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.

Why I Think JPMorgan Chase is a Bad Investment

JPMorgan Chase, the first major bank to report third-quarter earnings, stoked the market's optimism as it handily beat Wall Street's expectations, reporting a profit of $3.59 billion for the July-September period. The bank also achieved record year-to-date revenue.

Their earnings report helped boost the stock market and I'm sure their shareholders are pleased, but it didn't come as any surprise to me. In fact, I'd have been surprised if they hadn't had a good earnings report. You see I was one of the unfortunate people who became a credit card customer of Chase when they bought out Washington Mutual. I had two cards with Washington Mutual and had been a happy customer of theirs for years. Then Chase took over. Almost as soon as they took over, I received letters regarding both of my accounts, telling me my interest rates were being increased. So I got on the phone and talked to their customer service. I pointed out that I had never been late with a payment, always paid more than the minimum and questioned why my rates were being increased. It turns out that the rate increases had nothing to do with my credit rating, the reason they increased the interest rates was to increase the profitability on my accounts. O.K. Not something I wanted to hear, but I figured I would just pay the accounts off and wait until they came to their senses and offered me a reasonable interest rate, before I would use the cards again.

A few weeks later I get another notice in the mail telling me my rates are being increased to nearly 30%. That's when I decided to decline their offer and cancelled both of my cards. So, why do I think JPMorgan Chase is a bad investment.

First: Their customer service, in my opinion, is atrocious. They did not care that I had been a good customer with a proven payment record. They made no effort to keep me as a customer. They only cared about making more money off me. When you're running a business that relies on customer satisfaction and you carelessly disregard dissatisfied customers, your business is doomed to dwindle, if not fail altogether.

Secondly: While their profits are up now, I believe that it is largely a result of extreme rate increases to credit card customers like myself, who will eventually do like I've done and stop doing business with Chase bank entirely. I will NEVER do ANY business with this bank again! And I know a lot of other Chase customers who have had the same experience and feel the same way. So they are bound to see a dramatic drop in credit card business, which they may never be able to recover. With that in mind, it's my opinion that JPMorgan Chase would make a very poor long term investment.