Students that hold credit cards from Capital One or Bank of America might see their interest rates skyrocket to 28 percent ““ through no fault of their own.
Apparently these credit card customers can “choose” to opt out of the increase by paying off their balance and canceling the card. But few people our age that carry a balance on their card have enough money sitting around to pay it off in full.
Apparently the increases are happening to hundreds of thousands of card customers, and the companies are increasing the rates without giving a solid reason for doing so.
This is a bad strategy for the economy.
Consumers cannot be burdened by extra economic baggage like higher interest rates with a looming recession ““ it will likely decrease spending and increase costs to consumers.
Perhaps card companies should be forced to explain increasing rates, or offer a more complete explanation of the factors that go into a rate increase up front in the contract.
Regardless, these sudden increases should serve as a warning to students who do not do the proper research before obtaining a credit card.
These companies rarely have to explain themselves to frustrated consumers, and many are notorious for preying on students who aren’t experienced or jaded enough to read the fine print.
Credit cards can be a great resource, but only when used with caution.
Unsigned editorials represent a majority opinion of the Daily Bruin Editorial Board.