Not too long ago I mentioned that I opened my Washington Mutual statement, now JP Morgan, and my 11 or 12% interest rate was jacked up to 23.99%. I assumed I was late in a payment or went over my limit. I called and was told that they just “decided to raise the rates of some cardholders”. So, I quickly moved balances around, determined not to give them one red cent.

Then, my Bank of America account, which I opened just to do a balance transfer, decided it was going to jump from its “reasonable” rate of 18.99% to 24.99%. For no reason. And, when I called, they couldn’t tell me what happened either. I’m waiting for a call back (ha).

About a week later I got a letter in the mail from Citibank. I have 2 cards with them. The card that had a $12,000 limit was being brought down to $11,000 because of my credit score.

I panicked.

My credit score had taken a dip, but I’m not sure why. But a month later, it’s the highest it’s ever been. Ever.

Very curious. Think there could be some foul play at hand by any chance?

Did some searching and found a great article by Forbes Magazine:

Holiday Surprise: More Credit Card Fees
Liz Moyer, 12.05.08, 04:35 PM EST

Reaching for the plastic to pay for holiday presents this season? Expect to find a few surprises in your statement next month.

Credit card issuers, struggling with falling profits and rising loan losses, are jacking up interest rates and adding fees, not to mention cutting back on credit lines just in time for the busy gift giving season. This coincides with rising joblessness and uncertain economic times that are making consumers feel a little anxious, if not a little desperate.

The combination makes consumers vulnerable to bad credit card deals. “If you’re not careful, you’re going to get yourself in a fix in a hurry,” says Curtis Arnold, founder of cardratings.com and author of the recently published How You Can Profit From Credit Cards…

…The card industry has spent the last year bracing for bad economic times. Earlier this year Bank of America (nyse: BAC – news – people ) told thousands of card holders, even those with good payment histories, that they would see their rates jump from 9% to 28% if they didn’t pay off their balances and stop using their cards. More card issuers are raising interest rates, even though the Federal Reserve is cutting short-term rates.

That’s a far cry from the days when card companies were stumbling over each other to woo new accounts. Bank mergers have consolidated power among the very largest card issuers, including JPMorgan Chase (nyse: JPM – news – people ), Citi and Bank of America, and stand-alone companies like American Express (nyse: AXP – news – people ), Capital One Financial (nyse: COF – news – people ) and Discover (nyse: DFS – news – people ). All of these companies are facing profit pressure from rising credit costs.

According to Consumer Reports, credit card balances as of September reached $971 billion, up from $825 billion at the end of 2005. The 30-day delinquency rate of 5% is the highest since late 2002. As the publishing and research company notes in its annual financial education campaign, “there’s no ‘bailout clause’ in your credit card contract.”
What better way for banks to make up for credit losses than to start charging for stuff they haven’t been charging for? JPMorgan, for example, told customers who carry large balances every month they will have a $10 monthly charge in addition to all of the other regular account fees and will see their minimum payment increase to 5% from 2% monthly.

The bank explains it constantly evaluates the risks and costs of funding credit card loans. The fee, which goes into effect in January, affects less than 0.5% of accounts and applies to those who have carried large balances over two years “while making little progress in paying them off.”

Remember the annual fee? That disappeared in the years of heavy competition for new customers, but it is likely to make a strong comeback, according to Aite Group consultant Adil Moussa.

Card companies make their money in three ways: fees, interest and the fees that merchants pay them to accept their cards (the interchange fee, in industry parlance). Congress is debating whether to pressure card issuers to lower those merchant fees and otherwise limit the ability of banks to charge punitive fees, like late charges and over-limit fees, leaving banks with no choice but to resurrect the annual fee.

Uh-oh. I would say that 75% of the transactions at the store were credit cards. I’m sure that many of the mom-and-pop stores see heavy credit card sales, too. Where does that leave the small business? Not only are people going to be using credit cards less, they are going to freeze their spending because any disposable income they have will probably go towards debt. Stories like these are scaring the pants off the public. I’m sure that come January, there’s going to be a lot of noise about this.

I completely understand a slap on the wrist because heck, all of America, including the banks, have spent more than they have. But drowning us? After the bail out. Isn’t that just priceless?

What are the recession-proof businesses again?

1. Ice Cream – People eat out less but still splurge on Ice Cream (according to Ben & Jerry’s… take that with a grain of salt)
2. Lipstick – Women can’t afford that luxury bag but they will splurge on lipstick (really?)
3. Hollywood – Movies, video games etc. But what if SAG strikes… then what? hmmm?
4. Booze! Makes total sense
5. The Death industry – Baby boomers need burial plots, funeral service, caskets and other essentials. Morbid, but true.
6. Health Industry – Who knows if we’ll get universal health care next year. Who knows how the health industry feels about this?**
7. Gambling – Vegas is up. As usual, the house always wins
8. The Repo man! – This is obvious. What a great job! Where do I sign up?
9. Discount retailers – Walmart, dollar stores etc. Nothing says lovin’ like no-name snacks and rollbacks
10. The super rich – they’re still rich and Prada, Hermes etc saw increases in sales in 2008. Bastards.

**Total sidetrack about uni health care… but I can’t stop thinking, “That would mean that the DMV takes care of my Pap Smear”. That really freaks me out. It’s a bad experience already but add to it the bureaucracy, paperwork and lines? No thanks. I hope this frown turns upside-down but currently, I want the government out of my paper gown. (And 90% of my friends want universal health care and give valid reasons for it. It’s a bone of contention over meals). On a happier note, if we had health care covered, then we’d have more disposable income! Take that JP Morgan!