Effective August 2009, many Chase credit cardholders will see their monthly minimum payment more than doubled. Chase recently made the announcement via mail that minimum payments would increase from 2% to 5% of the current balance. That means if your current minimum payment is $250, your new payment would be $625.
It seems that the minimum payment increase is targeted at cardholders with low interest rate balance transfers. Chase couldn't raise interest rates on these balances because it previously promised cardholders low rates for the life of their loans. So Chase found another way to make money off these cardholders, in the short run at least. Assuming customers were actually able to afford the payment increase, Chase would only have an increased cashflow for the few years or so until these balance transfers are repaid. In the end, they lose out on a lot of interest that would have been paid under the lower minimum payment.
Even though a higher minimum payment hurts initially and takes some getting used to, it's better in the long run because you're able to pay off your debt quicker and end up paying less interest. Still, I think it's unfair that Chase hiked minimum payments with such short notice at a time when consumers are struggling to make ends meet. Unable to make the increased payment, I suspect many cardholders will be forced into default and worse, bankruptcy.
Though other credit card companies have yet to make this kind of change to minimum payments, I wouldn't be surprised if similar announcements came soon. The best option is to pay off your credit card balances as soon as possible. That way, you're not susceptible to changing credit card terms.
If at all possible, don't just let the credit card go into default. See What to Do About a Minimum Payment Increase for ways you can come up with the minimum payment.
"Chase Greed" (comment # 5) has the right idea. Complain to the FTC about Chase's unfair practice. If the FTC gets enough complaints they will launch an investigation and possibly force Chase to reduce their minimum payment. To file a complaint online go to https://www.ftccomplaintassistant.gov.
Update: Some Chase customers (commenting below) have been able to retain a 2% minimum payment by contacting Chase's Proactive Solutions department (1-800-404-6220). The credit card balance gets converted to a 60-month fixed rate loan with a 2% minimum payment. The catch is that your credit card will be closed, a move that could hurt your credit score.
The Proactive Solutions department will probably ask for some income and debt information to qualify you for the new loan. After being accepted, you'll receive confirmation of the new loan within two weeks. Readers complain that managers aren't forthcoming about this loan alternative and suspicious about the legitimacy of the new loan. But, some commenters, like Matt #109 and tfab #112, have reported success.