Credit Card Penalties: A warning regarding your interest rate in the new year

I received a email recently from an old client the topic was regarding Credit Card increases. Due to the latest legislation that was past earlier this year, credit card companies are trying to do anything and everything they can before the new rules are implemented on February 22, 2010. As we know the average consumer should never agree with “Big Business” at face value. So what are the big credit card companies trying to pull before February 22, 2010, first they have raised the bar for who they deem as “good consumers” in-turn marginalizing the majority of credit card holders. Second, research is showing from the Pew Health Group, that these unjust credit card practices have become even more rampant. Pew research, has also reported that not one of the card companies reviewed would meet the in Credit Card Act regulations passed earlier this year. Even after being called out, they do not even want to show face! At times I wonder how do they sleep at night. Are you surprised, I am not! Will Credit Card companies change there business practices, lets be realistic not until they are forced to.

Let’s keep the following practices in mind, because they are pretty alarming:

  • 99.7% of companies have raised interest rates on outstanding balances
  • 95% of card companies have engaged in harmful practices towards there customers
  • 90% of card companies are using hair trigger option that would increase rates after a card customer makes just one or two late payments. Documentation shows that some payments have gone up 29%
  • 12.24% and 17.99% is the median annual percentage rate used by bank credit cards

Just to put this topic in prospective, people in this country pay around $15 billion a year in credit card penalties. Furthermore, 80% of American families have a credit card, and 44% of families carry a balance on their card. At times it seems like a stacked deck, and you probably say to yourself what can the average credit card user do! Throughout all my years and experience I think creating personal awareness is the most important. As we all know these companies are not our friends. Before I started a career in credit repair help I was just like everybody else on the other end of the spectrum. Hopefully, the new Credit Card Act will me implemented and will have oversight. Let’s wait and see I will be optimistic. After finding these new figures, I am making it one of my New Year’s resolutions to report the unjust acts that occur. So you will not fall victim to to these practices. My goal writing this blog was not be depressing going into the New Year, but I want to gear everybody up for a fresh start in 2010.

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Mick Bernard is a Credit Consultant from Scottsdale, AZ. His company Credit Strategies is helping consumers clean up their credit nation wide. For more credit tips visit us at http://www.onlinecreditstrategies.com/blog/

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