The Senate is reexamining some of the common practices of credit card issuers. One item that is being scrutinized is the credit card rate increases resulting from reviews of your credit report.
Credit card issuers cite the need to balance increased risk with higher interest. They check your credit regularly to look for signs of financial weakness. Did you know that your rate could increase even if you never missed a payment?
Although Chase and Citigroup have recently announced an end to universal default, other major card issuers still enforce it. There is a way out however.
If your rates have gone up, you have a right to protest the increase. In addition, you may freeze the rate at that level for as long as you continue to make your payments on time. The price is that you may have to give up the use of that card.
Bank of America spokesman Larry DiRita confirmed that customers have a right to reject rate increases. The same is true for most other major credit cards.
Tags: Senate debates credit card rate increases