April 23, 2009

Credit-card relief

Filed under: News — hypeplug @ 5:02 pm


Column Archive HELP DESK Gerri’s Top Tips

Credit-card relief

Having the interest rate on your credit card suddenly change is tough. But regulations are in the works that may help you out.

By Gerri Willis, CNN personal finance editor

NEW YORK (CNNMoney.com) — Washington has been pressing the credit card industry to adopt more consumer-friendly practices. That’s because credit card issuers have been tightening the screws on consumers — even ones who are up to date and on time paying their bills.

Consumers are complaining not only that rates are rising, but that limits are falling — hurting credit scores. Some issuers are closing accounts due to inactivity — which can also hurt your credit score.

Here are some specific examples of changes according to Lowcards.com:

  • Capital One increased rates for Platinum Prestige customers to 11.9% from 7.15%.
  • Bank of America to increase rates for cardholders with high balances.
  • Discover will increase its balance transfer rate to 4%from 3%.

For that reason, experts expect some kind of reform. Already, there are two bills in Congress — both would ban credit card companies from abruptly jacking up interest rates and fees and preventing young adults from getting credit cards.

Next year — July 2010 — the Federal Reserve puts in place new rules on credit cards. Here’s what you can expect:

  • Limits on over-the-limit fees.
  • The end of universal default.
  • A longer billing cycle.

I ran into Representative Carolyn Maloney this week — she’s the author of “The Credit Card Bill of Rights.” That bill just passed through a congressional committee last night.

And she says that having rules are one thing — if you remember, the mortgage industry was ripe with rules both before and during the crisis — but having those rules enforced is quite another ball of wax.

Got a financial dilemma? Go to cnnmoney.com/helpdeskto submit questions, read the Help Desk articles and check out new Help Desk videos. And tune in to CNN’s Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions.


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