Credit Card vs. Consumer

Unlike last time on Capitol Hill, when the consumers were uninvited to speak minutes before the congressional hearing began, Thursday's credit card hearing featured three cardholders who said their providers had treated them unfairly.

The hearing examined New York Democrat Rep. Carolyn Maloney's proposed cardholder bill of rights, which industry groups have criticized as overly restrictive.

One of the consumers, Susan Wones of Denver, said she thought such restrictions were necessary given the way that her card provider, Chase, raised her interest rates. One of her Chase credit cards jumped from a 14.9 to 25 percent interest rate after she got close to, but didn't exceed, her $6,000 credit limit. She said the interest rate on a second Chase card similarly shot up after she went $15 over her credit limit in the middle of a billing cycle, even though the beginning and ending balances were under the limit.

As Wones spoke with reporters (including me) outside the hearing room after testifying, representatives from Chase stood nearby and handed out what they called their "rebuttal" of her story. The Chase statement says that the company, far from being unfair or unreasonable, raised Wones's interest rate because she maintained high debt levels relative to her income. "That caused us to propose higher rates due to her increased risk," Chase says.

Chase says Wones was notified of the interest rate spikes and given the option to close the accounts and pay off the balances at the original rates. The company also says the month that she went over the limit in the middle of a billing cycle just happened to be the same one that her introductory rate expired, which is why her interest rate increased. It adds that she was incorrect in how she described the situation to Congress.

Consumers, take note: If you testify against your credit card company, it may bite back.