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article imageWells Fargo: Interest rates to increase

By Aaron Jefferson     Oct 7, 2009 in Business
In light of legislation establishing new rules regarding the raising of interest rates by credit card companies, Wells Fargo announced today they will increase their interest rates before the new rules go into effect.
Rates will increase by three points for the majority of card holders on November 30th, but for new card holders the rate increase will not apply.
Devin Rhein head of card services at Wells Fargo said, “This is something we’ve been contemplating for quite a period of time"
The bank to counteract the rate increases eliminating over-limit fees where a customer charges more than is available in credit.
Wells Fargo is the eighth largest U.S credit card lender and received $25 billion from the federal government's bank bailout program. With late payments becoming increasingly common the move should not surprise anyone. As it becomes increasingly risky to lend money, interest rates rise to offset the risk.
The second largest credit card lender, Bank of America also contemplated increasing rates for millions of credit card holders, but decided against the move in a letter released October 5th. Other credit card companies are considering rate increases or new fees to offset potential losses and declining consumer spending.
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