Credit Card Companies Take Advantage of Consumers
Credit card holders who previously paying say 9% on their credit card balance have been hit with rate increases raising their rates perhaps to’%, 29%, 39%,or even more. Such rate increases have been initiated by some credit card issuers for most all of their customers, even those with excellent pay records. Credit card companies are raising rates knowing that new rules take effect in February of 2010 that will restrict their ability to raise rates on existing balances.
Currently a credit card company can raise a consumer’s interest rate, even on existing balances, at any time and for any reason (or no reason). Credit card companies have long been able to arbitrarily and unilaterally change a consumer’s interest rate. However, under a new law that takes effect in February, The Credit Card Accountability Responsibility and Disclosure Act of 2009, credit card companies will find their ability to raise rates on existing balances restricted although they can still raises rates on future purchases by providing a 45 day notice.
Usury laws are laws that limit the rate of interest that a consumer can be charged on financial transactions. Virtually all states have usury laws. However, credit card companies are not covered by state usury laws and therefore have no limit on the rate of interest they can charge consumers. Interest rates in excess of 40% are being charged by credit card companies!
Credit card problems are causing American consumers financial headaches. Minimum payments are rising as interest rates rise and credit limits are cut. The already recession squeezed consumer now finds sometimes finds himself or herself having to choose between paying the credit card or the mortgage or perhaps even putting food on the table.
Under the bailouts, the banking industry has received billions of dollars in taxpayer assistance. Part of the stated purpose of the bailouts was to provide funding for new consumer lending to stimulate the economy. Instead, the banks took the billions and still are not lending and are cutting back available consumer credit. Even customers with excellent pay records have seen their available credit either eliminated entirely or cut drastically. The banks who benefited from the bailout are squeezing the very taxpayers who helped them with raised interest rates and lowered credit limits.
Credit card issuers are cutting back credit limits across the board. Consumers with lines of available credit are often finding that available credit disappearing even if they have an excellent payment record. The big banks which received billions of dollars in taxpayer assistance are squeezing the very same taxpayers with reduced credit lines and higher interest rates.
While the banks have been bailed out, there is no one to bail out the consumer. Consumers are expected to default on ONE BILLION dollars in credit card payments in 2009 with the defaults continuing at a high rate into 2010. Credit card problems are going to continue to be a way of life for United States consumers into the near future.
Credit card companies collect more than 90 billion dollars annually in interest and fee payments from consumers in the United States. Consumer credit card problems were not really a factor in the banking industry troubles. And thanks to the taxpayers, the banks are again profitable.
While credit cards bring enormous profits to the banking industry, they are highly unfair and financially detrimental to consumers. According to a CNN Money table, a consumer paying on a $10,000 credit card debt at’% but only making the minimum payments will find that it will take 513 months of payments totaling over $26,000! As the bank can change the interest rate at will and there is no cap on the interest rate it can charge, the consumer often becomes trapped in a downward spiral of debt from which escape is difficult if not impossible! What is the consumer with credit card problems to do?
Are you among the millions of Americans burdened with unmanageable credit card debt? U.S. Consumer Credit Card Debt now totals almost ONE TRILLION DOLLARS! Real help is attainable with this one of a kind program that delivers real results! This is NOT bankruptcy or debt settlement.
