Ask Dr. Don By Don Taylor, Ph.D., CFA • Bankrate.com

Widow's lament on credit cards

Dear Dr. Don,
When my father passed away in December 2000, there were balances on credit cards, which were in his name and my mother's name jointly. My mother has been paying down these balances.

One of the accounts raised the percentage rate drastically as soon as they learned that my father had passed away. Now another account has raised its rate to 24.99 percent and they refuse to speak with me even though I have power of attorney for my mother.

Is there a consumer organization to which we can appeal to have the interest rates reduced to a manageable figure for my mother?
Geraldine Grumbling

Dear Geraldine,
The Federal Reserve Board publishes a Consumer Handbook to Credit Protection Laws. The handbook has a section on discrimination against women and changes in marital status.

It states, "The law says that creditors may not make you reapply for credit just because you marry or become widowed or divorced. Nor may they close your account or change the terms of your account on these grounds. There must be some sign that your creditworthiness has changed.

"If you think you have been discriminated against, cite the law to the creditor. If the creditor still says no without a satisfactory explanation, you may contact a federal enforcement agency for assistance (the federal agency you should contact should be included in the notice you receive from the creditor), or you may bring legal action, as described in the Filing A Credit Complaint section of this handbook."

Credit card companies can be lemming like when it comes to increasing credit card rates. They periodically review their customer's credit reports. If a competitor has raised a rate because of a late payment, they use that as a justification for raising their rate, too.

Even if you are able to help your mother get these interest rates lowered, the real goal is to get these balances paid off. It's been a year and a half since your father has passed away. Has she been able to make more than minimum payments on these cards? Come up with a strategy to get these cards paid off as soon as practical.

Another helpful hint comes from Experian, one of the consumer reporting agencies. They suggest that you limit the risk of fraud posed by pre-approved credit card offers in your father's name by calling (888) 567-8688 to opt out his name from pre-approved offers from all three major consumer reporting agencies. This step shouldn't be necessary if the agencies have already been notified about your father's death.

I can't speak to why the credit card company won't deal with you if you have power of attorney over your mother's financial affairs. A second complaint, filed with the Office of the Comptroller of the Currency, should help if the credit cards are issued through a national bank. The OCC link will also help you direct your complaint if the cards are issued through other types of financial institutions.

-- Posted: July 31, 2002