Shoppers find credit card rates skyrocketing

December 16, 2008 7:12:40 PM PST
Many consumers will be spending more this holiday season then they expect because their charge cards are charging them more.

Holiday shopping excursions are turning painful for some shoppers. It turns out their credit cards aren't what the consumer thought they were.

"I get my statement in the mail and instead of 8.9 percent it is showing it is 27 percent interest rate," said Dave MacLean from Walnut Creek.

MacLean paid off his bill and found a new credit card for his small business, but he wants to make noise, make waves, so it doesn't happen to you.

He called 7 On Your Side.

"I was looking for a place to complain about what i feel is credit card loan sharking," said MacLean.

"It is not an uncommon complaint these days. We are hearing from a lot of consumers who are finding themselves in this situation," said Michael McCauley from Consumers Union.

McCauley is with Consumers Union. His organization has been fighting for change in the credit card industry for years.

"We believe this practice is not fair. After all, the credit card industry is the only industry that is allowed to increase the price of a product after it has been purchased. We do not believe the credit card industry should be allowed to increase interest rates on money you already borrowed," said McCauley.

That's exactly what Melissa Thomas says happened to her.

"I looked at my credit card statement and I noticed they increased the APR from 9.9 percent to 28.4 percent," said Melissa Thomas from Oakland.

"Almost a 20 percent jump," said 7 On Your Side's Michael Finney.

"Yes," said Thomas.

So what can Melissa and Dave do? At this point complain to law makers, but that's about it.

"It is legal. Every credit card contract contains a clause that allows the company to change the contract provisions at any time for any reason," said McCauley.

Reliefe could be coming. On Thursday the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration are all expected to vote on new credit card rules.

The center piece a provision banning retroactive rate increases when consumers pay their bills on time.


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