Senate highlights unfair credit card rate hikes

Contact: Linda Sherry, Consumer Action, 202-544-3088

Today the Senate Permanent Subcommittee on Investigations held a hearing, "Credit Card Practices: Unfair Interest Rate Increases" to examine the circumstances under which credit card issuers may increase the interest rates of cardholders who are in compliance with the terms of their credit cards. The hearing is a followup to the Subcommittee’s March 2007 hearing, which examined practices related to credit card grace periods, interest charges assessed against debt that was paid on time, and excessive fees. Witnesses included a panel of cardholders who experienced interest rate increases, as well as representatives from three credit card companies, Capital One, Bank of America and Discover. Linda Sherry of Consumer Action commented, "We are heartened that the august Senate Permanent Subcommittee on Investigations led by Senator Carl Levin (D-MI) has been able to show that even cardholders who follow the terms and conditions set forth by their credit card company are subject to anti-consumer practices. This is a potent rebuttal to the industry's oft-heard defense that it is only protecting itself and its prime customers from having to bear the risk of cardholders who don't follow the rules!" The Senate has released eight case histories that are the result of a bipartisan investigation into unfair credit card practices. These histories detail the experiences of individual consumers who paid their credit card bills in compliance with the terms set by their credit card issuers, but whose interest rates were nevertheless increased. Each case history includes a brief description of the cardholder and circumstances surrounding the interest rate increase, as well as a chart with specific data related to their credit card account. Click here to download a PDF document outlining the case histories prepared by the Senate Permanent Subcommittee on Investigations. Consumer Action urges invididuals write to their Congressional lawmakers today to call for credit card reform, and to urge their Senators to pass Senator Levin's bill to protect consumers from some of the worst industry abuses. Click here to go to Consumer Action's Take Action and send a message. More than 18,000 people have taken this step in the past 14 months.

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