NPR logo

Most Big Credit Card Firms Raising Rates, Fees

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Most Big Credit Card Firms Raising Rates, Fees


Most Big Credit Card Firms Raising Rates, Fees

Most Big Credit Card Firms Raising Rates, Fees

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

Credit card interest rates and fees are increasing ahead of federal legislation, which go into effect in February 2010, that limits those fees. John Ulzheimer, of, says many most of the top 10 credit card issuers are changing the terms of many accounts to be more favorable to banks and less favorable to consumers.


It is not your imagination. Your credit card fees and interest rates are going up. Federal legislation limiting those fees doesn't go into effect until next February. So between now and then, banks and credit card companies are raising rates on a lot of customers.

John Ulzheimer is tracking the changes for, that's a consumer site, and he joins us from the studios of Georgia Public Broadcasting in Atlanta.

Now, I understand that Citi has raised rates on some cards as high as 30 percent. How many other banks are doing the same thing?

Mr. JOHN ULZHEIMER (President, Consumer Education, Citi is one of many credit card issuers who are changing their terms of a large portion of their cardholder accounts to be a little bit more favorable to the bank and less favorable to the consumer. We've seen this really across the board with most of the top 10 and top 15 credit card issuers. You know, the guys that everybody recognizes because they're the ones that, you know, we all have their cards in our wallet.

BRAND: Yeah, like Chase, Capital One, Discover.

Mr. ULZHEIMER: You got it: Chase, Capital One, Discover, Bank of America, and pretty much anybody that's a well-known credit card issuer is going through some sort of process where they're changing the terms of our accounts in such a way that makes it more expensive for us to have their cards.

BRAND: What else are they doing besides raising interest rates?

Mr. ULZHEIMER: It's the trifecta, is actually what we're calling it. It's the raising of the interest rates. It's the lowering of the credit limits, and it's the raising of the minimum payment requirements. And a lot of these things are happening in concert, which actually makes it difficult for some consumers to be able to make their payments on time. And in some cases, it's pushing them into default and having an adverse effect on their credit.

BRAND: So what is the explanation on the part of the companies?

Mr. ULZHEIMER: That's an interesting question. The explanation that we're getting back varies, depending on who we're talking to and what issuer we're talking to. We're hearing some issuers state that the economy is to blame for their changes. And we're hearing some issuers state that it's the new legislation that's coming down the road in February of 2010 that's causing them to make these changes proactively, when they're still allowed to do so pretty much for any reason.

We're also hearing from some issuers that are stating that their cardholder base is becoming more risky, and so that they're making these changes in order to compensate for the downside risk of many of their cardholders.

BRAND: Now, doesn't this kind of violate the spirit of the law, in that they're - the law says that these companies aren't allowed to raise rates exorbitantly? And they're going ahead and doing it before the law takes effect. I imagine some people on Capitol Hill aren't too happy about that.

Mr. ULZHEIMER: No, and the people on Capitol Hill certainly aren't happy. Consumers certainly aren't happy. And then the watchdog groups are also certainly not happy. But, you know, with all due respect, we all expected this to happen. There is this pocket of time between when the president signs the Card Act and when it becomes enforceable law, and that's a one-year period. And we knew that the credit card issuers were going to finish their proactive housekeeping before it actually became more difficult for them to do so.

So no one likes what they're doing, but it's certainly not illegal what they're doing. Is it immoral, unethical? I mean those are up for debate, certainly. And more consumers are finding themselves becoming the victim of some of these practices.

BRAND: So what can we, consumers, do in the face of all this? Is there a way to avoid these high rates?

Mr. ULZHEIMER: Absolutely. There are a variety of ways, and I'm going to give you a few examples. First, vote with your wallet; take your business elsewhere if you don't like how your credit card issuer is treating you. Second, maintain very, very strong credit reports and very, very strong credit scores and you find yourself somewhat immune to what's going on in the credit environment right now.

And last but certainly not least, be very, very selective about where you use your credit card. Be very conscientious of the fact that you issuer sees where you're shopping and sees the patterns that you're exhibiting. So avoid cash advances and avoid using your credit cards at what are referred to as questionable merchants, places like pawn shops, tire retreading stores, massage parlors, marriage counseling. Things like that are going to set off a red flag.

BRAND: And you don't have to stick with the big guys. You can go with the small banks or the credit unions.

Mr. ULZHEIMER: Absolutely. Credit unions are not doing these things to consumers. They didn't need a Card Act to teach them and mandate how they treat customers properly. There are over 10,000 credit card issuers in this country and we tend to focus just on the top 10 or 15. Take your business elsewhere if you don't like how you're being treated.

BRAND: John Ulzheimer is the president of Consumer Education at


Mr. ULZHEIMER: It was a pleasure.

Copyright © 2009 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.