit card. I got a secured WaMu credit card last summer to build credit because I didn't qualify for a regular credit card, and I knew it would be good to have abroad. So now suddenly I'm stuck in a foreign country and I can't even book hotel reservations online for when I have to travel back home. It's an enormous hassle! I'm definitely finding a new bank when I get home, just because I'm annoyed with the way Chase has handled this.
I initally started my CC secured, It went non secureed a year later. I totally forgot about the $1000 I put down in the first place. 4 days ago I called to cancel the card because of the rediculous interest rate they jacked it upto. Since then I have been tring to get that money back. The savings account is no longer on recored or atleast showing on my account. And they are doing an "investigation" into it. Hopefully ill get my money back.
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