Many banks are continuing to add fees and increase rates on your credit cards just because they can.
New and more stringent law are set to take place in February and just under the gun, the largest bank issuers are still using many of the tactics that led to the new regulation in the first place.
The Pew Health Group’s Safe Credit Cards Project finds some 400 credit cards from the nation’s 12 largest bank issuers engaging in unfair and deceptive practices. What are they?
The majority – 99.7 percent – allowed issuers to hike the interest rates on the outstanding balance, up from 93 percent who were doing that in December.
Have you ever seen a bank penalty rate of 28.9 percent? That was the median rate and again the majority of bank cards – 90 percent – had hikes that were triggered by one or two late payments in a year.
The majority hiked interest rates an average of 20 percent across the board from December 2008, some even as high as 50 percent, even on their best customers. Many consumers have had their interest rate increased due to a credit score that drops when their credit line is cut or cancelled, something that is happening to many in these tough times.
The lobby for the banking industry, the American Bankers Association, says the higher rates are understandable as issuers have unpaid and unsecured debt which drives interest rate hikes.
New rules will mean that consumers must be alerted when there is an increase in their rates. Until then, the House voted to limit rate increases on existing credit cards and to move up the start date for many rule changes.
The Senate needs to okay the bill as well as the president before it becomes law, but until they expect banks to squeeze customers just a little bit while they still can.