Credit card confusion
By CHIP CUTTER
Credit card companies are rushing to raise interest rates on outstanding balances, while also imposing harsh penalty fees, to beat a law that takes effect next year.
Because the law restricts changes to interest rates, many card issuers have raced to bump up their rates ahead of the regulations.
Interest rates rose by an average of about 20 percent from December 2008 to July 2009, according to a study conducted by the Pew Charitable Trusts. And nearly every card issued online by the nation’s largest banks still contains provisions that will be prohibited under the new rules. These include rate increases on existing debt.
Card issuers don’t have to abide by the law until mid-February. Some legislators are working to push the deadline forward. Either way, beleaguered consumers will likely have to wait a few more months to get some relief from the labyrinth of card policies.
Associated Press
