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If Your Credit Score Slips, Your Card Rate Could Go Up

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The Tampa Tribune

Published: December 5, 2007

Some credit card companies are raising interest rates on good customers even if they pay down their balances on time every month. The reason they cite is that the customer's credit rating has fallen elsewhere. A Senate Homeland Security and Governmental Affairs subcommittee hearing on credit card practices heard the testimony of people who had a nasty surprise when they thought they were paying down their balances, but it turned out they were only paying off interest. Major credit card companies such as Citigroup and JPMorgan Chase & Co. have said they will discontinue the practice of raising a customer's interest rate based solely on a change in their credit score. Capital One said its policy is not to change customers' interest rates if their credit scores go down.

Business, Page 3

•With Americans weighed down by some $900 billion in credit card debt, an average $2,200 per household, practices of the very profitable industry have been ripe for scrutiny by the Democratic-controlled Congress.

•The Federal Reserve is paying attention as well and planning to require credit-card issuers to give customers at least 45 days' notice before raising interest rates.

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