Credit Card Reform: Consumer Makes Bank With New Restrictions

By Ashley Jones on September 1, 2010, 12:37 pm Posted in Finance News

Watchdog groups feared that the new credit card restrictions will cause credit companies to raise their rates. The examples they pointed to are the fee-happy banks who have learned how to manipulate fees, especially overdraft fees so that they go through the system several times. Although this behavior is unethical in itself, no one has yet done anything about it. The new rules for the Credit Card Industry stop similar abusive practices.

Will The Consumer Pay In The End?

Certain credit card companies may make it up by charging higher fees. The credit cards that cater to people trying to rebuild their credit can still charge high interest rates, but the credit card issuer now has much tighter rules for when they can and cannot raise rates. They must also let their customers know about changes in interest rates in advance. It also prevents companies from changing a person’s balances based on where they shop. While it does not immediately translate into more savings from consumers, it can make credit card companies more competitive because people can now pay off balances and change cards if the balances become too high.

 

What Other Effects Might The New Rules Have?

The new rules may make credit card companies more reluctant to issue cards to new consumers until they know the full effect. Credit card debt still gets retired faster than any other type debt in the country and that has been the case for several years. The recession is forcing many people to live within their means even if they have not suffered because of the conditions. Not getting new credit is a bad thing for businesses who need it to grease the wheels of commerce, but it means that people will put off making purchases of larger ticket items. Smaller items will do well.

Related posts:

1. Credit Card Reform Act: Who Benefits From All This
2. Credit Card Reform Act: Does This Actually Do Anything For Anybody
3. Most Recent Credit Card Debt Statistics Revealed Here
4. The Credit Card Reform Act Might Assist You In Your Financial Struggle
5. Top 3 Dangerous Credit Card Problems Or Mistakes!