Credit card firms hurry to raise rates- Some top 30% as new rules loom

[Orwellian_Ghost]

Credit card firms hurry to raise rates
Some top 30% as new rules loom
By Megan Woolhouse
Globe Staff / November 6, 2009


Credit card companies are rushing to increase interest rates to historic highs of more than 30 percent, cut credit limits, and add new fees, even for customers who pay their bills on time.

Lenders are making the moves in advance of tougher federal regulations for credit cards scheduled to take effect on Feb. 22. The new rules will limit how companies can modify credit card agreements, specifically prohibiting them from retroactively raising interest rates and fees on existing balances.

US Representative Barney Frank, the Massachusetts Democrat who chairs the Financial Services Committee and is a leader in the effort to revamp credit card policies, said banks have “abused’’ the nine-month period granted them to re-tool their practices.

“I didn’t think they would be as blatant as they were about doing this,’’ he said. “There’s no justification for raising rates retroactively. This is really just a way for them to make more money.’’


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http://www.boston.com/business/personalfinance/articles/2009/11/06/credit_card_firms_hurry_to_raise_rates/

[The Magistrate]

1. Anyone Who Did Not Expect This During the 'Grace' period, sir, Has Not been Paying Attention....

"When a man sticks up a banker and demands his wallet, the banker will hand over his trousers too, because it never occurs to him a man's greed could have a limit."

[jasi2006]

7. Can a new law be passed to set rates back to pre-vote rates?

Can there be a windfall profit tax against the credit card companies especially those owned by banks thatreceived bail out money? What can be done in addition to consumers backlash? how about no one paying their bill...what would happen if all BOA credit card holders refused to pay?

[The Magistrate]

12. A Law Could Be Passed To Regulate Rates, Ma'am, At Least In Theory

So could a windfall profits tax. It might need a new Congress, of course....

Hard to say what the results of a real 'general strike' by debtors would be. Under law, people do owe the money, and are obligated to pay the interest. Suits for collection would be sustained, but whether the courts or the politicians would be up to coping with tens of millions of such cases is beyond guessing.

[bullimiami]

2. usury is a criminal offense even in the bible yet in this 'god loving' usa it is not. shameful.

[mediaman007]

3. I don't get it. When a customer borrows money from an organization, it should

be a contract. The cost of the loan is established when the loan is made. How can the lender negate the rights of the borrower, if the borrower has fulfilled the terms of the contract?

[The Magistrate]

5. Because The Fine Print Of the Contract says It can, Sir

And the courts uphold the deceit.

[regnaD kciN]

8. Because, unfortunately...

...the contracts people signed on credit card agreements (and who thought to actually read them back then?) give the lender the right to re-negotiate the rate, including rates on pre-existing balances, any time they want.

The new bill changes that (rate hikes can only apply to new purchases, not existing balances, unless the holder defaults on the account) but, as has been noted already, that bill won't take effect for another 3+ months.

[CurtEastPoint]

4. I got a note from Amex today (card I don't use): 'Penalty' APR = prime + 23%

This is just f'ing outrageous and need to stop... now. Can it? Does Congress have the balls to do it? Methinks not. Buncha pussies.

[WillieW]

6. Go on strike - don't pay your bill.!

[SmileyRose]

9. Wasn't that the whole point of the grace period?

[and-justice-for-all]

10. I got rid of my cards, so they can kiss my ass!

[cynatnite]

11. I'm determined to get our credit rating higher without a credit card. n/t