Man with perfect credit has interest hike

March 19, 2009 7:15:31 PM PDT
Many people are complaining about huge interest rate hikes on their credit cards. One family with a perfect payment history saw their interest double overnight.

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The Perez family is like lots of families these days, Paul and Jen live by a strict budget, both hold full-time jobs and little Isa helps out in her little kitchen.

Paul says they make sure to pay bills on time and never go over their credit limits. That's why he was shocked when he saw his last WaMu-Chase credit card bill.

"Opened up my bill looking at my APR suddenly it went up from 9.9 percent to 17.9 percent. I was like, why?" said Perez.

Paul opened the account at Washington Mutual Bank in 2006 expecting the rate to stay at 9.9 percent, so he called the bank.

"Hey is there any way we can work something out because I do have this outstanding debt," said

"They came with the same response every time, which is, no sorry we can't do anything for you," said Perez.

His finance charges rose from $69 per month to $99, so it's become harder to pay down a $7,000 debt.

"It won't make me homeless, but it's something that definitely impacts my, my money," said Perez. "Do I want to go out now and go to the mall and spend money on lunch with my daughter, or something like that, or other activities and things like that of course I'm going to think about it."

7 On Your Side has received several complaints from consumers whose Washington Mutual credit card rates rose after WaMu merged with JP Morgan-Chase.

We contacted the bank and it said: "We must constantly evaluate the risks and costs of funding credit card loans. When necessary, we make changes to pricing, terms or credit lines based on borrower risk, market conditions, and the costs to us of making loans. We recognize that some of these decisions can have an impact on some customers, including the former WaMu customers who are transitioning to Chase this month. We try to minimize the negative impact and, where possible, provide alternatives."

The bank says it did offer customers the chance to close their accounts and pay off debt at the lower interest rates.

But Paul says he never received that offer. .

"And now they're jacking it up. And I'm like, well what is that?" said Perez.

However, after we brought those concerns to the bank, WaMu chase did review Paul's account. Soon after, he was surprised to receive this letter from chase, saying: it was "in response to your concerns addressed to Channel 7 KGO TV."

"7 On Your Side contacted Washington Mutual and apparently that set off all the bells and whistles," said Perez.

The bank set Paul's interest rate at 14.99 percent, refunded $326, which is three months worth of finance charges and gave him an extra $500 "as a gesture of our commitment to you."

"I'm very happy and pleased that 7 On Your Side was able to help me out," said Perez.

So many consumers are complaining about rising credit card rates, the banks launched a website that's supposed to help you get a better deal.

Related link:

  • www.helpwithmycredit.org

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