Regulators Approve Credit Card Rule Changes

http://moneynews.newsmax.com/financenews...63236.html

Thursday, December 18, 2008 9:35 AM

Quote:WASHINGTON -- Final rules aimed at preventing credit card holders from being hit by unfair and deceptive practices such as surprise fees and interest rate hikes were approved Thursday by the U.S. Office of Thrift Supervision.


The new regulations are expected to bring some relief to millions of card holders but result in lower revenue for credit card issuers.


The Federal Reserve Board and the National Credit Union Administration are expected later Thursday to approve the same regulations, which go into effect on July 1, 2010.


OTS Director John Reich said in a statement that the rule will "ensure fair treatment" for the millions of American credit cards users.


"The rule will enhance public confidence in financial institutions and establish a level playing field for institutions that want to do business fairly without suffering competitive disadvantages," Reich said.


In 2007, Americans used an estimated 694.4 million credit cards with Visa, MasterCard, American Express and Discover logos, according to the Card Industry Directory.


Citigroup, Bank of America and JPMorgan Chase enjoyed almost 70 percent of the credit card market at the end of 2007, according to the directory.

Heard about this on the radio today. Maybe I've been living in a cave but I never really knew how abusive credit card companies are. Good thing I don't have any.

CC companies are just going to start charging higher initial rates (since they can't jack up the rates anymore). People with bad credit are going to either be rejected or have ridiculously high rates to begin with.

This blows me away.

We have good credit. Not great credit, not bad credit, not average credit. GOOD credit. We don't have huge balances on our two cards and we pay our bills on time. One company raised our rate from 5.5% to 28%. Yes, 28%. The other one raised it from 6% to 23%.

WTF?

So the government gave these companies access to billions of dollars, effectively slashed the federal interest rate to ZERO and they respond by jacking up rates like this?

Gee, thanks.

Not only that they are cutting your credit limits. Down to around 10K. The leaders are letting the CC companies become loan shark operations. There used to be "usury laws" that pegged the highest rate at around 9%, it was different in each state. That was before Jimmy Carter, cratered the economy and we had double digit inflation. The Usury got left behind. We should demand our states institute new Usury Laws. Unfortunately the CC Lobbyists would fight it tooth and nail.