Washington Mutual secured-card customers received bad news last week. Customers learned that the secured-card program, which was one of the better ones, is being discontinued. The program will officially be killed on January 12. The decision to kill the program was made by JPMorgan Chase, which acquired the beleaguered bank in September. A Washington Mutual source, who did not want to be identified, says that Chase had a problem converting the WaMu secured cards into Chase cards. In fact, Chase no longer offers a secured card, so it made the decision to ax the program an easy one. I’m told that without a secured card of its own, Chase would have had a problem servicing the WaMu accounts. What’s more, there are no plans to reintroduce a secured product in the future. WaMu customers will receive a refund check shortly after the secured-card program is discontinued — and once WaMu reconciles customer accounts. If there isn’t enough in the account to cover what customers owe — meaning that a refund is not owed by WaMu — customers will be responsible for making their accounts whole. Annual fees, meanwhile, will be refunded on a pro rata basis. Meanwhile, this secured-card move should give current WaMu credit-card customers pause. Two things immediately come to mind. Number one, the WaMu card portfolio, which includes a lot of Providian customers that were brought into the WaMu fold when WaMu acquired Providian in 2005, will be analyzed for credit quality. There can be little doubt that some of WaMu’s customers would not have made the cut if a Chase underwriter had been approving card applications for WaMu. Speculation is that Chase is going to let a large number of current WaMu customers fall away (run off). For people who used WaMu to rebuild their credit ratings and history, this will be bad news, especially given the current credit environment. The second thing, though it’s not nearly as bad as having your account closed, is that the free FICO scores that WaMu customers receive as part of their card membership may not survive the transition. That would suck. When FICO scores cost $15.95 a pop, it’s a nice perk indeed when a consumer can get a free FICO score each month (story link here). In October, The Wallet, a Wall Street Journal blog, quoted a Chase spokesperson who said that it was “too early” to comment about the specifics of the WaMu/Chase integration (story link here). For now, I am expecting the worst and hoping for the best. UPDATE: It’s Now Official: WaMu FICO Score Is Dead (story link).In the meantime, I hear that JPMorgan Chase’s acquisition of WaMu is going well. Indeed, all of WaMu’s business divisions could be fully branded as Chase by mid 2009. No idea, though, when JPMorgan Chase will fully integrate WaMu’s card operations. I’m thinking the longer it takes, the better it will be for current WaMu credit-card customers.Related Stories:WaMu Cardholders Won’t Be Orphaned: Can Convert And Combine Existing WaMu Cards With Chase In MarchIt’s Now Official: WaMu FICO Score Is DeadWaMu Card Customers: Conversion To Chase Credit Card Coming SoonJPMorgan Chase To Drop Secured Card Despite Favorable Trends
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