Knowing that new rules take effect February 2010 that will restrict their ability to raise rates on existing balances, credit card companies are rushing to raise interest rates on existing balances for the vast majority of their customers, even those with excellent payment histories. As a result, credit card holders who may have been paying 9% on their credit card balances are now having to pay’% or 29% or 39% or even more!
Currently a credit card company can raise a consumer’s interest rate, even on existing balances, at any time and for any reason (or no reason). Credit card companies have long been able to arbitrarily and unilaterally change a consumer’s interest rate. However, under a new law that takes effect in February, The Credit Card Accountability Responsibility and Disclosure Act of 2009, credit card companies will find their ability to raise rates on existing balances restricted although they can still raises rates on future purchases by providing a 45 day notice.
Usury laws are laws that limit the rate of interest that a consumer can be charged on financial transactions. Virtually all states have usury laws. However, credit card companies are not covered by state usury laws and therefore have no limit on the rate of interest they can charge consumers. Interest rates in excess of 40% are being charged by credit card companies!
Having been hit with the double whammy of significantly rising interest rates and the corresponding rise in minimum payments, many American consumers now find themselves with huge credit card problems. Some have to choose between paying the credit cards or paying the rent or perhaps even feeding their families. Wouldn’t it be in the best interest of the credit card companies to work with people having credit card problems? One would certainly think so although that has not been the case historically. Credit card companies use consumer financial difficulties as an excuse for dramatic interest rate and minimum payment increases, compounding the consumer’s financial difficulties rather than alleviating them!
One would think that credit card companies would find it in their best interests to work with consumers having credit card problems. Historically, however, that has not been the case. When a consumer begins to have financial difficulties, that’s when he or she finds credit card interest rates and minimum payments rising dramatically causing greater financial problems!
While the banks have been helped, the consumer is left to go it alone. Consumer credit card problems are a fact of life and will continue to be so the foreseeable future. A record ONE BILLION dollars worth of credit card defaults are expected for 2009 with high default rates continuing into 2010.
American consumers’ credit card problems are going to continue for the near future. Credit card defaults for 2009 are expected to hit almost ONE BILLION dollars with high default rates continuing in 2010. The banks have been bailed out; who will bail out the consumer?
Bank profits have not really been affected by consumer credit card problems. Thanks to taxpayer assistance, the big banks are again profitable. Credit card defaults were never a big factor in the banks troubles. American consumers pay more than 90 billion dollars a year in interest and fee payments to the banks issuing credit cards.
While credit cards bring enormous profits to the banking industry, they are highly unfair and financially detrimental to consumers. According to a CNN Money table, a consumer paying on a $10,000 credit card debt at’% but only making the minimum payments will find that it will take 513 months of payments totaling over $26,000! As the bank can change the interest rate at will and there is no cap on the interest rate it can charge, the consumer often becomes trapped in a downward spiral of debt from which escape is difficult if not impossible! What is the consumer with credit card problems to do?
Are you one of the millions of Americans burdened with unmanageable credit card debt? U.S. Consumer Credit Card Debt now totals almost ONE TRILLION DOLLARS! Real help is attainable with this one of a kind program that delivers real results! This is NOT bankruptcy or debt settlement.
