With Black Friday just a few days away, this seemed
particularly current. Many people with credit cards
probably have received a letter in recent weeks or months
about their interest rates going up. I have received
two such letters, both from Citibank, concerning my credit
cards from Zales and a furniture store.
For those who
don't know what is going on, Congress passed a law in the
spring that places much greater restrictions on what credit
card companies can do to consumers and how they can raise
interest rates. This law goes into effect in February
and credit card companies and raising rates ahead of the
law. The House of Representatives caught on to this
and passed a bill to move up the effective date to December
1st. Unfortunately the Senate has been unable to pass
a similar bill and consumers will continue to find their
rates increased from now until February.
The banking
industry is responding by saying that the increase in
interest rates is due to an increased risk in lending.
This sounds like a good excuse until it's compared to
reality. Both accounts that I had were never late and
both have been active this year. I have excellent
credit. And still my rate for both accounts was raised
to 27.99%. This is beyond ridiculous and is even more
insulting when I think that Citibank was one of the biggest
banks bailed out by your taxes and mine.
On top of
cancelling my credit card with Zales, I sent them a letter
telling them that I would no longer be purchasing from their
store because of how I was treated by their financier,
Citibank. Big banks aren't going to care if they lose
a few customers like you or I over increased interest rates.
But if the companies that they provide credit for realize
they are losing business because of absurd interest rates
and do their banking elsewhere, maybe these banks will
finally get the idea.
If you find your interest rate
increased on your credit card between now and February, I
encourage you to not only cancel the credit card, but
contact the company who issued it and let them know that you
intend to take your business elsewhere because of they way
you were treated by their financier.
