Rates have increased 16 percent ahead of CARD Act, says survey
In anticipation of new rules as part of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 to help consumers get out of debt, many credit card companies have responded by boosting their rates.
According to a new survey released by BillShrink, from February 2009 to February 2010 creditors raised their rates by an average of 16 percent. Additionally, one-third of the 150+ cards included in the survey had their rates bumped up by 20 to 30 percent.
The high rates were only offset by Chase and Wells Fargo, which were both found to have decreased their rates the least.
“We’ve been carefully monitoring rate changes and compliance for over a year and have seen issuers sneak in rate hikes to brace for the new regulations, rather than using the grace period to phase out prohibitive practices,” said Samir Kothari, co-founder of BillShrink. “After February 22, we expect to see more cards with annual fees, as well as a rise in other charges like balance transfer fees , cash advance and even inactivity charges.