'It's crazy': Chase Bank forgiving all debt owed by its Canadian credit card customers

Finally, a good-news story about credit card debt.

U.S.-based Chase Bank is forgiving all outstanding debt owed by users of its twoCanadian creditcards: the Amazon.ca Rewards Visaand the Marriott Rewards Premier Visa. The bank retired both cards last year and said it's wiping out cardholders' debtto complete its exit from the Canadian credit card market.

Affected customers can't believe their luck.

"I was sort of over the moon all last night, with a smile on my face," said Douglas Turnerof Coe Hill, Ont., after learning he's off the hook for the $6,157 still owing on his now-defunct Amazon Visa. "I couldn't believe it."

After 13 years in the Canadian market, Chase decidedto fold itstwoVisacards in March 2018.

The bank which is part ofglobal financial services firmJPMorgan Chase & Co. wouldn't say how many Canadians had signed up for the cards or how much debt was outstanding.

But itis likely that many cardholderswere still paying down their debt, including Turner.

Every month, he said he put$300 toward his big bill, racked up by making purchases on Amazon for items such as electronics and supplies for his six dogs.

When he receiveda letter from Chase this week, Turner expected bad news. "I'm thinking, 'OK, I missed a payment.'"

He instead learned that his sizeablecredit card debt had been obliterated,and that his latest $300 payment submitted after Chase made its debt-forgivenessdecision would be reimbursed.

"It's crazy," said Turner, a 55-year-old long-haul trucker. "This stuff doesn't happen with credit cards. Credit cards are horror stories."

Based on his monthly payments and the 19.9 per cent interest rate on his card, Turner estimates he's actually saving a total of more than $7,500.

"I'm glad that it was up there," he said about his bill.

'I consider myself lucky'

Turner's good news is shared with other Canadians also celebrating their sudden reversal of fortune.

Paul Adamson, of Dundalk, Ont., first learned something was afootlast week, when he tried to make a payment toward his Amazon Visa card and discovered his account had been closed.

"I called my bank a little frantic. I'm like, 'I don't want to miss a payment here,'" said the 44-year-old technical writer.

When Adamson learnedhe no longer had to make payments toward his outstanding $1,645 debt in Amazon purchases, he found himself in disbelief.

"I'm honestly still so flabbergasted about it," he said, notingthis is unusualbehaviour for a bank. "It's surprise fees, extra complicationsthings like that, definitely, but not loan forgiveness."

Christine Langlois, of Montreal, was also surprised by thenews, especially considering she stopped making regular payments on her Amazon Visa five years ago.

"It's kind of like I'm being rewarded for my irresponsibility," said the 24-year-old university student who's being forgiven a $1,300 debt.

Langlois got hercard when she was 18to use while travelling in the U.S., as usersweren't charged a fee for foreign currency transactions.

Asher debts piled up, Langloisstopped making regular monthlypaymentsand her credit rating took a hit.

"Every time I got a paycheque, it was like, 'OK, food or pay this credit card.'And it was just super stressful."

But now the stress has disappearedalong with hercredit card debt.

"I consider myself lucky," she said. "To have it just gone, it's sort of like,surreal."

Why did they do it?

Credit card rewards expertPatrick Sojka said Chase likely concluded that debt forgiveness was ultimately cheaper than continuing to collect credit card payments in Canada.

"They're still probably paying taxes, paying accountants,andfor them, they just probably worked it out and [said], 'Let's just forgive the debt and fully get out of the country.'"

But he's stumped as to why the bank didn't instead optto sell the debt to a third-party debt collector, which would allow Chase to recoup some cash.

"It is definitely a head-scratcher, for sure," saidSojka, the founder of Rewards Canada, a site that tracks reward programs.

Chase told CBC News it chose the debt-forgiveness routeso that everyone benefited.

"Ultimately, we felt it was a better decision for all parties, particularly our customers," spokesperson Maria Martinez said in an email.

Turner saidhe's still confused why thebank would care about former customers in a country where it no longer offers credit cardsbut he's not about to quibble with Chase's decision.

"I'm not going to complain."

To note: Following the publication of this story, some readers inquiredif the lucky recipients would have to pay income taxon the amount of debt they were forgiven.The short answer is, they shouldn't as long as they used their cards for personal purchases, saidJamieGolombek, managing director of tax and estate planning withCIBC.

"Think of it as a tax-free windfall," he wrotein an email to CBC News.

However, customers who used their cards to buy items for their business may have to pay up at tax time. That's because their debt forgiveness could be viewed as income by the Canada Revenue Agency, said Golombek.