The credit card industry has become a favorite punching bag for consumer groups and lawmakers, who accuse the card issuers of doing everything in their power to raise rates, charge new (and hidden) fees and punish card holders with unjust policies.
The Federal Reserve Board has taken notice. It's proposed requiring issuers to disclose clearer information about rates and fees and 45 days' (instead of 15 days') notice before they could raise rates. Congress has stepped in, proposing bills to restrain some of the more widely criticized policies.
The credit card industry says it welcomes better disclosure but opposes curbs on its ability to raise fees or rates or change policies. Consumers have yet to see any significant easing of fees and rates that have sparked outrage.
The credit card industry has entered a quiet period since Congress set its sights on credit card practices. Still, late fees and over-the-limit fees have remained steady across the board.
The credit card industry is open to the idea of making policies easier to understand. But card issuers oppose any steps that would restrict them.
In its defense, the credit card industry contends that credit cards are fairer now than before 1990, when most issuers charged a fixed rate of about 20%. "There was less access to credit in America and higher interest rates," says Ken Clayton of the American Bankers Association. "Now, some 75% of American families have credit cards at lower interest rates. And the ability to measure risk has allowed us to target various markets that in the past may have not had access to credit."
Many consumers argue, though, that credit card disclosures are confusing and that so many penalty rates and fees can apply, it's hard to know how to avoid them.
For more resources about or about and especially about please review these pages.
