Credit Cards Scramble to Jack Up Interest Rates

Image by Wikimedia Commons user <a href="http://commons.wikimedia.org/wiki/File:Credit-cards.jpg">Lotus Head</a> used under a CC License

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If you haven’t been paying attention to your credit cards’ interest rates, this is a good time to start. Bloomberg reports today that Wells Fargo is jacking up its cards’ APRs by three points on November 30—which just happens to be one day before Rep. Barney Frank (D-Mass.) wants new protections for credit-card holders to kick in. Wells says it’s just a big coincdence, but other card issuers including Chase, American Express, and Discover have also been bumping their rates and fees since Congress passed the Credit Card Accountability Responsibility and Disclosure Act in May. Some consumers are reporting rate hikes of more than 100 percent. So what’s a cardholder to do in the face of this last-minute fit of money grubbing?

Under the new law, credit card issuers won’t be able to increase your interest rate unless your payments are more than 60 days late, and if you then pay on time for six months, the original rate must go back into effect. That part of the law is supposed to kick in in February 2010—or December 1 if Frank prevails. But in the meantime, the law already gives you the right to tell your bank to take its higher interest rates and shove ’em. It’s not a perfect solution—the higher rates can still apply to new balances and you might get your card cancelled—but it may be a lot more satisfying than having to suck up those extra percentage points in silence.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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