Banks Have Found Ways Around CARD Act
Back when the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act was signed, many heralded it as a big win for consumers. Finally someone was doing something to look out for the best interests of the consumers. Now that a little time has passed and the effects of that legislation can be looked it, it seems as if it as in fact backfired. Many people know find themselves worse off than before. Its almost as if the credit card companies simply laughed at that attempt to reel in their practices.
Credit card companies make a lot of money for a reason, let’s just face it. Their smarter than the people that are using their services. It’s a cash cow and they know all the tricks to keep that cash cow plugging along. As soon as new legislation is passed, they just figure out an end run around it.
Over at MSNBC there’s a blog that I enjoy a whole lot entitled The Red Tape Chronicles, if you’ve never checked it out, I encourage you to take a gander. On that blog there’s a post about this issue that I liked a whole lot entitled “Consumer Groups Blast Banks Card Tricks”. In it the recent announcement from the consumer advocacy group Consumer Action is discussed. This group released this week a list of some of these tricks and changes that the credit card companies have instituted since the inception of the CARD act.
Some of the practices they mentioned include….
* Bank of America’s Platinum Plus Visa, which increased interest rates by up to 46 percent.
* Capital One, which increased its penalty interest rate by 6.25 percent.
* Citigroup, which began collecting annual fees ranging from $30 to $90.
* JP Morgan Chase, which increased its balance transfer fee to 5 percent.
* JP Morgan Chase, which increased minimum payments from 2 percent to 5 percent. When consumers call asking for relief, they are told the only way to reduce their monthly payment is to accept a higher interest rate.
* HSBC, Chase, American Express and Bank of America, all of which have all closed accounts without warning.
Its really a tough situation that consumers know find themselves in. The credit card companies are simply going to make their money no matter what. New legislation can be passed, but its almost impossible to addresse every single loophole and rate that they can think up.
“The ink was barely dry on President Obama’s signature of the CARD Act when banks started hitting consumers with higher fees and charges,” said Travis Plunkett, legislative director of the Consumer Federation of America. “Congress can’t write laws fast enough to keep up with these tricks and traps.”
The reason this type of thing is not working is because legislation is simply not the answer. People need to make these credit card companies start wooing consumers once again. By staying away from credit cards for awhile we might be able to put a scare into the credit card companies to the point where they’d start treating their customers with a little respect. At this point they do not respect their customers, that’s shown by their actions.
The problem is that we are so tied up and integrated with the credit card companies and our lives that its basically impossible to get out. Its as if the U.S. economy has made its bed and now it has to sleep in it. Its not a very good situation for anyone, except the credit card companies.
As with any economic situation, what its going to take is a slow gradual change. That becomes extremely hard when what were trying to change here is not only a behavior but indeed a culture dependent on credit cards. If your in debt now, you have no power. Power over your actions can never be achieved while leaving in debt. These debtors will use that power to reign over you. I encourage everyone to do whatever they can to get out of debt. It is only by being debt free that one can truly have freedom. Then when you don’t NEED the credit card companies anymore, you become the one with the power. Wouldn’t it be nice to see credit card companies bending over backwards to serve your needs. I’d love to see that day!
