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from the to-err-is-human-to-forgive-divine dept.
'It's Crazy': Chase Bank Forgiving all Debt Owed by its Canadian Credit Card Customers:
Bank says this was the best way to exit Canada after folding its Amazon and Marriott Visa cards
Finally, a good-news story about credit card debt.
U.S.-based Chase Bank is forgiving all outstanding debt owed by users of its two Canadian credit cards: the Amazon.ca Rewards Visa and the Marriott Rewards Premier Visa. The bank retired both cards last year and said it's wiping out cardholders' debt to complete its exit from the Canadian credit card market.
[...]After 13 years in the Canadian market, Chase decided to fold its two Visa cards in March 2018.
The bank — which is part of global financial services firm JPMorgan Chase & Co. — wouldn't say how many Canadians had signed up for the cards or how much debt was outstanding.
[...]Credit card rewards expert Patrick Sojka said Chase likely concluded that debt forgiveness was ultimately cheaper than continuing to collect credit card payments in Canada.
"They're still probably paying taxes, paying accountants, and for them, they just probably worked it out and [said], 'Let's just forgive the debt and fully get out of the country.'"
But he's stumped as to why the bank didn't instead opt to sell the debt to a third-party debt collector, which would allow Chase to recoup some cash.
"It is definitely a head-scratcher, for sure," said Sojka, the founder of Rewards Canada, a site that tracks reward programs.
Chase told CBC News it chose the debt-forgiveness route so that everyone benefited.
"Ultimately, we felt it was a better decision for all parties, particularly our customers," spokesperson Maria Martinez said in an email.
The windfall is generally not considered taxable unless the credit card was used to purchase items for their business. As always, check with your tax advisor if you are at all unsure.
(Score: 2, Troll) by JoeMerchant on Friday August 09 2019, @07:13PM (18 children)
I think this decision says more about the cost of continuing collections in Canada than Chase's charity.
Even if pursuing collections might have yielded a small net profit, the PR value of being a "good guy" bank is worth quite a bit.
So, all 3 of them that have outstanding debt can now celebrate. Beauty, eh?
Україна досі не є частиною Росії Слава Україні🌻 https://www.pravda.com.ua/eng/news/2023/06/24/7408365/
(Score: 2) by DannyB on Friday August 09 2019, @07:46PM (7 children)
It may say that. But I am suspicious that it hides something shady that Chase CA would rather everyone were to ignore, or not discover.
If you eat an entire cake without cutting it, you technically only had one piece.
(Score: 2) by FatPhil on Friday August 09 2019, @07:58PM (2 children)
I think it's to persuade its US customers to max out their credit cards, on the off-chance that they get lucky and have their debt cancelled!
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 3, Touché) by DannyB on Friday August 09 2019, @08:35PM (1 child)
You call me a cynic? :-)
If you eat an entire cake without cutting it, you technically only had one piece.
(Score: 4, Funny) by All Your Lawn Are Belong To Us on Friday August 09 2019, @09:59PM
Would you prefer, "Jane you ignorant slut! [wikipedia.org]" ?
This sig for rent.
(Score: 2) by inertnet on Friday August 09 2019, @08:42PM (2 children)
They ran out of Viagra to screw the customers?
(Score: 2) by DannyB on Friday August 09 2019, @08:46PM (1 child)
In Canada can't they get drugs more cheaply and easily? It seems difficult to believe they would run out. Unless there were a rush on it, overwhelming the supply chain.
If you eat an entire cake without cutting it, you technically only had one piece.
(Score: 0) by Anonymous Coward on Friday August 09 2019, @08:53PM
If there is ever a real tradewar then they won't be able to rely on slave labor from china anymore, then there will be shortages due to the price fixing.
https://www.nbcnews.com/health/health-news/fda-recalls-are-reminder-china-controls-much-world-s-drug-n900716 [nbcnews.com]
(Score: 3, Interesting) by shortscreen on Saturday August 10 2019, @05:20AM
Maybe the database pertaining to these cards got hit with ransomware and they no longer know who owes what.
(Score: 2) by The Mighty Buzzard on Friday August 09 2019, @08:07PM (2 children)
Yup, pretty cheap advertising since I'm reading about it from well outside Canada and on a news site where it's not especially on-topic.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Friday August 09 2019, @09:46PM (1 child)
My bet is the ongoing business costs would cost more than just walking away. Remember they were the ones owed money. The money is already 'gone'. They pretty much walked away for 'free' and it does not cost them more to keep chasing (hehe) it down.
They probably could not flip it to a collection company as probably most of the debtors were not in default.
They then get some free advert out of that.
Think about it this way. Lets say someone owes you 100 dollars. You do not have 100 dollars. They spent it already. That money is gone. The best you can hope for is they give it back. Lets say you are spending 10 dollars a month to harass them to give it back. In 11 months you are now losing money. Or you could walk and just do nothing.
(Score: 2) by JoeMerchant on Friday August 09 2019, @11:29PM
My University wrote me a parking ticket the week before classes started in the Fall, of the year that I had graduated in the Spring. I already had copies of my transcripts. The ticket was only $20, but... the parking lot was dead empty and in summer you don't need to display a decal that they haven't even sold yet for the fall. I appealed, they denied. I let them send me collection letters which they did every month for about 7 years. 84 letters, with ~$0.30 postage on each - plus cost of envelopes, handling, employee reviews of the data... yeah, it was about time for them to give up.
Україна досі не є частиною Росії Слава Україні🌻 https://www.pravda.com.ua/eng/news/2023/06/24/7408365/
(Score: 2, Informative) by barbara hudson on Friday August 09 2019, @08:10PM (5 children)
SoylentNews is social media. Says so right in the slogan. Soylentnews is people, not tech.
(Score: 2, Insightful) by Ethanol-fueled on Friday August 09 2019, @10:10PM (4 children)
Just what is the point of retailer-branded credit cards? An extra 5-cent per-purchase discount at Best Buy?
(Score: 1, Funny) by Anonymous Coward on Friday August 09 2019, @10:14PM (1 child)
Now we know what Soylentil does not have a credit rating!
(Score: 1, Flamebait) by Ethanol-fueled on Friday August 09 2019, @10:17PM
I have a credit score of 237, which strongly implies that I have the intelligence it takes to Jew the Jews.
(Score: 0) by Anonymous Coward on Saturday August 10 2019, @07:39AM
For whom?
The people using them will do it for the perks, or to better track spending by origin, or set them to restricted use, or use them for children.
The stores will do them for increased loyalty, a cut of the transaction fee, and because studies show that people who have them tend to spend significantly more.
The card companies will do them for the transaction fee, because people with them spend more, and because there is a demand that they want to fill before their competitors without that much of a marginal cost per new store.
(Score: 3, Informative) by JoeMerchant on Sunday August 11 2019, @12:41AM
Apparently, store cards have a higher risk appetite than general credit cards. At least in the 1980s as a young person with no credit history you pretty much had to build your initial credit history you on the store cards.
Україна досі не є частиною Росії Слава Україні🌻 https://www.pravda.com.ua/eng/news/2023/06/24/7408365/
(Score: 2) by driverless on Saturday August 10 2019, @03:17AM
They want to keep it a secret, but I can tell you: Thomas Tremblay has $125 outstanding on his card, and Hannah Boucher has $47.50.
(Score: -1, Offtopic) by Anonymous Coward on Friday August 09 2019, @09:53PM
Apparently Canada sold off its last gold reserves in 2016 and used it to buy "debt-based instruments": https://tradingeconomics.com/canada/gold-reserves [tradingeconomics.com]
I wonder what this will mean going forward.
(Score: 2) by Rosco P. Coltrane on Saturday August 10 2019, @02:03AM (1 child)
Those of us who insist on keeping their credit card in the black don't generate any money for the banks. With that move, Chase essentially rewards people who keep theirs in the red, and encourages others to do the same.
IMHO, that's why they're doing it: it's a subliminal message to credit card owners to tell them poor finance keeping might win you big.
Fuck banks...
(Score: 1, Informative) by Anonymous Coward on Saturday August 10 2019, @04:25AM
This is not true, the card issuer gets a cut of every single credit card transaction (the "interchange rate"). The rates vary on details but is typically about 1% or so.
(Score: 2) by Gaaark on Saturday August 10 2019, @03:13AM
makes me wish i'd racked up thousands in debt on a credit card.
Maybe i'll go do that now and then open up some fortune cookies to see how my future is.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(Score: 0) by Anonymous Coward on Saturday August 10 2019, @02:38PM
Hey, remember that time that BofA bought billions in mortgages for pennies on the dollar with a zero-interest loan from the government for TARP?
Those people got fuck all.