Wednesday, April 14, 2010

J.P. MORGAN'S STRONG EARNINGS, AT WHAT COST?

J. P. Morgan posted surprisingly strong earnings, beating out most analyst's estimates. However, as a former credit card holder, I would have to question their business tactics, along with several other bank card issuers. I am a former customer because the interest on my credit card accounts soared to astronomical rates, even though my income and credit score remained basically the same. I also had a perfect credit record with both accounts, always paid over the minimum, never went over the limit and never made a late payment. None of this mattered to them apparently. Because when I called to inquire about the rate increase, they basically told me I could accept the increase or cancel my card. I cancelled both cards and will never do business with them again.

In all fairness, they are not the only card issuers to employ these type of tactics and I've eliminated most of my credit card accounts for that very reason. Kudos to Capital One and Juniper for showing some consideration for good customers! They are the only two companies whose credit cards I continue to carry.

So when I say "earnings at what cost", I'd like to point out that while these companies may increase earnings in the short term by gouging customers who are unable to pay off their cards and are forced to pay exorbitant interest rates, in the long term these same companies will hurt future earnings by losing business from some of their better customers. I sure wouldn't rush to invest any of my money in any of these businesses.

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