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Credit cards ramp up on rate hikes

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TEXT OF STORY

Scott Jagow: Here in the U.S., Fed Chairman Ben Bernanke has made it clear he may have to lower interest rates again to get banks lending and people spending. The only problem is that credit card companies are kind of working against that. They've launched a new wave of rate and fee hikes this holiday season. Here's Jill Barshay.


Jill Barshay: Many credit card customers have received notices this week that read more like "Bah Humbug" than "Happy Holidays." Some cards have boosted finance charges, cut the number days to pay your bill, and increased late fees.

Michelle Grabow: We saw American Express increase some of their rates significantly.

That's Michelle Grabow of Informa Research Services. She tracks credit card rates around the country. She says this is only the beginning.

Grabow: We're hearing international transaction fees could be going up.

Marc Sacher is managing director at Auriemma Consulting Group. He says banks are scratching their heads over how to make money from credit cards in these troubled times.

Marc Sacher: It's the fact that credit loss rates are so high these days. They need to find a way of offsetting those losses with increased revenue.

Sacher says banks are also under pressure from regulators to reduce their risks. That means banks may get stingier with your credit limit this holiday season.

In New York, I'm Jill Barshay for Marketplace.

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Rate hike is the latest assault on the already squeezed middle class consumers. Citizens Bank card increased my rate from 6.99 to 11.99%, effective on 12/1/08. At the sametime the banks enjoy the bailout and boosting the bottomline by sticking it to people like me, never late and always pay ontime. I already started using debits...

Here's the worst part though, who can we shout at. The evil done in the marketplace these days is done by faceless corporations that are all working from the same book. Individuals that reap the benefits hide behind the corporate vale. Because they never meet their prey, they sleep soundly. I ask again, who can we shout at to demand change.

Rita is EXACTLY right.

I never made the connection between credit card issuers and predatory lenders such as finance companies, cash-for-title loans and payday loans. It is now crystal clear that there is no difference.

The gimmick offers of low or no interest with cash-back offers entice consumers to enter into a very one-sided agreement. Then with each statement (or between statements) comes the tri-fold onion paper with 3 point font legaleze that tell how the rules have changed and they are going to put the screws to you.

Those people who have tried to pay medical bills or survive a job loss while relying on credit cards are then virtually unable to pay them off.

If there is any group who does not deserve a bailout, it is the malicious credit card companies. When I heard that Amex anted to be called a bank so it could dip into the public trough, I wanted to scream. Not only are the credit issuers merciless but their absence from the marketplace would not be felt by anyone.

Vultures...credit card companies and banks I HATE all of this crap. People are struggling as is ENOUGH already! RCA

STOP using credit cards! When will you pleople learn this trick. STOP feeding corporations, banks, etc. Look what happened with gas prices: people didn't use their cars so much anymore and VOILA the gas prices dropped. Pay cash.

I received a notice from Chevron/Texaco (GE Credit Bank)last week that my $2,000.credit limit was dropped to $100. I called the company. The rep said he was deluged with angry callers all day. I have paid my bill on time in full for 19 years. In reaction to this rude credit lowering, I cancelled the card.

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