When Brenda Fishkin got the letter from Bank of America late last month, she thought it might be a joke.
The bank said it planned to almost double the interest rate on her credit card, from about 13 percent to 24.99 percent.
Fishkin, who is 60, could not figure out what she had done to incur the higher rate. She had never been late on a credit card payment, just refinanced her home at a lower interest rate and just been rewarded by her credit union with a lower rate on her credit card there, she said.
"Trust me," said Fishkin, who lives with her husband in Dallas, N.C. "I wouldn't be aggravated if I were a late customer and I deserved it."
Fishkin's displeasure is shared by hundreds of people who started filling up online message boards recently with complaints that issuers, including industry leader Bank of America, raised their credit-card rates without explaining why.
Those increases come at a time when many consumers were expecting their card rates would fall because the Federal Reserve began cutting the federal funds rate in September. That benchmark rate on banks' overnight loans to each other is indirectly tied to the monthly rate charged by most credit cards.
Card issuers such as Charlotte, N.C.-based Bank of America -- which became the nation's largest credit-card company with its 2006 acquisition of Wilmington, Del.-based MBNA Corp. -- usually give themselves broad authority to change customers' interest rates -- a right that they include in the small type of the agreements that cardholders accept.
Some consumers and analysts speculate that Bank of America, which saw profits all but disappear in the fourth quarter, is trying to squeeze money out of its credit-card users to make up for disappointing earnings.
A survey last month by the Federal Reserve found that more banks are tightening standards for approving credit-card applications.
It is an indication that issuers fear that the defaults besetting subprime mortgages will spread to other loans.
Curtis Arnold, founder of U.S. Citizens for Fair Credit Card Terms, said he also has been hearing complaints of unexplained credit-card rate increases from customers of JPMorgan Chase & Co.
But it appears Bank of America has been "more aggressive than some other issuers about repricing accounts," he said.
Arnold's consumer group, based in Little Rock, Ark., runs the CardRatings.com Web site.
Bank of America spokeswoman Betty Riess said the rate changes are "business as usual."
She stressed that last year about 6 percent of Bank of America's 40 million credit-card customers experienced a rate increase. A little more than half of those were because customers fell behind on their payments or going over their limits.
Still, that leaves about 1 million Bank of America customers who were faithfully making credit-card payments but were hit with higher rates anyway.
Riess confirmed that Bank of America can change a customer's credit card rate based on "external credit criteria."
That means customers who default on loans from other lenders or do anything that might lower their credit score can be slapped with a higher interest rate on their Bank of America card -- even if they've never missed a Bank of America card payment.
Consumer advocates say that is unfair. Riess says it is meant to benefit consumers.
"This enables us to really look at the risk of an individual account, so accounts that are less risky receive a lower rate," Riess said. Any rate increases, she said, have a good reason behind them: "We do a thorough analysis before we make a decision."
Fishkin and others say they called the bank to ask why their rates had been raised and could not get a straight answer. Fishkin said she has a balance of about $12,000, which is close to her limit. It is largely related to moving expenses; she and her husband recently relocated from Florida.
Holley Pridmore of San Antonio said she has had a Bank of America credit card since 2002 and has never been late on a payment. But the bank recently increased her rate from 15.24 percent to 23.99 percent.
Pridmore, 49, pulled her credit history and called the bank.
"If you can find a late payment in our entire history, I'll pay you $100," she told the customer service representative. "He said, 'That's not really the point,' and I said, 'Since when?'"