If you have a credit card, you might be getting a letter in the mail with some bad news: your credit card company is jacking up your interest rate.
Never mind if you've been an excellent customer, whose always paid your bills on time. Some of the biggest credit card companies, including Capital One, Citibank, and HSBC, are now raising rates on millions of customers.
They're blaming the bad economy for the rate hikes. But wait: there might be a way you can get the rate increase reversed on your account.
Listen to the case of Stacey K (who asked us not to use her full name for privacy reasons). She had a Capital One VISA for 15 years and told us she can't remember ever missing a payment. She got a notice from Capital One in late February that her rate was being raised from 7.9% to 17.9% on purchases, and to a whopping 24.9% on cash advances.
The notice said if she wouldn't agree to the rate hike, they would close her account in May. She was angry that they'd do this to a customer who says she has a spotless credit history.
So I got on the phone with Stacey, and together we called the toll-free customer service number of the back of her card, to get some answers. The Capital One rep said the company was raising the rates on most of its 37 million credit cards because of current "economic conditions." She told us it didn't matter how reliable those customers had been.
I asked the rep if there was anything Stacey could do to avoid getting her interest rate raised. "Nothing," the rep told me over and over. Being a pushy investigative reporter, I pressed her repeatedly, asking her if there was any way Stacey could appeal the rate hike. Finally, two minutes later, the representative agreed to review Stacey's account history, and suddenly, she said that the customer did in fact qualify for a special "offer," that would keep her interest rate at 7.9% for at least ten more months.
Local
Get Los Angeles's latest local news on crime, entertainment, weather, schools, COVID, cost of living and more. Here's your go-to source for today's LA news.
So why did Capital One offer Stacey this reprieve from getting smacked with a higher rate? Cap One's PR person, Pam Girardo, told me "decisions to modify terms are made on a case by case basis depending on the individual customer's circumstances." Translated into laymen's terms, you can fight back with your lender if you're a customer in good standing, and possibly negotiate a better rate.
Finally, you might wonder why the credit card companies are rushing to raise your rates? The Federal Reserve recently adopted a rule that will make it a lot harder for banks to raise credit card rates. But, that rule doesn't go into effect until the summer of 2010. So remember, if your rates get jacked up now, you can fight back!
Do you have a story for us to investigate? email Joel at: Joel.Grover@nbcuni.com
Click here to check out more NBC Los Angeles investigative reports.
