Big bank credit cards are picking your pocket

Maybe you’ve heard: with the banks facing tough times, they’re hiking your credit card interest rates. Because of their mistakes, banks are making you pay.

Says the Detroit Free Press:

An estimated 4 million Bank of America customers were notified in the past week that their annual percentage rate will move up from less than 10% to a range of about 14% to 16%, according to Emily Peters, a credit card expert at Credit.com.

That sounds like pick-pocketing to us.

Tired of credit card rate hikes? Teaser promotions that fade? Impersonal credit card companies that make you wade through phone options before you talk to a human being?

We’re here to help.

The good news is that credit union credit cards are the safest bet.

Through our top secret research, we’ve found that those big bank credit cards are inferior products. We’ve done some snooping on the tactics of those big credit card issuers, and we want you to know what we know.  We don’t want this falling into the wrong hands, but feel free to spread the word to friends and family.

Also, be sure to participate in our research. We want to know your story. Have you been tricked? Paying too much each month? Unhappy with the service you receive somewhere else? Let us know.

We’re here to help.


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Consumer tells of CU fairness in card terms

April 18, 2008—A consumer testifying in a House subcommittee hearing yesterday on credit-card practices cited her credit union as the only financial services provider that has not attempted to impose so-called “risk-based” rate hikes on her card accounts.

Susan Wones, testifying Thursday before the House Financial Institutions Subcommittee chaired by Rep. Carolyn Maloney, D-N.Y., detailed her experience with a credit-card company that raised her card interest rate from zero percent to 23.24 percent because she went over the limit on her card one time.

She noted similar experiences with other card issuers and urged the panel to include in any credit-card legislation a requirement that issuers enforce limits on consumers’ credit cards. But she indicated that she has not seen this type of price adjustment with her credit union card, which carries an interest rate of 10 percent.

“My credit union posted my FICO score of 726 on my account, which I understand means my credit is good and there’s a low risk that I won’t pay my debts,” Wones testified. “The bank said in its letter of last week that they raised the rate on one of my cards because of the ‘risk level’ shown in my credit report. What is the reason for raising my interest rate if I am, according to my FICO score, such a good credit risk?”

The hearing was the second held in recent weeks by Maloney to examine H.R. 5244, the Credit Cardholders’ Bill of Rights. Her bill seeks to rein in abusive practices such as unilateral changes in terms and universal default.

The Federal Reserve’s Sandra Braunstein told the subcommittee that the Fed plans to issue proposed changes under the Unfair and Deceptive Practices Act this spring to help curb questionable credit card lending practices. She said the rule would finalized by year-end and will include revisions to credit card disclosures proposed last June under Regulation Z.


Courtesy NAFCU. Copyright 2008 NAFCU. All rights reserved.