Beverly Baskin, the president and CEO of the Better Business Bureau of Eastern NC, is fired up.
She recently received a letter from American Express (she's been a card member since 1986).
"Arbitrarily they informed me that my rates were going to increase from a very reasonable rate to 15.24 percent," she explained "and of course I'm not happy with that."
Baskin is not alone. Her Raleigh office, the NC attorney general's office and the U.S. Office of the Comptroller of the Currency in Washington D.C. are all getting complaints.Most of the complaints coming in to Raleigh are against American Express and Bank of America.
USA Today recently reported reasons other than high interest rates for complaints.
Fifth Third Bank is charging a $19 fee if you don't use your card in 12 months. Discover is charging a 2 percent fee on purchases made out of the country.
Chase introduced a $30 annual fee on its freedom credit card for certain holders. And if you pay late, Citigroup will charge a reinstatement fee, which affects reward points.
Why is this happening?
Some believe it is happening in order to offset new laws passed in May.
"We're seeing all sorts of examples of the way that some of these banks and credit card companies are doing everything they can to scramble to get all the money they can before the new laws go into effect," Baskin explained.
Baskin offers the following suggestions for consumers:Opt Out
- That means you pay off the balance, the account closes and you can't use it anymore. However, doing that could be bad for your credit score. You must also give the company 30 days notice if you want to opt out.
- Make sure when transfer to another card; you are getting a lower interest rate on the transfer as well as on new purchases.
- If you can't pay it off completely, pay off as much as you can so it won't hurt as much when the new rate kicks in. Your cardholder has to give you 45 days notice about rate changes, so you have some times to make a decision.
Baskin said the situation is ironic, since the new laws were intended to restrict rate increases and protect college students.
"The laws were enacted to protect consumers from the very thing we're seeing happening right now," she explained. "There is an irony in that and I don't have an answer for it."
For a complete list of tips from the Better Business Bureau, visit BBB.org