R.H. Macy & Co. Inc. has increased its credit card interest rate in four states to 21.6 percent, the same rate that has been charged in Maryland for several years.
The rate increase comes as high credit card interest rates are increasingly coming under close scrutiny. Recently, the Senate passed a bill capping credit card rates at about 14 percent. But, after loud protests from the financial community, senators and representatives say the measure will be killed in the conference committee between the two houses.
Macy's, which has four stores in the Baltimore region, sent notices to its credit card customers nationwide earlier this month that it was raising the annual percentage rate to 21.6 percent. This increase affects Connecticut, Florida, Pennsylvania and Texas where the rate had been 18 percent.
Along with the notice of the rate increase was a certificate for a 20 percent savings on any single merchandise item charged to the Macy's card before Dec. 24.
Macy's has been charging the 21.6 percent rate in Maryland for )) several years, a spokesman said. The rate in many other states had been previously increased to 21.6 percent.
A Macy's spokesman said the rate was increased to bring the company's rates into line with those of other department stores. He also stressed that the credit card operation is not a profit XTC center for the company and is offered as a service to customers.
The spokesman said there no significance to the timing of the increase, which comes just as the retail industry enters its busiest season. "These increases were both introduced and decided upon many months ago," he said.
While Macy's is raising its rate, AT&T is lowering the rate on its Universal Card by 1 percent in reaction to President Bush's request that rates be lowered.
The reduction cuts the rate for charter AT&T card customers from 17.4 to 16.4 percent. For other customers, the rate will drop to 17.4 percent from 18.4. Charter members of those customers who requested the card between March 26, 1990, when the card was introduced, and March 26 of this year.
An AT&T spokesman said the credit card's variable rate is tied to the prime rate. However, a normal reduction would have come on Jan. 1. But because of President Bush's appeal, the drop was made six weeks ahead of time.
In a letter to customers, Paul G. Kahn, president and chief executive officer of AT&T Universal Card Services, said the recent decrease brings the total rate drop this year to 2 1/2 percent.