Consumer Gains on Credit-Card Law Pared by Rate Hikes
By Jeff Plungis
Aug. 19 (Bloomberg) -- Americans with the best credit may be hurt the most as the first phase of a credit card reform law takes effect tomorrow, said Schwark Satyavolu, founder of a card-comparison Web site.
Lenders are raising rates across the board, according to Satyavolu, president and co-founder of BillShrink.com, which compares terms offered to consumers for credit cards, mobile phones and gasoline. The company says the average lowest card rate is about 11.25 percent, up from 8.85 percent in January. The average for less credit-worthy customers rose to 15.75 percent in July, from 13.75 percent in January.
“Banks are setting the bar high enough so they’ll only go down from here,” Satyavolu said.
The law gives cardholders some of the tools Congress promised to exercise more control over their accounts. They’ll have 45 days to reject proposed rate increases and they’ll have the option of paying off their existing balances at the current rates over a period of at least five years. Companies will have to mail bills 21 days before the due date, up from 14 days.
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ReplyDeleteBank America deliberately set me up - induced me to take a 0% loan @ $312 a month for a year. How could I refuse?
ReplyDeleteI was wary, made sure I did everything right; sent my first payment right away, signed up for automatic bank withdrawal - relieved when the 2nd was taken from my account.
Of course I had no way of knowing they were late making the next month's withdrawal, and accessed me with a late charge.
For some unknown reason, the agreement I signed didn't allow for an increased amount, so they didn't take the payment, my interest went to some unGodly rate & my payment Shylocked to $585.