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September 7, 2008 7:10:43 AM CDT

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Credit Card Execs Grilled Over Rate Hikes

Posted Dec 4, 07 6:55 PM CST in Politics,  Business 

(Newser) – Lawmakers grilled credit card execs today over the practice of hiking interest rates on customers who pay on time, the AP reports. Senator Carl Levin called it unfair, but Bank of America and Discovery execs said that factors like credit scores also affect rates. "It's important criteria for how to manage risk and pricing," said Discovery President Roger Hochschild.

Consumers also testified, including one who said her Discover rate almost tripled without adequate notice. Facing the threat of legislation, three of five major companies have agreed to a policy change; Discovery and BofA are still holding out. But Levin held his ground, saying rates must hold steady if "the cardholder holds up their end of the bargain."

Source Associated Press

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Bank of America Card Services President Bruce L. Hammonds, center, listens to testimony from consumers Bonnie Rushing of Naples, Fla., right, and Janet Hard of Freeland, Mich., left, on Capitol Hill in...   (Associated Press)
Senate Homeland Security and Governmental Affairs subcommittee Chairman Sen. Carl Levin, D-Mich, left, asks a question of credit card executives during a hearing on credit card practices and interest...   (Associated Press)
Discover Financial Services President and Chief Operating Officer Roger C. Hochschild, left, Bank of America Card Services President Bruce L. Hammonds, center, and Capitol One Financial Corporation President...   (Associated Press)
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Bank of America  • credit card  • Carl Levin  • Congressional hearings  • Discover


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