We have a mortgage with Chase. Today they sent an email about new automatic payment plans, including bi-weekly. I quickly jumped on that as I know bi-weekly payments result in 1/13th more payments per year (resulting in quicker pay-down), but also can reduce principal twice as often. I went to the gym, pondered my move, and wondered how and why super stingy Chase Bank would promote something that would save me money (and therefore cost them money). I came home to read all the fine print.
The good news is that the extra is applied directly to principle. The bad news, and what killed it for me, is that they don't actually apply any of the payment until the full dollar amount of the payment is received. When I set up their bi-weekly, beginning in April, they had me pick a date in mid-March to start the program. So what Chase is doing, is having customers send in half a payment 2 weeks early, sitting on the money NOT applying to principle at the time, then holding it until the 2nd half arrives 2 weeks later.
Customers are basically giving Chase a 2-week 0% loan every month as they simply HOLD and don't apply the mid-month payment!
Nice try, Chase!
EDIT: formatting, spelling
EDIT: 1 hour after posting, I just want to clarify that I don't mean to imply that Chase's offer is unscrupulous, shady, or unfair. It's a nice offer that could help people in a couple different ways, just not me and not entirely as I envisioned when I read their offer.
Submitted February 06, 2019 at 07:07PM by Z-Rock http://bit.ly/2ROePos
