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Official in Massachusetts seeks answers on increased rates for credit card debt
01/19/2010
Consumers who are already having a difficult time with credit card debt may have found that their lenders are increasing rates and fees.
Part of the reason card companies may be doing this is because of new federal restrictions on credit card debt accounts. Through the Credit Card Accountability, Responsibility and Disclosure Act, card companies will not only be limited in their ability to raise interest rates, but will also have to review any increases.
As a result, card companies may have taken advantage of the fact that some of these new rules do not take effect until February and have already raised rates and fees. As a result, William Galvin, secretary of state for Massachusetts, recently sent a letter to a number of major card lenders in order to see if they have raised rates and fees.
Galvin said he believes that the rate increases go against the spirit in which Congress passed the Credit CARD Act, actions which he thinks go against honorable business practices.
Consumers who are dealing with increased rates may wonder what they can do in order to pay off debt. One option is a debt management plan, which may help lower interest rates on what people owe.
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