June 30 (Bloomberg) -- JPMorgan Chase & Co., the biggest U.S. credit-card issuer, plans to raise the minimum payment on balances to 5 percent for some customers, less than a month before new federal curbs begin to take hold.

The increase from 2 percent takes effect in August, the company said in a notice customers received this month. Customers who pay less than the minimum may be charged extra fees, the bank’s Web site says. New York-based JPMorgan has about 159 million cards in circulation, a regulatory filing shows, and spokeswoman Stephanie Jacobson said the new minimum applies to fewer than 1 percent of customers.

The change is in addition to JPMorgan’s balance-transfer fees, which will rise to 5 percent. Card issuers have said a law signed May 22 by President Barack Obama to restrict interest-rate increases and penalties will push up fees, curtail credit and restrict rewards. The law was aimed at practices that proponents said were unfair to consumers.

The new minimum affects “select accounts that have carried balances,” Jacobson said in an e-mail. “The way customers use and maintain an account helps us determine what changes to make in order to protect our customers and our company.”

The Credit Card Accountability Responsibility and Disclosure Act requires that consumers receive 45 days’ notice of “significant” contract changes, including rate increases. The law starts to take effect Aug. 20.

Citigroup Inc. raised rates on as many as 15 million credit card accounts it co-brands with Sears Holdings Corp., Macy’s Inc. and other retailers, the Financial Times reported, citing people close to the situation.

‘Most Challenged’

“We have adjusted pricing and card terms for some customers as part of our regular account reviews,” Samuel Wang, a Citigroup spokesman in New York, said in an e-mail. “These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit.”

JPMorgan confirmed this month its balance-transfer fee on credit cards will rise in August to 5 percent from 3 percent. The bank cited “new federal regulations” in a notice to cardholders.

JPMorgan Chief Executive Officer Jamie Dimon said May 27 the card business was the “most challenged” and new rules could cost the bank about $500 million. The unit lost $547 million in the first quarter.

The bank gave promotional, low-rate financing to “tens of millions of customers” in the last five years, according to Jacobson, and most repaid within 24 months. As for the rest, “our desire is to have these balances paid back in a reasonable period of time.”

Managing Risk

By making some customers pay a 5 percent monthly minimum, Chase is minimizing its risk, said Bill Hardekopf, CEO of LowCards.com, a Birmingham, Alabama research firm.

“Too many people got credit cards that should not have been approved for credit cards,” Hardekopf said today in an interview. “Chase is deeming those customers as high risk.”

The increased minimum may encourage customers to pay sooner, Hardekopf said. “In the long run, they will make less overall payments to the credit-card company,” he said.

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek2@bloomberg.net

Last Updated: June 30, 2009 23:46 EDT