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Debt consolidation may help as lawmakers call on Fed to look at rate increases
By Marvin Milner on Jul 21st, 2010
Two lawmakers are calling on the Federal Reserve Board to institute additional rules regarding credit card debt.
According to a report from the Associated Press, Democratic Senators Charles Schumer and Tom Harkin have sent a letter to Fed Chairman Ben Bernanke asking the central bank to limit the ability of companies to increase interest rates on people who are late on their bills.
Quoting the letter, the AP said the two senators noted that interest rates can be doubled or tripled on account holders who are two are three months back on their bills. If the Fed does not act, the lawmakers said they would take measures in their own hands in the form of a bill.
Stipulations from the Credit Card Accountability, Responsibility and Disclosure Act already add more rules for issuers to follow, including requiring them to eventually review increases in interest rates.
However, whether rates are reduced appears to be a matter for card companies to decide. Consumers who are trying to get lower payments may consider debt consolidation, which can lead to paying less interest over time.
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