Every consumer with credit card debt dreams about it magically disappearing. For JP Morgan Chase customers with Canadian credit cards, the dream has become a reality. The bank announced last week that it had erased their remaining debt as it exits from the Canadian credit card market.
The bank wouldn’t say how many Canadians had its credit cards or how much debt was outstanding, but Maria Martinez, a Chase spokeswoman, confirmed the great news, saying:
“Chase made the decision to exit the Canadian credit card market. A further business decision was made earlier this year to forgive all outstanding balances in order to complete the exit.”1
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Douglas Turner of Coe Hill, Ontario was one of the ecstatic customers. He learned that he no longer owes the $6,157 still owing on his now defunct Amazon Visa. He said:
“I was sort of over the moon all last night, with a smile on my face. I couldn’t believe it.”2
After thirteen years in the market, Chase began planning its exit from the country two years ago when it stopped accepting new applications for its two Canadian credit cards, which were co-branded with Amazon and Marriott. The bank closed its existing accounts in March 2018 and blocked customers from incurring new charges, but continued to collect payments on the remaining balances.
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Paul Adamson, a resident of Ontario, learned of his lucky break last week when he tried to pay the bill on his Amazon card. His bank told him that it could not process the payment. Mr. Adamson, 43, called Chase and learned that his remaining $1,600 debt was gone.
Chase’s decision is extremely unusual. NerdWallet’s credit card expert, Sara Rathner, said she had never heard of a bank choosing to wipe off its debt when it shuts down a credit card product, adding:
More typically, the bank would keep collecting payments or sell the remaining balance to a debt buyer. When HSBC left the United States credit card business, for example, it sold its portfolio to Capital One.1
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A stumped Patrick Sojka, a Credit card rewards expert, said Chase most likely decided 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.'”1
Martinez said that Chase chose the debt-forgiveness route so that everyone benefited, adding:
“Ultimately, we felt it was a better decision for all parties, particularly our customers.”2
Pretty incredible. Not often is there a good news story about a credit card.
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