Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
IWSJI Banks card fee hike prompts move to CU
NEW YORK (4/10/09)--Tamara Smith of Burlington, Vt., told The Wall Street Journal Thursday she is opening a new credit card account with a credit union instead of a bank to protect herself from banks’ pursuit of higher interest income. Smith reacted to a Bank of America notice that her 7.9% interest rate would increase to nearly 13% by calling the bank to opt out of the change. That allows her to retain the 7.9% rate, but prevents her from using the card for new purchases, which would trigger the higher rate on her full balance of approximately $2,000. Bank of America recently announced plans to raise interest rates to double-digit levels for credit-card customers who carry a balance every month instead of paying off the card in full. The bank attributed the move to higher costs for offering credit,. Citigroup Inc., J.P. Morgan Chase & Co. and American Express Co. already have implemented similar policies, which typically allow cardholders to opt out of higher rates by ceasing to use the card or closing the account. Financial educators encourage consumers who face increases to pay down balances, but warn against closing accounts because it can negatively impact credit scores, said The Journal. Banks are increasing rates now to avoid new regulatory limits on credit-card increases that take effect in July 2010. Congress is pondering bills containing stronger restrictions with a shorter timeline. Banks have protested those proposals, claiming tighter rules would force them to restrict access to credit and promotional rates.
Other Resources

RSS





print
News Now LiveWire
At @FTC request, court halts operations of an alleged debt-relief scammer calling itself “FTC Credit Solutions.” http://t.co/qMsDBmKExH
2 hours ago
.@daytondailynews : The secret is out about #creditunions http://t.co/Aqu3pFTROV @DayAirCU @CODECreditUnion
2 hours ago
.@CUNA's @Nussle on @SenatorReid :(2of2)On behalf of more than 102M #CU members,I thank him 4 his leadership over the yrs/wish him the best.
4 hours ago
.@CUNA CEO Nussle on Sen. Reid’s decision not 2 seek re-election (1of2): Sen. Reid has a long history of #CU support throughout his career.
5 hours ago
#Jobless claims duck under 300K for 3rd straight week #Market #Economy http://t.co/jOsZWf9HNJ
5 hours ago