all 13 comments

[–]magnora7[S] 4 insightful - 2 fun4 insightful - 1 fun5 insightful - 2 fun -  (6 children)

What a surprising and crazy move. Why in the world would chase knowingly relinquish debt? Doesn't make sense to me. They must've gotten some sort of benefit to do this, right?

This is the closest thing I've seen to a "Jubilee" in my lifetime

[–]Optimus85 3 insightful - 2 fun3 insightful - 1 fun4 insightful - 2 fun -  (5 children)

Here's the alleged reason: “Chase made the decision to exit the Canadian credit card market,” the company said in a statement. “As part of that exit, all credit accounts were closed on or before March 2018. A further business decision has been made to forgive all outstanding balances in order to complete the exit.”

So what would convince a mega bank to walk away from what could be millions of dollars? The company tells CBC it was the best decision for the bank and customers, hinting that forgiveness was probably cheaper than continuing to process payments or farm it out to a third party debt collector.

https://fortune.com/2019/08/08/chase-forgives-outstanding-credit-card-debt-canada/

[–]magnora7[S] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (4 children)

Thanks for digging that up.

hinting that forgiveness was probably cheaper than continuing to process payments or farm it out to a third party debt collector.

I find it very hard to believe giving up all the debt was cheaper than selling it to a 3rd party... unless the debt was so incredibly insolvent that the assumption is it will mostly never be paid off...

[–]Vigte 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

unless the debt was so incredibly insolvent that the assumption is it will mostly never be paid off...

Welcome to Canada...

[–]Optimus85 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

Sometimes it costs them more money trying to recover those debts than the debt itself. Is it the best decision a financial institution can make? Who knows... Remember the sub-prime mortgage crisis and the government bailouts using taxpayer money?

[–]magnora7[S] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (1 child)

Remember the sub-prime mortgage crisis and the government bailouts using taxpayer money?

Yeah I do, but then I remember the government bailing them out then the banks learning nothing and continuing the same behavior.

The loan forgiveness never happened in the US. But here it seems they've preemptively discharged loans they don't think they can make money on. This is... new

[–]Optimus85 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

Yeah, it's kind of surreal.

[–]thefadd 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (1 child)

Okay, so before (or while) people go ape shit over this. Let's break it down a little.

I don't pretend to know the international credit card market aside from the fact that most countries don't do credit like America does credit.

Chase was offering TWO VISA cards in Canada. One through Amazon.com and one through Marriott (the hotel). They had previously CLOSED all of these accounts in the prior 10 months.

I don't pretend to understand the international credit card market but this seems like minor penetration. I'll look up the Canadian credit card market the rest of the night.

You only had Visa and you only had two processors. Most people when their account gets closed start paying off as fast as they can. Well, most responsible people (such as Canadians are) do.

SO: All these accounts were closed months ago and have been collected on since.

TL;DR: Canadians pay off their debts fast. It's no longer financially responsible for the firm to attempt to collect outstanding debts.

Open questions: Why did Chase decide to discard their Marriott and Amazon Visa cards last year?

How big of a player IS Chase on the international credit card market?

This seems like kind of a PR spin with no major economic downside for Chase. In America (and possibly Europe?) we think of Chase as a big name. Doesn't seem like Canada was crazy important to them, though.

Happy to hear substantive other inputs.

[–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Interesting, thanks for the info. I understand this even less than I thought I did.

[–]thefadd 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (3 children)

I guess Canadians don't use credit cards. Let me look into this.

[–]Horrux 1 insightful - 2 fun1 insightful - 1 fun2 insightful - 2 fun -  (2 children)

Canadians use CCs the same as US people do, or nearly so. Things are not very different across our border except with Québec, which has a completely different culture. But even there, CC usage is very similar, with the differences being in altogether different areas of daily life.

[–]thefadd 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (1 child)

somehow I doubt that

[–]Horrux 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (0 children)

You must be one of them stupid, uneducated 'muricans. Fuck yeah.