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Article: Raising the Roof on Rates For Riskier Card Holders
- Article from:
- The Washington Post
- Article date:
- July 16, 1995
- Author:
CopyrightThis material is published under license from the Washington Post. All inquiries regarding rights should be directed to the Washington Post. (Hide copyright information)
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After years of being bullied by consumers and the marketplace
into cutting interest rates and waiving fees, the credit card empire
is striking back.
Card issuers across the country are imposing new terms that allow
them to boost interest rates and levy increased fees on card holders
who pay late or exceed their credit limits. One issuer raises rates
on card holders who it feels simply have too much credit -- even
though their payment history may be satisfactory.
The card issuers call it "risk-based pricing," meaning, they say,
that they intend to charge riskier customers more. These customers,
who pay late or whose accounts become delinquent periodically, run up
costs that must be offset ...