Credit Card Rules to Protect Consumers actually Hurt

The advocacy group “Consumer Action” says credit card companies and banks have rolled out a slew of arbitrary new fees and jacked up interest rates since President Obama signed the Credit Card Accountability, Responsibility and Disclosure Act, or the CARD Act into law.  

Consumer Action published on its Web site a gallery of what it said were the worst offenders. Here’s some that made the list:

* Bank of America’s Platinum Plus Visa, which increased interest rates by up to 46 percent.

* Capital One, which increased its penalty interest rate by 6.25 percent.

* Citigroup, which began collecting annual fees ranging from $30 to $90.

* JP Morgan Chase, which increased its balance transfer fee to 5 percent.

* JP Morgan Chase, which increased minimum payments from 2 percent to 5 percent.  When consumers call asking for relief, they are told the only way to reduce their monthly payment is to accept a higher interest rate.

* HSBC, Chase, American Express and Bank of America, all of which have all closed accounts without warning.

Many issuers also have lowered consumers’ credit limits without warning. This limits their purchasing power and hurts their credit score.

When it passed the law, Congress gave the banking industry nearly a year to implement the changes mandated by the CARD Act. Some in Congress now feel that was a mistake. Rep. Barney Frank, D.-Mass.,  has introduced legislation that would move up the effective date of the remaining provisions to Dec. 1.

This information was taken from an MSNBC article. You can read it in full here.

Consumer Action has also compiled a list of all of the new rules that will take effect Feb. 22, 2010.


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