Federal Regulators Change the Credit Card Game Rules
admin on December 23rd, 2008
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Federal regulators has approved an overwhelming reform act on the manner credit cards companies charge and collect its card holders interest and fees. Today’s economic crisis has led many card holders to defaulting status on consumer credit as foreclosure rates have climbed to record levels. With jobless and mortgage default rates climbing, many consumers have all but abandoned paying revolving consumer debt.
The new collection and fee tabulation changes will cost credit card issuers almost $10 billion a year but will not take affect until July 2010. Americans used nearly 700 million major credit cards in 2007. Consumer advocates have charged the collection efforts of credit cards to be unfair to the card holder for decades. The new regulations will also prevent credit card companies from raising interest rates on card holders without a 45 day notice. Additionally, card companies are restricted on raising interest rates on balances incurred when lower rates were in effect. Regulators hope to regain confidence of consumers in financial institutions and level the playing field for creditors and consumers.
