March 8, 2010
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New CC Regs -- Rate Jacks, Pt.1
Changing the fare in-flight.This article series is intended to be a more comprehensive evaluation of the portion of CCARDA regs which just went into effect on February 22, This major credit card reformation has been over two years in the making, was spearheaded by Senator Chris. Dodd (D Conn), signed into law by President Obama and comprised of three phases, each to become effective several months apart. Following the multitudinous outcry of tens of thousands of credit card consumers writing letters to Congress, the bill is designed as a basic consumer protection outlay to prevent the most flagrant abuses by the huge credit card industry.
The credit card subjects treated here have been drawn from the list presented in the recent news article entitled: "New CC Regs - A more-level playing field". So, for a quick overview, please refer back to that article.
The first topic on the list is:
No fair jacking interest rates on old debt;
Just about anyone who hasn't been vacationing on Mars for the whole of last year knows what this is all about. That's when the dam burst and a flood of new high-interest rates deluged everyone's existing credit card debt. In the beginning, however, there were only a few abusers ("bad apples"). Unfortunately, those bad apples happened to be very large and millions of credit card consumers were inundated. Large credit card companies like HSBC and Wells Fargo were wrecking havoc in the industry and no one could stop them because it was legal.
Good and responsible consumers who just happened to carry a high balance (though still within a healthy credit card "utilization ratio") were caught blindsided when their interest rates started doubling and tripling for seemingly no reason except that it was legal. These good, responsible consumers found themselves suddenly behind the 8-ball because they couldn't afford the triple finance charges imposed on them by surprise after they were already carrying heavy debt. They cried out to Washington and Congress heard their cry.