While the idea of financial reform promised relief for many Americans, those that carried a large amount of credit card debt before it took effect may have found that things actually got worse.
According to a report from the Coloradoan newspaper in Fort Collins, many that rely on a fixed income and have mountains of credit card debt have found their interest rates increased considerably between the time when the Credit Card Accountability, Responsibility and Disclosure Act was announced to when it was finally enacted. That left consumers who were unable to make large monthly payments looking at ever-mounting numbers above the principal.
Vickie Bajtelsmit, a Colorado State University finance and real estate professor, told the paper that the new laws have made credit card lenders less predatory with vulnerable new borrowers, but that didn’t help those with existing debt. Attempts from the House of Representatives to enact a freeze on interest rates ahead of the bill died in the Senate.
Many Americans face credit card debt because they often only pay the minimum on their bill. Giving lenders as much as possible above the lowest allowable amount is a great way to reduce the total debt as well as the amount of interest charges an account incurs.