Chase jacks up card fees

In what is expected to be the first of a series of such announcements by US banks, Chase, the retail arm of JPMorgan Chase, the largest credit card issuer in the US by cards outstanding, is to raise balance-transfer fees to 5 percent from August, just as legislation designed to limit interest-rate increases comes into force. The Credit Card Accountability Responsibility and Disclosure Act, signed off by President Obama on 22 May, also requires issuers to apply payments to balances with the highest interest rates first and prohibits universal default, a practice that increased rates on existing balances if cardholders missed payments to other lenders, even if their card accounts were in order (see RBI 613). Chase CEO Jamie Dimon had estimated that the new regulations could cost his bank about $500 million; its card unit reported Q1 losses of $547 million and analysts do not expect it return to the black this year