13 WTHR - Indianapolis News |Consumers see hike in credit card rates

Consumers see hike in credit card rates

Mary Milz/Eyewitness News

Indianapolis - If you have credit cards, chances are good that the terms have changed. Many banks and credit card companies have raised interest rates, lowered credit limits and upped fees and penalties.

Beth Olson, looking for a bargain at a Broad Ripple resale boutique, said of the changes, "I'm not pleased with it, especially with holiday shopping and two kids who want everything under the sun from Santa Claus."

When Eyewitness News called Citibank to inquire about rates going up, a customer service representative said, "Across the board we're making certain changes to accounts."

When asked about cardholders who pay in full and on time, the representative said going from 14.99% to 18.99% wasn't so bad. "I've seen it up to 29.99% for certain clients."

Todd Roberson a Lecturer of Finance at IUPUI said, "I think trying to get those last punitive charges in while they can."

Roberson said flurry of rate hikes shouldn't come as a surprise. They kick in just before the new credit card law takes effect in February. That law limits interest rate hikes, provides more time to pay bills and requires payment amounts over the minimum be applied to high-interest rate balances.

"They're making sure they catch all the fees that exist and they're not cutting anyone any slack any more," Roberson said.

It's not just consumers who are getting hit with higher fees.

Liz Barden, who owns Big Hat Books in Broad Ripple, received word that the fee she pays to accept credit cards is going up, but she wasn't sure how much.

Reading from the letter she said, "The swipe fee is going up. The fee banks are paid? It's confusing, very confusing," she said. "They say it's going up but not significantly...they just keep getting you every way they can. It's a little distressing to think such a large chunk of an already small profit is sent to banks and credit card companies."

Olson said she still plans to use her credit cards, but cautiously.

"I try to be religious not running an ongoing bill with a credit card company because they make so much doing that and you're just throwing your money away," she said, adding that it doesn't make sense after working so hard to bag a bargain.