Credit card issuers raising interest rates before new law takes effect
Chase, for instance, will raise the minimum payment required of some of its customers from 2 percent to 5 percent of the statement balance starting in August. Chase and Discover have increased the maximum fee charged for transferring a balance to the card to 5 percent of the amount, up from 3 percent and 4 percent, respectively. Bank of America last month raised the transaction fee for balance transfers and cash advances from 3 percent to 4 percent. Card issuers including Bank of America and Citi also continue to cut limits and hike up rates, which they have been doing with more frequency since January.
"This is a common practice and will continue to be common, because issuers can do these things for really no reason until February," said John Ulzheimer, president of consumer education for Credit.com, which tracks the industry. "It's what I call the credit card trifecta — lower limits, higher rates, higher minimum payments."
The flurry of activity, which the banks say is necessary to shore up their revenue losses, has irked members of Congress, who passed a new credit card law that was signed by President Barack Obama in May. The law, among other things, would prevent card companies from raising rates on existing balances unless the borrower was at least 60 days late and would require the original rate to be restored if payments are received on time for six months. The law would also require banks to get customers' permission before allowing them to go over their limits, for which they would have to pay a fee.
On Wednesday, Sen. Charles Schumer, D-N.Y., once again requested that the Federal Reserve invoke its emergency powers to place a limit on interest rate hikes.
"This is what many of us feared about a law that didn't take effect right away," Schumer said. "It was never going to take this long for the credit card companies to get ready for the new reforms. Instead, issuers are using the delay in the effective date to wring more dollars out of their customers. It is against the spirit of the law, and it is just plain wrong."
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- News and Politics, News, US News, Interest Rates, 1 more + add
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- WakeUpPeople
- added this
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I try not to cuss but . . . THOSE BASTARDS !
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Those sons of bitches, I hate the banks!
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- kennymotown
- 5 months ago
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don't forget the international bankers, Kenny!
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They are all from the school of screw the commoner whatever way they can. I haven't had a bank for 15 years and carry on my business just fine.
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- kennymotown
- 5 months ago
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get rid of your credit cards, they are a large part of the problem we are in now. if you really need to buy it, then you would save the money.
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credit cards are the essence of inflation. they hurt you, they have eviscerated america
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Cigarettes went up a good month before the law took effect.
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I stopped using my cards a long time ago because I'm single and retired and can easily live with out them. Credit cards have become so entrenched in the finances of our society I don't think they can or will go away. Obviously these crooked banks have no qualms about cheating people so they need to be under strict regulation. There used to be a usury law that prohibited charging more than a 12% rate. This should be reinstated.
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And many more regulations on the financial markets at all levels before it's too late. Oooops too late.
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- kennymotown
- 5 months ago
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Clearly they need to amend the legislation to take effect immediately. Give em an inch, they take a mile. And your shorts.
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They've only just now started to hand out much better APR rates with new credit cards. Thank god. http://www.pointsincase.com/free/discover_clear_card.htm
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- LeslieSmile
- 4 months ago
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what does somebody do who cannot make the doubled payment? Even if they have made payments on time for twenty years? It almost seems that they have so much money...the banks...that they don't even care. Wish I could give up that kind of easy money each month. PREDICTION: It will cause people to just go into default and go bankrupt. Causing shame, stress, illness and WHY DO THE CHANGES HAVE TO WAIT UNTIL 2010? When AIG got bailed out, the BofA, Countrywide...over night. Over freaking night.
Why is it that anything that has to do with the regular person takes a year and what has to do with the snakes takes only overnight. I really hope that people will put on C Span and start to educate themselves. Politicians are megaomaniacs who were too ugly to be movie stars. Overpaid and egocentric. I took that line somewhere but I can't attribute as I can't remember where I heard it.-
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- privateibber
- 3 months ago
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