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Organization requests Fed acts on credit card debt practices
11/23/2009
Credit card debt may be becoming more difficult for people to deal with despite the fact the government enacted new laws recently in order to protect consumers.
Many card companies are raising interest rates and fees on their customers, while others are closing accounts. These actions are part of the companies' plan to deal with upcoming regulations put forward by the Credit Card Accountability, Responsibility and Disclosure Act.
February will see many of those rules take effect, including those that limit companies in their ability to raise interest rates. Hence, many companies are trying to raise rates now.
"Credit card companies have wasted no time coming up with new ways to hit consumers with high interest rates and fees," Lauren Bowne, staff attorney with Consumers Union, said.
As a result, Consumers Union has asked the Federal Reserve to try and stop these practices. For example, some card companies have switch customers to a variable rate. However, they've also set a minimum that will be tacked on to the rate, thereby making it not completely variable.
Other nonprofit organizations such as credit counseling agencies, which help evaluate borrowers for debt consolidation program eligibility, are also engaged in this widespread effort to protect consumers by providing current information on how to successfully deal with credit card debt.
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