Chase Forgiving All Credit Card Debt In Canada

Filed Under: Credit Cards

It’s not often we hear positive stories about credit card debt, but for the first time ever many of us will be wishing we had racked up credit card debt. 😉

I always say that you should only use credit cards if you’re in a situation where you can pay your balance in full every month. With few exceptions (like if you’re in an absolute bind, or if there’s a good 0% introductory interest rate), it’s not worth financing charges on credit cards. The interest you’ll pay will negate any rewards earned.

So that brings us to what seems like a totally unbelievable story. Chase is forgiving all credit card debt in Canada. You read that right.

What happened? Chase issued credit cards in Canada for 13 years, including both Amazon and Marriott co-branded cards. However, in March 2018 they decided to exit the Canadian credit card market, because I guess it got to the point where it just wasn’t worthwhile to them anymore.

Why would they stop seeking payment of debt, though? While they haven’t said officially, presumably it’s for similar reasons that they left the market to begin with — it just wasn’t worth collecting anymore. I assume there were significant costs associated with collecting the debt in a country in which they don’t otherwise operate.

We don’t know just how much debt they’re forgiving — are we talking millions, tens of millions, hundreds of millions, or what?

CBC has interviews with all kinds of people who were understandably in absolute shock when they got this message.

A 55 year old with $6,157 in debt said:

“I was sort of over the moon all last night, with a smile on my face. I couldn’t believe it. It’s crazy. This stuff doesn’t happen with credit cards. Credit cards are horror stories.”

Meanwhile a 24 year old who hadn’t made a payment towards her debt in five years said the following:

“It’s kind of like I’m being rewarded for my irresponsibility.”

I’m not sure there’s actually a moral to the story here. It’s certainly not to rack up credit card debt in hopes of it being forgiven. 😉 But it is the first feel-good story I’ve ever read about credit card debt, so there is that…

  1. In other words, a windfall for all those with outstanding debt, while those who need to accrue debt continue to pay higher borrowing costs due to the difficulty of collection in Canada.

    A company deciding it’s not worth the effort of extending credit to people isn’t a good thing for people who need credit.

  2. OMG

    Did Chase just drop a poison pill in Canada.

    “It’s kind of like I’m being rewarded for my irresponsibility.”
    Says it all.

    From now on default rate would increase in Canada for sure. You don’t just forgive loan without creating a moral hazard.

    Now if only Chase would do the same in USA 😉

  3. I had that Chase Marriott card with a $35,000 credit limit and dutifully paid it off before it was shut down.


  4. Eskimo – This won’t affect the default rate at all. You also can indeed forgive debt without “creating a moral Hazard”.

    You’d have a point if the government was paying it off, creating an impression that it will happen again. This doesn’t create that impression, so only a few financial-idiots will believe it does.

  5. Yeah, what a crazy story! I’m sure it makes sense for Chase to do it (otherwise they wouldn’t do it), but I’m still surprised they weren’t able to sell off the credit card debt to some type of company who would pay something like 25% of the value of the outstanding debts in the hopes of collecting 50%.

  6. This is bad news for us point collectors in Canada. It is already a limited market – e.g., no Hilton Amex cards or Chase Sapphire Preferred, or many other brands that exist elsewhere. The chances for new entrants go down with when big banks lose money so publicly in this market

  7. Yeah. I guess that’s better than personal responsibility. I mean, the evil credit card agency forced them to take that debt, right?
    The world is doomed.

  8. @Callum “You’d have a point if the government was paying it off, creating an impression that it will happen again.”

    Oh, you mean like student loan debt. THAT moral hazard.


  9. the radio ad: “dont let the credit card companies make you into thinking you have to pay all your credit debit”


  10. I hate the world. How did that girl go 5 years without paying on her card? Like, not even minimum payments???

  11. Over CAD$6000!! How. Is. This. Possible? I absolutely do not understand credit card debt at all. Where we come from, in Italy, you must pay your credit card debt in full every month and will only be issued a limited credit which is around 50% of your month salary. This is insane.

  12. @Callum

    I don’t know what kind of people you are referring to is a financial idiot. But I’m pretty sure people who over spend and owe credit card debts for over a year are potential candidates for your so called financial idiots. Hence the same group that got out of debt are the group that you say would believe it to happen again.

    People who are wise with their finances won’t be paying high interest credit card debts.

    So my conclusion still stands. It’s a poison pill for Canadians.

  13. Dam. I bet all those people that paid off their cards feel pretty cheated now.

    ‘Feel good’ isn’t really the word that comes to mine…..

  14. Chase figures it would cost them more to try to collect from delinquent accounts than it would to just let it go. There’s really no other reason.

  15. Eskimo – I’m referring to exactly the people I said – those who think this has a high chance of being repeated by other companies.

    Though your insistence that a fraction of one percent of Canadian debt being forgiven is a “poison pill” could quite possibly put you in that category too!

  16. I haven’t heard the fat lady sing yet, so don’t put your hopes to High!
    And the guy who hasn’t made a credit card payment in 5 years, your credit score should be -820.

  17. Like mentioned above, I am totally amazed that they didn’t (or couldn’t) sell off the debt to another bank or debt collecting agency.. But maybe that amount is still too large or the risk is too high.

  18. Let’s just wait and see if it happens. That just seems to good to be true and you may not be getting the whole picture. One thing to consider is that even if it wasn’t cost effective for Chase to collect the debt in Canada, they could have sold the debt to an outside collector for less than it’s full value and at least recovered something. Considering the extent of their greed, I would suggest a great deal of caution.

  19. I remember after the bank bailouts around 10 years ago, Chase redid our local office. Gorgeous new service areas. They have been empty for a decade. I love the colors and tellers.. and banking but the unused empty square feet. Thanks Obama for just part of ten trillion added to our national debt… but go. CHASE go.

  20. Look, there are only something like 300 people who live in the whole country, so it can’t have cost Chase that much, right?

  21. It just demonstrates the magnitude of profits in the banking industry – they couldn’t be bothered!

  22. Like mentioned above, I’m totally amazed that they didn’t could not sell off the debt another bank or debt collecting agency but maybe that amount is still too large or the risk is too high .

  23. This seems like BS. Would wouldn’t Chase sell the receivables to a collection agency for a few cents on the dollar?

  24. I wouldn’t call it a “feel good” story either. It does reward irresponsibility (as well as people using credit legitimately), and I can’t imagine it won’t impact the Canadian credit market in some negative ways. A big part of the story is that Chase is getting out of Canada altogether. Is that a good thing for consumers there?

  25. I love watching a bunch of people argue over something so stupid as this. Who cares what Chase did in Canada? Who cares how it “affects” them? So they forgave some debt…cool. Anyone who has internet post “fake outrage” is just jealous that the same didn’t happen to them. “Poison pills” and “morality issues”? Give me a break people. I’m on the toilet right now making fun of all of you. That’s what this conversation is worth, crappy toilet water! I hope I have wasted your time reading my post as all of you have wasted mine. Go find something else on the internet to be mad about. Just do it on your own time.

  26. Actually, believe it or not, it makes total sense to me. We live in a world with a monetary system where big, wealthy borrowers get themselves into trouble borrowing huge amounts of money at really cheap rates and then “renegotiate” in order to keep going, which is shorthand for “the lender ends up holding the bag.” This is how President Donald Trump made his billions, to cite just one example.

    Similarly, governments borrow huge amounts of money until they can’t get any more. Then they declare a crisis, default on it, and (if they have enough power) drop the hammer on the lenders. It’s how first world governments continue to get away with going deeply into debt, such as the U.S. being over $20 trillion in debt.

    It’s only a matter of time before people who aren’t uber-wealthy will demand the same sort of special treatment for themselves, and they’ll eventually get it.

    All of this happens because of expansionary money supplies. It’s an inevitable consequence.

  27. To those questioning why not sell the debt to a receivables company… The debt collection infrastructure is likely not the same in Canada as it is here in the US (where it is highly profitable and for the most part, predatory.) And as the original creditor, Chase would not be totally off the hook in the case of legal matters, which in turn creates ongoing financial obligation on their part. They’ve likely determined the pennies on the dollar they would receive are not worth this. Easier and cleaner to just write the whole thing off.

  28. Interestingly, at least in the US this could actually create serious problems for the consumers in question since under US law, debts forgiven without being involved in a bankruptcy create income. Now, for someone who was chugging along and paying down $2000 in CC debt that wouldn’t be an issue, but for some poor schmuck who just had $40-50k forgiven across several accounts that could create a heck of a taxable event (to the tune of $10-15k) as it all lands at once.

    To be fair, I have to wonder why they didn’t just decide to not enforce unpaid debts and let them lapse (as opposed to forgiving them outright) since I suspect there *were* people still paying off accounts here, but I’m guessing that they might have gotten that pile of accounts to be small enough that it wasn’t even worth that.

  29. This is not a feel good or positive story. Can’t you just report the facts without injecting your feelings on the matter?

  30. @Mrs Batman: this is a blog, not a newswire. The whole concept is to hear the blogger’s opinion.

  31. Canadian money laws are a little different. Chase was caught with credit card fraud. They were not lending money, they were lending credit, your credit. Instead of fighting it in court and get stuck paying billions for doing the fraud, Chase decided to simply walk away from it all. Every single Canadian Chase card holder has the right to seek justice for the fraud perpetuated on them. Chase simply does not wish to take every card holder on. Legal fees would be a lot higher then most balances.

    Also the debt collection infrastructure is not the same in Canada as it is here in the US where it is highly profitable and predatory. Chase is not off the hook in the case of legal matters, which in turn creates ongoing financial obligation on their part. They have determined that this will go against them so it is easier and cleaner to just write the whole thing off.

    Finally someone actually did something by going against Chase on credit card fraud. Your credit is not money as in currency…….!

  32. @callum

    I guess you are the dumb idiot who make stuff up and thinks it is a fact. Chase doesn’t even release how much was forgiven or to how many, how did you even come up with your fraction of one percent of Canadian debt.

    It’s people with wrong education like you who mess up the country and put people like AOC in the wrong place. Stop making stuff up and call it fact.

  33. I was going to say the same thing as Gray: in the US, at least, debt that is forgiven is considered income and therefore taxed. Dunno if Canada does the same, but if so, this could actually be the opposite of a windfall…

  34. not the first time irresponsible behavior is being rewarded.

    so many people come in illegally to the US and their cases are given more importance and higher priority than those who come legally and have to wait for their turns patiently. Even politicians on all sides of the isle give them more importance than the 1000’s who come to study and work on proper visas and wish to stay in the US.

    Now before it turns it in to an immigration debate… that is not the point of this post. It is just to show that more often that not, irresponsible behavior leads to better outcomes than following the law by the book.

  35. @ Chris – do you have a source for your claims that Chase committed large scale credit fraud in Canada? I did a quick search, but the first 7-8 pages of the search did not turn up anything like what you mention.

  36. @Eskimo – Interesting, you demand facts from others despite proving absolutely none yourself.

    Canada has $2.2 trillion dollars in private debt. If you think that Chase has written off more than $22bn dollars then I’d question your financial literacy… Though your moronic AOC reference makes it perfectly clear that you haven’t bothered to look into this at all and know very little about it – you’ve instead decided to just create your own reality to match your political beliefs.

  37. I was just happy for their good fortune. I don’t see how their good fortune makes my life any less profitable or enjoyable. Who says the recipients of the debt forgiveness are necessarily irresponsible anyway? Making small payments over time, paying interest while doing so, is sometimes necessary for people of lower incomes–or anyone who encounters bad fortune. There is no reason to conclude that most of those whose debt was forgiven weren’t making on time payments. Just be happy for them. Life is much more fulfilling if you can enjoy others’ good fortune.

  38. Wow the amount of hate here is crazy – most of you don’t even bother to try and understand what happened here.

    The vast majority of forgiven debt was not ‘delinquent’, it was simple people who were paying the min payment each month or just paying it off slower. There are a few delinquents yes (they exist in every country), but the vast majority is just people like most people on here, who carry some balance from month to month and are playing by the rules. Very very few got ‘rewarded’ for being irresponsible.

    People who made min payment after that decision was made were being refunded..

    As far as why they didn’t sell the debt – because they couldn’t – it’s not a debt legally speaking. The only thing they could have done is sell the credit card itself along with the credit card customers – which would mean they would sell customers who are not great at paying off their cc every month, but are playing by the rules the company itself created – so legally, that isn’t a deb’t, the only debt is the min payment.

    The bean counters at Chase figured out that they are better to take a write-down loss than to sell the business itself for pennies on the dollar.

    So some people got rewarded – good for them! If you are one of them, please go and do something good for some random person today, and if you’re not, try and not hate them for being responsible adults.

    And don’t freak out that for a change the little guy won!

  39. Chase will just pass the bill on to the Rich Americans,

    Profit is the only way we stay in business.

    All CC Debt is someone spending to flash, live responsively.

  40. @Arie
    I wouldn’t say only the delinquent are irresponsible. Paying the minimum is irresponsible too (maybe not to the creditors but to yourself). The rest of your statement is spot on.


    I want to end our little conversation with some closing remarks, I have no interest in wasting time with AOC level debates.

    I never throw in any numbers or percentage nor do I intend to make numbers up to justify myself. It’s just my own opinions.
    And if your dim wit thinks the 2.2 trillion (again not verified, but who cares I’ll play along) private debt is only credit card debts then you should question your own financial literacy and stop wasting time, this isn’t a constructive debate at all.

  41. Eskimo – I don’t think it’s credit card debt, nor have I ever said it is. Learn to read you complete and utter moron…

  42. Chase did sell off some of their cards. Some were picked up by Scotia Bank I believe.

    This is terrible news for points collectors in Canada. AMEX is a waste as they only have two cards that are worth having and the Canadian partners for the Gold Rewards are Air Canada and BA at 1:1 and Asia Miles and some other one at 1:.75 (loss) (I’m too lazy to look them up as they are losers). I sure wish they had other partners such as SQ Chris Flyer – then I would be doing handstands down the aisles.

    So by not recovering their debt and by letting bad credit risks be rewarded it certainly taints the Canadian CC market.

    God I wish we could get the Aspire card!

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