New York Post columnist John Crudele has a column in today's paper describing how credit card companies that also dabbled in mortgages, like Capitol One with its Greenpoint Mortgage unit, are quietly cranking up interest rates on consumers' credit cards to help make up for money lost in mortgages.
There's no sense how widespread this practice is, but it is troubling. If consumers are hit with higher credit card rates, that will most assuredly cut into spending as they will have to allocate more funds to pay the higher interest rates.
I first found out about this because a reader sent me an e-mail complaining about the increase.He was a long-time Capital One customer with excellent credit and he resented the bank treating him like a bum.
When I called Capital One, which is among the largest credit-card issuers in the nation, the company said it was raising rates because it could and because of unspecified economic conditions.
I pressed and a bank spokesperson basically said that the economic reasons were none of my business.