Bailed-out banks jacking up rates

Joel Rector, North Las Vegas

Sunday, April 12, 2009 | 2:04 a.m.

Now that most of the biggest U.S. banks have been bailed out, thanks to taxpayer intervention, they’ve found an innovative way of saying “thank you” to those who helped keep them afloat — raising credit card interest rates.

Many, such as JP Morgan Chase and Bank of America, have recently sent notices informing customers that they are arbitrarily raising credit card interest rates. In my case, rates went from 5.99 percent to 18.99 percent. I have never missed a payment. These rates used to be reserved as a punitive measure for chronically delinquent card holders.

When I called customer service to find out why, the representative told me the original agreement allowed for periodic rate increases, but never gave a reason for this increase. The increase affects both new purchases and existing balances.

The banks provide an option to freeze the current interest rate in exchange for permanently canceling the credit card. There is no opportunity for negotiation and one’s credit history has no bearing on the bank’s decision.

Our state and federal representatives should review these recent bank actions and create legislation that requires, at the very least, a cap on interest rate increases.

Given the taxpayer bailout funding, today’s economic situation and the resulting stress average citizens find themselves under, this type of behavior by banks is irresponsible, bordering on criminal.