It is being reported that credit card companies are badly mistreating their customers. Some of these companies are raising interest rates on good customers even if they pay down their balances every month on time.
The reason the companies give is that the customers’ credit rating have fallen in some manner. In addition, some credit card companies increase the interest rates on their cards after the cards are issued for no reason. They solicit customers, offering a low interest rate, and then increase the rate substantially after the cards are issued. There has have never been a good explanation for how the companies get away with that sort of thing.
Senator Carl Levin (D-MI), is sponsoring legislation that would, among other things, prohibit companies from increasing the rate on individuals who have paid their debt on time and in full.
Major credit card companies such as Citigroup and JPMorgan Chase & Co. now say they will discontinue the practice of raising a customer’s interest rate based solely on a credit report. Capital One claims its long-standing policy is not to change customers’ interest rates if their credit scores go down. But, as expected, congressional efforts to make all of them do it is running into strong opposition from the banking industry.