Chase Bank Introducing New Financing Plans
Chase has recently announced they will be adding two new features for many credit card customers – The My Chase Plan and My Chase Loan. This move may be in response due to similar competitor programs. Citi Bank currently offers credit card holders The Citi Flex Plan and Flex Loan. American Express offer customers a pay over time plan. These options are designed to allow customers additional financing options using their current lines of credit. While tempting, customers in general should weigh the pros and cons of these options before racking up additional high interest debt.
What These Plans Will Offer
The new plans will be available beginning August 10th, 2019. Eligible cardholders will receive notice that their credit card agreements will be updated to reflect these changes. The My Chase Loan works very similar to any other personal loan product. Customers will be able to take a loan against their line of credit. The loan can then be deposited in to a US based bank account. Your interest rate for this loan will be similar to your credit card interest rate. The rate will vary based on the current prime rate. This loan feature will only be available to select customers who meet Chase requirements.
The My Chase Plan is quite a bit different than the loan option. This is a finance plan that will allow customers to charge a purchase and then make payments on that purchase price. Each billing statement customers will be charged 1.72% of the initial purchase price. The terms will be laid out at the time of agreeing to the finance plan.
Check Out These Articles For Additional Information About Chase Bank and Chase Credit Products
- Chase Slate Balance Transfer Credit Card
- Increasing Your Line of Credit With Chase Bank
- Chase Credit Journey – Understanding Your Credit Score
- Chase Ink Business Credit Cards
Breaking Down The Plans – Are They Worth It?
Overall, these plans will not be the first choice option for most customers. The My Chase Loan charges a very high interest rate. While it may be appealing due to the fact that customers will be able to have immediate access to cash, you should consider the cost of this loan. Customers will be paying in high interest rates which are similar to what are charged by a credit card. Other options like personal loans can provide this same sort of financial assistance without necessarily paying the same interest rate. In fact, many personal loans offer somewhat reasonable interest rates in the single digits. Consumers should first learn more about personal loans before agreeing to a credit card loan to determine which makes the most financial sense for them.
The Chase Plan may work out for select customers but it is important to run the numbers first. Each payment will incur a 1.72% fee based on the initial financed amount. This may seem low but it is important to remember you are paying these each month. Consider a $100 financing option. Over the course of a year customers would pay a total of $120.64. This would be amount to an additional 20.64% on your initial balance.
Having additional financing options is always a good thing. Overall it is good to see Chase is matching the competition by bringing these products to their customers. However, it is important to keep in mind that these sort of options should not be seen as a first choice. Consumers should always strive to keep their high interest debt (ie: credit cards and financing options such as these) at zero. With this said, life happens and sometimes customers have to make tough financial decisions. These Chase financing plans should be seen as tools for a rainy day and not used when other, lower interest, options are available.
This article will be updated as the August 10th release date of these products approaches and additional information becomes available!