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New regulations for credit card debt netting results
By Edith Barlow on Jul 27th, 2010
Credit card debt is an issue that some Americans are struggling with, and some practices that may have put them there were restricted through new regulations from the government.
The Credit Card Accountability, Responsibility and Disclosure Act limited the ability of companies to increase interest rates, along with reducing the availability of accounts to younger people. Recently, the Pew Health Group's Safe Credit Cards Project showed that the legislation has had a positive effect for consumers.
For example, rate increases made in connection to late payments have disappeared, as have payment allocations that could hurt consumers.
"Most of the news is good, but we are seeing the rise of new harmful behavior," said the group's managing director Shelley Hearne.
Some of those include higher fees for cash advances or other punitive interest rate increases. Furthermore, companies are also not including the existence of these fees in online agreements for credit card accounts.
Before the Credit CARD Act took effect, some companies increased interest rates while they still had the ability to. As a result, consumers may consider an option like debt consolidation, which can eventually lead to lower bills.
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