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Renita Jablonski: The credit card arms of banks have been slashing credit limits, raising rates, even cutting people off. Bank of America is one of the latest examples. Tamara Keith has more.
Tamara Keith: Viranga Demel has had a great interest rate on his Bank of America card for years — below 10 percent. But he just got a letter saying that’s changing.
Viranga Demel: The standard rate for new and outstanding purchase balances is increasing.
His interest rate is going up to 14 percent. And he’s not alone.
Demel wonders why the bank would do something like this to good customers like him. He doesn’t even carry a balance.
Demel: But, oh well.
Spokesperson Betty Reiss says B of A is raising its lowest rates to match current market conditions.
Betty Reiss: You know, the bottom line is the cost to lend has significantly increased.
But some consumer groups aren’t buying it.
Curtis Arnold is the founder of Cardratings.com:
Curtis Arnold: And I think it’s just another reason for them to try to squeeze their cardholders, truth be told.
If customers want to reject the rate increase, Bank of America says they can, but then they can’t charge anything more and have to pay down the balance.
In Washington, I’m Tamara Keith for Marketplace.