Wells Fargo & Co. plans to raise interest rates on a majority of credit-card customers by 3 percentage points before federal rules limiting such increases take effect, a company executive said Wednesday.
“This is something we’ve been contemplating for quite a period of time,” Kevin Rhein, group head of card services for the San Francisco-based bank, said in a telephone interview. “We had just reached the point that we don’t think we can offer credit cards at the current pricing and keep credit flowing.”
Wells Fargo began advising customers this week that the change takes effect Nov. 30. That’s a day before House Financial Services Committee chairman Barney Frank wants curbs on rates and fees to become effective under the new U.S. credit-card law. The Massachusetts Democrat plans a hearing today on moving up the date to Dec. 1 from Feb. 22 to head off increases by card issuers.
Rhein didn’t comment on whether Frank’s bill had a bearing on the timing of Wells Fargo’s rate increases. The bank is also eliminating over-limit fees, which are imposed when customers exceed their credit lines.
Wells Fargo is the eighth-biggest U.S. card lender, Rhein said. The company accepted $25 billion from the government’s bank-bailout program.
