Friday, August 09, 2019

Chase Bank wipes out All Outstanding Debt Owed by its Canadian Customers

By IndraStra Global News Team

Chase Bank wipes out All Outstanding Debt Owed by its Canadian Customers

US-based Chase Bank is leaving Canada. And, it's forgiving all outstanding debt owed by customers of its two Canadian credit cards as it exits the country’s market. 

In March 2018, the bank, a part of global financial services firm JPMorgan Chase & Co, announced that it was closing its two Visa cards — Rewards Visa and the Marriott Rewards Premier Visa — and leaving the Canadian credit card market after 13 years.

According to Credit card rewards expert Patrick Sojka, "Chase likely concluded that debt forgiveness was ultimately cheaper than continuing to collect credit card payments in Canada." But he's stumped as to "why the bank didn't instead opt to sell the debt to a third-party debt collector, which would allow Chase to recoup some cash."

Also, according to Elena Jara, Director of Education at non-profit counseling agency Credit Canada,  bank’s swift exit may indicate it can write-off much of the outstanding debt and there is a possibility that the insurance company will cover the losses.

In particular, to this development Canada Revenue Agency (CRA) might look into the taxability factor of this windfall. But, if the cards were used for personal purchases rather than a business, then nothing to worry.

As per the latest research conducted by the Canadian Bankers Association (CBA), most Canadians — 58% — pay off their credit card balances every month. Of those who do not pay off their balances monthly, 47% pay more than the minimum payment and 15% pay it off entirely most months.