How to Opt Out of Chase’s Binding Arbitration Clause (with template letter!)

Did you hear the news that Chase has added a forced arbitration clause to some of their credit cards?

I first read about it in a Fast Company article by Cale Weissman and the first group to get this notification were Chase Slate credit card holders:

According to Chase, the new agreement includes a new section entitled “Binding Arbitration.” The section goes as follows:

This arbitration agreement provides that all disputes between you and Chase must be resolved by BINDING ARBITRATION whenever you or we choose to submit or refer a dispute to arbitration. By accepting this arbitration agreement you GIVE UP YOUR RIGHT TO GO TO COURT (except for matters that may be taken to a small claims court). Arbitration will proceed on an INDIVIDUAL BASIS, so class actions and similar proceedings will NOT be available to you.

Yikes.

According to the New York Times, it's not just the Slate card but it also includes others like the entire line of Sapphire cards. According to a spokesperson, it'll basically include all Chase cards except for military and AARP cardholders.

What is Binding Arbitration?

If you have a dispute with another person or a company and you can't work it out yourselves, sometimes your only recourse is in court. Binding arbitration is a step below the legal system and is usually faster, cheaper, less time consuming, and less formal. Both sides agree to submit their dispute to an arbitrator who will make a final and binding decision.

Companies like arbitration because it's faster and cheaper. According to a report by Pew Charitable Trusts, 72% of banks use a clause like this. J.P. Morgan Chase is hardly alone.

Consumers don't like it because you give up the right to go to court, unless it's small claims court. While it's very rare that you'd ever need to sue your credit card company, it's also very rare that a bank would open bank accounts without the knowledge of its customers. So never say never.

How to Opt Out of Chase's Binding Arbitration

It turns out that you can opt out of this clause by mail before August 7th, 2019.

Mail a letter stating “that you reject this agreement to arbitrate and include your name, account number, address and personal signature.”

Here's a template letter you can use. It's courtesy of Sara, who appears to be affiliated with Berkeley Law in some capacity if Twitter bios are to be believed, but the template checks all the boxes.

Mail it to:
Chase
P.O. Box 15298
Wilmington, DE 19850-5298

Is This Necessary?

Personally, I don't see binding arbitration as this “end of the world” horrible thing. If you can opt out, it seems benign.

Forcing it as a requirement to use the card would seem a bit heavy handed but that doesn't appear to be the case here. You can opt out of the clause and keep the card. Plus, Chase is hardly alone in doing this and it appears more like an industry practice than anything else.

That said, you never know what will happen in the future and if all it takes is a simple letter, I think it's important to get the clause removed from your agreement.

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Empower Personal Dashboard, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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CarolynB
4 years ago

I read a story yesterday that Chase could force $150 fee instead of $95 on 100,000 customers. They would make $15,000,000. If you can’t have a class action lawsuit-which is what this is all about. I have also read that if you “opt out” they will take your points and shut you down.

A Journey to FI
4 years ago

Hey Jim, thanks for this information and for facilitating the template. I know you mentioned this but could you speculate as to why Chase decided to do this (even though others might have been doing it already) and impact to cardholders, more specifically, travel hackers in terms of chances they will use the rejection letter to reserve the right to grant credit card applications in the future. Thanks.

Carl
4 years ago

B4 sending opt out form” possably get notarized copy and sending by return receipt so if there’s a discrepancy & you end up going the distanced your coverd in multiple direction’s i would think.
Ps.if this was helpful plz let me know.
Thanks

ADG
4 years ago

Well Jim Wang, this is the 3rd page on the web about Chase Arbitration Opt OUT notice which you all are posting the WRONG info about the DATES, as I see nothing about 8/9/2019 or 8/10/2019 and other dates these people have posted as NEWS. I have two notices sent from CHASE sitting in front of me, right here. And it seems everyone who has made a post on the web about this, including you, are INCORRECT by posting the wrong DATES on the web. Chase has sent me two notices, on the same day, for Disney Rewards and about… Read more »

Reader of online agreements
4 years ago

Are you sure this is current news? I went to my account online and opened the terms of service, “Last updated on 08/21/2016” and binding arbitration is already in effect. Pasted below (their all caps, not mine): 12. Binding ArbitrationYOU HEREBY AGREE THAT ANY DISPUTE, CLAIM OR CONTROVERSY ARISING NOW ORIN THE FUTURE UNDER OR RELATING IN ANY WAY TO THIS AGREEMENT, OR TO THEONLINE SERVICE (“CLAIM”), REGARDLESS OF THE NATURE OF THE CAUSE(S) OFACTION ASSERTED (INCLUDING CLAIMS FOR INJUNCTIVE, DECLARATORY, OREQUITABLE RELIEF), SHALL BE RESOLVED BY BINDING ARBITRATION. CLAIMSSUBJECT TO ARBITRATION INCLUDE CLAIMS THAT ARE MADE AS COUNTERCLAIMS,CROSS CLAIMS,… Read more »

Mat
3 years ago

I read a story yesterday that Chase could force $150 fee instead of $95 on 100,000 customers. They would make $15,000,000. If you can’t have a class action lawsuit-which is what this is all about. I have also read that if you “opt out” they will take your points and shut you down.

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