TULLAHOMA, Tenn. -- A frustrated Bank of America credit card holder helped to put Ascend Federal Credit Union in the national news spotlight yesterday evening.
Miriam Majors was featured on a Dec. 16 segment on the CBS Evening News. Bank of America had raised her credit card rate from 7.99% to 28.99% because it noticed that Majors' credit limit on another card had had been slashed from $23,000 to $15,900 and her credit score had dropped 50 points, said CBS reporter Mark Strassmann. The practice is called "balance chasing" and banks worried about their own rising loan defaults are decreasing credit limits for customers who don't pay their balances off each month, he said.
Majors, who "always pays her bills on time" closed the Bank of America credit card and opened a new one at $1.1 billion Ascend FCU "where cardholders have a voice in making the rules," Strassmann reported.
In a statement to CBS, Bank of America said it could not comment on a specific customer's account but that it is taking "a more aggressive look at credit cards in the current environment."
Ascend President/CEO Caren Gabriel said Majors' move to the CU helps reinforce the movement's message of differentiation.
"It goes along with our brand promise of educating members so that they become better financial stewards," Gabriel said. "We want to listen to their needs and not just sell them a product."