Credit Card Industry Defends Raising Rates When Credit Scores

Credit-card executives called on the congressional carpet to defend their rates say using a credit score to help determine how much interest to charge is key to their risk management.

Industry critics say it's another example of abusive, confusing credit-card practices that can push consumers deeper into debt.

And Senator Carl Levin says even customers who consistently pay on time are getting whacked by credit-card issuers that raise such rates without an adequate warning or a clear notice. He's threatening legislation to spur voluntary changes by the industry.

One woman told Levin's subcommittee on Tuesday that her credit-card rate nearly tripled without adequate notice and that issuers send "deliberately misleading and confusing" information.

Executives from Charlotte-based Bank of America and Discover Financial Services told the subcommittee that a credit score is one of several factors in determining whether to increase a customer's interest rate.