NEW YORK (4/10/09)--Tamara Smith of Burlington, Vt., told The Wall Street Journal Thursday she is opening a new credit card account with a credit union instead of a bank to protect herself from banks’ pursuit of higher interest income. Smith reacted to a Bank of America notice that her 7.9% interest rate would increase to nearly 13% by calling the bank to opt out of the change. That allows her to retain the 7.9% rate, but prevents her from using the card for new purchases, which would trigger the higher rate on her full balance of approximately $2,000. Bank of America recently announced plans to raise interest rates to double-digit levels for credit-card customers who carry a balance every month instead of paying off the card in full. The bank attributed the move to higher costs for offering credit,. Citigroup Inc., J.P. Morgan Chase & Co. and American Express Co. already have implemented similar policies, which typically allow cardholders to opt out of higher rates by ceasing to use the card or closing the account. Financial educators encourage consumers who face increases to pay down balances, but warn against closing accounts because it can negatively impact credit scores, said The Journal. Banks are increasing rates now to avoid new regulatory limits on credit-card increases that take effect in July 2010. Congress is pondering bills containing stronger restrictions with a shorter timeline. Banks have protested those proposals, claiming tighter rules would force them to restrict access to credit and promotional rates.