Chase has updated its payment options, and millions will have fewer options to pay their credit card bills.
The bank’s new credit card statements stipulate customers will no longer be able to use their cards with third-party buy now, pay later platforms. The new policy goes into effect October 10, so customers have several months to adjust their payment plans before Chase will start declining all payments rendered by those platforms, such as Klarna and AfterPay.
Chase already offers customers a buy now, pay later option through its own banking system, Chase Pay Over Time, available to eligible cardholders when they make purchases of $100 or more, or those of $50 or more on Amazon.
The buy now, pay later plans allow customers to split their payment over time instead of taking on a high charge all at once. They differ from typical credit card charges, as they don’t usually accumulate interest or added fees.
That means a big purchase like furniture or tech devices can be split across the span of six weeks or more. Travel expenses are also routinely put on buy now, pay later payment methods from top sites like Expedia.
Chase likely dropped the option of customers using other split-payment methods to drive interest toward its own version.
“Chase is doing something that other banks are slowly and methodically implementing: pushing customers to their own financial products,” Alex Beene, financial literacy instructor at the University of Tennessee at Martin, told Newsweek.
He added: “Their elimination of third party programs signals that customers who want a similar process will have to latch on to Pay Over Time for those purchases moving forward. This may be irritating to some customers, as the Buy Now, Pay Later set-up of other vendors can be more convenient, especially when you’re checking out through a retailer. However, in the grand scheme of things, Chase’s program allows them to carry out the same concept.”
Experts believe Chase is likely to be the first of many to implement rules in hopes of pushing more business to their own customer payment tools. American Express and Citi also have their own buy now, pay later options.
“I believe we will see more banks moving away from third-party providers, and trying to bring those transactions and the associated fees in-house,” Drew Powers, founder of Illinois-based Powers Financial Group, told Newsweek.
Due to this expected shift, Chase will likely not see wide-scale resistance from customers.
“It is unlikely there will be customer pushback,” Howard & Howard banking attorney Dennis Merkley told Newsweek. “There are a limited number of customers using this service. Chase offers a comparable service, and Chase provides ample notice to customers.”
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
The post Chase Is Changing How People Can Pay Credit Card Bills: What to Know appeared first on Newsweek.
