Using Credit Cards for Holiday Shopping? No help from Congress…
A congressional effort was supposedly in effect to help holiday shoppers who are picking up the tab with their credit cards this season, however it looks like this proposed law will be pushed back until February. This bill was aimed at thwarting the increase in APR hikes in which almost all major credit card companies are implementing.
A recent CNN article claimed that, “Tough new rules are already slated to go into effect on Feb. 22. The new rules, enacted by President Obama in May, prohibit banks from hiking interest rates on existing balances of fixed-rate cards unless the cardholder is two months late in paying the bill.
The article went on to state that, “interest rates on consumer credit cards have been increasing steadily since the second quarter of 2008, when rates were 11.88%. Since then, rates have shot up to 13.32% in the second quarter of 2009, according to Federal Reserve data.
The banking industry, which opposed the bills to move up the tougher rules, says its recent rate increases have more to do with accounting for the increased risk in lending to strapped consumers who can’t pay their bills.”
If you are putting the majority of your Christmas shopping on your credit card this season (and don’t expect to pay it off in full) you may end up by paying more interest than your current APR would lead you to believe.
December 1st, 2009 at 8:21 pm
On 12/1/09 I got notice from Chase Bank that all rates (purchase, balance transfer, cash advance and overdraft) on my platinum card account would rise to 24.24% as of 1/1/2010 (prime +20.99%). I never paid late in 8 years. Reason for the hike: “The principal factor we considered in amending your account is maintaining profitability on your account.” I don’t understand. Maybe they stole my stash of corn squeezin’s?
This kind of predatory posture only serves to DETER careless use of a card, and minimizes fees they can levy. Since I pay in full each and every month when the bill comes due, they’ll see as much “profitability” on my account at 24.24% (or 60.24%) interest as they do now, which is none! God BLESS financially responsible people, squeeze the rat-Shylocks out of the haypile! They are public enemies and menaces to society. I WORK for a living.
December 3rd, 2009 at 2:08 am
Nicely said Farmer Frank! Glad to see you back on the message board, your contributions are always right on the money!
December 3rd, 2009 at 6:11 am
Farmer Frank,
I love your saying “God BLESS financially responsible people….” This is half the reason the United States of America is in the situation we’re in now. From those that don’t pay their bills on time.