04/24/2009 - Michael Burkholder, who has had a Bank of America credit card for the better part of the last decade, said his jaw dropped recently when the interest rate on his card nearly tripled to 14.99% from 5.5%.
The 41-year-old Laurel, Md., resident insists that he always pays his bills on time and that while he typically carries a balance, he has made it a practice the last two decades to pay well over the minimum amount due on his accounts.
When he called to complain, a customer-service representative told him the bank would lower the new rate to 7.9% for six months and that he should call back at a later time for another decrease.
The Pew Charitable Trusts, in calling for a policy of Safe Credit Card Standards this week, said that 100% of cards allowed the issuer to get paid back in a manner which, according to the Federal Reserve, "is likely to cause substantial monetary damage to consumers," said Nick Bourke, a manager at the institution.
"These products can have dangerous qualities," Bourke said. "The costs can go up in unpredictable and nontransparent ways. Consumers are finding that they're paying hundreds or even thousands of dollars per year more than the upfront price tag would indicate."
Read the full article Credit-Card Shocks Anger More Borrowers on The Wall Street Journal's Web site.
Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on PewHealth.org.