Consumer Law

Credit card changes come too late

By Cathy Moran, California Bankruptcy Lawyer

I was managing to pay on my credit cards til they jacked the rates to 28%, reports client after client in my bankruptcy law office.  Often, the call to the card issuer for a payment arrangement itself results in an increase in the interest rate.

You have to ask yourself what is the thought process of the banks.  Their race to raise rates on everyone has taken a pool of people who have struggled and sacrificed to honor their promise to pay their credit card debt and made them throw up their hands in surrender.  Bankruptcy results.

There was a line of thinking that said what the credit card issuers really expected from the ill-named bankruptcy reform act of a couple of years ago was to make bankruptcy just enough more complex and enough more expensive that card holders would pay on their debts for a couple more months before seeking bankruptcy relief.

If there was any truth in that assessment, the current actions of the card issuers runs exactly counter.  The banks are driving people to my office.

Full post as published by Credit Law Network on May 27, 2009 (boomark / email).