Banks Scramble Before Credit Card Reform Kicks In

Rep. Betsy Markey of Colorado proposes that reform take effect sooner.

Rep. Betsy Markey of Colorado proposes that reform take effect sooner.

There’s no doubt the recent Credit Card Accountability, Responsibility and Disclosure Act of 2009 which was passed this year is beneficial for the long run. But unfortunately for now, it is actually hurting consumers.

The Problem
Banks left and right have been scrambling recently to jack up interest rates while they’re still permitted to do so. Almost all of us have been a victim of this in one way or another. I have cards with several different financial institutions and all but one have had their APRs shoot up since the reform was passed. I currently have no balances, but I can only imagine how devastating this would be if I did.

The Solution
Recently Representative Betsy Markey (D-Colorado) along with lawmakers made requests to the banks to voluntarily stop their rate hikes for now. Why? Well due to this rampant practice of out of the blue rate jacking, lawmakers are deciding whether they should change the date the reform goes into effect. Right now creditors have until February 22nd, 2010 – at that time, it won’t be so easy for them to raise a customers rate.

Will this be a solution? In my opinion, it could make matters worse. If congress is successful in changing the compliance date to December 1st, that would mean all of the banks would scramble to raise rates over the next few weeks (while they’re still permitted to do so). Hopefully, I’m completely wrong about this and they don’t do that if this change takes place.

Discover Sets An Example
Discover Financial has stepped up to the plate and voluntarily decided to freeze rates until the reform takes effect, whether that be in December or in February. So if you have a Discover credit card, you’re safe. Now, if only everyone else would follow their lead!

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She’s just trying to angle herself for bigger and better things.