America's consumers are angry at credit card issuers for racing to raise rates and fees in the months before the Credit Card Accountability Responsibility and Disclosure Act took effect, and consumer advocates are complaining about the ineffectiveness of the reforms.
Online PR News – 23-March-2010 – – Beverly, MA ( Onlineprnews ) March 23, 2010 - America's consumers are angry at credit card issuers for racing to raise rates and fees in the months before the Credit Card Accountability Responsibility and Disclosure Act took effect, and consumer advocates are complaining about the ineffectiveness of the reforms. The sweeping law that just kicked in February 22 was supposed to protect cardholders by curbing abuses by credit card issuers. For example, the new rules prevent issuers from charging over-limit fees without prior customer consent, severely restrict rate hikes on existing balances and require that any payments above the minimum be applied first to the balance with the highest interest rate, before balances with a lower APR.
In reality however, banks quietly enacted dramatic rate and fee hikes in the months preceding the February 22 effective date. Many people noted that their credit card rates increased sharply in December or January, right before the new rules took effect. And the new law does not place any cap on credit card interest rates.
“Suddenly my credit card company increased my rate from 11.99 percent to 29.99 percent, they just increased it without even notifying me!” said one credit card holder.
Among the largest increases, The Financial Times reports that Citigroup has raised rates on outstanding balances nearly 3 percentage points to an average of 24% for 13 million to 15 million cardholders, including those with Sears and Macy's cards issued through Citibank.
JPMorgan Chase, the biggest credit card provider, raised the minimum payment on outstanding balances from 2% to 5% for some customers, according to a recent Bloomberg article. JPMorgan has also raised its balance-transfer fee from 3% to 5% -- the highest rate among the large consumer banks, according to Bloomberg.
“Credit card issuers are afraid that the new law will cost them billions in revenue, so they’ve raised rates and fees through the roof,” says Marc Weiner, managing partner of the Attorney Network (http://www.theattorneynetwork.org). “Many of our clients have found their minimum monthly payments doubling or even tripling overnight, and they just can’t keep up.”
With credit card issuers declaring war on cardholders, what are hard-working Americans, who want to free themselves from the chokehold of debt, to do?
THE ATTORNEY NETWORK (http://www.theattorneynetwork.org) provides debt relief to individuals with $7500 or more of credit card debt. Attorney Network is committed to providing high-quality, ethical service to its clients and helping them become debt-free within 12-36 months. Their experienced, nationwide staff of attorneys, paralegals and legal debt negotiators takes great pride in helping individuals and families find an alternative to bankruptcy (http://www.theattorneynetwork.org), and turn their grim financial situations into fresh starts. The Attorney Network has saved millions of dollars for commercial and consumer debtors, settling on average for just 42% of the original debt load. The Attorney Network will provide you with affordable, immediate and practical debt relief from creditors and the anxiety associated with debt problems.
For a free debt consultation, please feel free to contact us at 877-288-9638
100 Cummings Center
Beverly, MA 01915
Contact: Marc Weiner