Consumer Law

Credit Card Companies Make it Hurt Before New Laws

By Randall Ryder

Despite the new credit card laws go into effect in February, credit card companies are putting the financial hurt on customers.

According to a report from Safe Credit Card Project:

• 99.7% of bank cards allowed card issuers to boost rates on outstanding balances.
• 90% of bank cards increased their penalty rates.
• Interest rates jumped an average of 20% from December 2008.

Citi Holdings sympathizes with customers, saying “We understand that customers don’t like price increases, especially in difficult economic times . . . these actions are necessary given the doubling of credit card losses across the industry from customers not paying back their loans and regulatory changes that eliminate repricing for that risk.”

Some companies, like Bank of America, will begin charging annual fees on accounts that previously did not have them. Citigroup will allegedly charge an annual fee for customers who do not spend a predesignated amount over the course of a year. Other banks may charge customers who do not use their cards for long periods of time.

The new credit card laws will benefit consumers. But be sure to keep close tabs on your credit cards as the changes take effect. Even if your credit card wants to charge an annual fee, there will always be cards that will not. Do your research and make sure you get the best credit card available.

Credit-card countdown: Higher rates abound | CBS MarketWatch

(photo: _ES)

Full post as published by Caveat Emptor on December 10, 2009 (boomark / email).