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Over the years we have received quite a few complaints alleging that Chase Payment Protector is a scam. The complaints generally centered around deceptive practices by Chase in getting customers to sign up for this service and Chase‘s reluctance to honor it.
The complaints usually state that it was rather difficult to get this service cancelled after it was added to an account, taking months in some cases.
So, is Chase Payment Protector a Scam? Let’s take a look at what it is and whether or not it is, in fact, a scam.
Chase Payment Protector Overview
Chase Payment Protector is a service that Chase offers to it’s customers. This service allows customers to suspend payments for up to two years without incurring interest or plan fees. Of course, this isn’t free, so Chase charges customers $0.89 per $100 balance. Customers are only charged if there is a balance left over, so customers who pay in full will not incur the $0.89 fee for Chase Payment Protector.
This service is geared toward customers who have serious life events. Payments can be suspended for up to 4 months for events such as marriage and the birth of a child. Payments can be suspended for up to two years for events such as the loss of employment or disability.
Why Some Say It Is a Scam
In line with the mentioned complaints, customers (and lawsuits) have alleged that Chase does not honor the plan. A 2009 lawsuit claimed that Chase cancelled accounts and performed other unscrupulous activities in order to demand payment from their customers. In general, it seems that a lot of customers have not had a good experience with this service and felt that they were unfairly manipulated by Chase.
Let’s suppose that you are President of the Chase Fan Club and jump at all of their offers. You see this and think that it is effectively an interest rate of 0.89 percent. Not a bad deal, right?
Chase Payment Protector only applies to future purchases. Suppose you lose your job a month after signing up for this service. You’ll still owe any money that is past due or over the credit limit that you incurred before this event and have to pay interest and normal fees on it – plus 89 cents per month for this plan.
The benefit is that you can incur new purchases without paying interest on them immediately. Suppose you become strapped for cash (due to your unemployment) and have to keep the water running and the table full of food. You can charge these expenses to your credit card and pay $0.89 per $100 – instead of your normal interest rate.
The $0.89 will be much lower than your interest rate (if you are not in a 0 percent introductory period), so you’ll make out better there, at least temporarily.
However, you’ll have to pay it back in a set period of time or you’ll be paying interest on those purchases, which is the last thing you will want to do if you remain unemployed.
If you can pay the balance off within the stated timeframe (2 years, 4 months, etc.), then you’d be much better off with the Chase Payment Protector plan than if you charged expenses and incurred interest. Otherwise, you’ll be paying 89 cents plus interest, making you a little worse off.
Should You Consider Signing Up For Chase Payment Protector?
If you live a stable life and are financially secure, there is not much of a reason to sign up for this plan. It’ll probably be one more hassle for you if you happen to miss a payment 1 month, even though it’ll only cost 89 cents.
The reason is because of the difficulty that some have reported in getting it cancelled – meaning you may have to make a long call (or more) to a customer service representative to cancel it.
If you think that there is a decent chance that you’ll have a major life event (birth of a child, job loss, etc.) in the foreseeable future, then this could work out in your favor.
However, if you are strapped for cash to the point that you would spend on your card without paying it back in the short term, then you should probably hold off on your plans (child birth, etc.) or save up more money before it happens.
Essentially, there should be no reason for you to sign up for this service, as you should take the necessary steps to achieve a more secure financial life if you anticipate needing it in the first place.
When we think of scams, we often think of a shady telemarketer stealing our credit card numbers or a phishing email. In that sense, this is not a scam.
However, with reports of customers who were essentially tricked into signing up for Chase Payment Protector and others who had it added without their consent, it points towards shady business practices. This is not to say that Chase as a whole is a bad company – or is great – but, on this issue, they seem to have really dropped the ball. It is probably best to just shy away from this service that Chase offers – and check your bill for unauthorized charges if you have a Chase card!
Credit Shout is a community of personal finance experts dedicated to helping you save money and make smart financial decisions. Learn how to master your credit card rewards, improve your credit score and start eliminating your debt.