Wells Fargo is hardly alone in treating credit card customers badly. Whenever I run a post on credit cards, I get a raft of comments and e-mails about various bank misdeeds, which generally involve rate increases when the borrower is current and has not suffered a fall in his credit score. The other common complaint is a cut in credit lines for no apparent reason (well, save that the banks are trying to please Wall Street).
But consumers are nevertheless, correctly, galled. Banks are getting massive subsidies via the TARP, super-low interest rates, and a host of rescue facilities. And what do they turn around and do? Gouge customers, typically the ones who already have balances and thus are least able to pay higher charges.
Wells is either clumsy or brazen enough to implement its rate changes so as to merit coverage in Bloomberg. Although I have received similar complaints about Chase, Bank of America, and Citigroup, they apparently put their increases through surgically enough so as to keep them largely out of the media.
Wells Fargo & Co. plans to raise interest rates on a majority of credit-card customers by 3 percentage points before federal rules limiting such increases take effect, a company executive said.
“This is something we’ve been contemplating for quite a period of time,” Kevin Rhein, group head of card services for the San Francisco-based bank, said today in a telephone interview. “We had just reached the point that we don’t think we can offer credit cards at the current pricing and keep credit flowing.”
Wells Fargo began advising customers this week that the change takes effect on Nov. 30. That’s a day before House Financial Services Committee Chairman Barney Frank wants curbs on rates and fees to become effective under the new U.S. credit- card law.
The story does note that most other card issuers put through increases much earlier.