Nov 23, 2009
Just when you thought things cannot get worse, it did. Millions of Americans who are already struggling with the economic downturn and credit card debt have received notice that their credit card companies are raising interest rates – just in time for the holiday season. Many have seen their rates doubling, some even tripling. Cash-strapped individuals are looking at more debts ahead.
The situation is worse for certain individuals. Those who are used to longtime fixed rate will see their interest rates soar to double-digits because of the shift to variable rates. Most of the activities such as giving consumers lower credit limit, interest rate hikes, and the increase in minimum monthly due are tied to the new federal policies set to start in late February. These measures will hinder banks from continuing their predatory practices.
As a result, the trend these days pose very little options to the ordinary consumers. According to customer surveys, consumers are now faced with unpleasant alternatives ranging from closing accounts to accepting tight credit terms. Rasmussen Reports conducted a survey which also revealed that around 50 percent of its respondents experienced rate hikes in the last six months.
At a time when banks are seen as the villain, these measures are greeted with censure. The legislative director of Consumer Federation of America said that “It seems like they’re hurting the customers they need the most.” Right now, the industry has already lost the trust of clients but they are still coming up with tricks to milk more money from struggling clients.
One method that was uncovered includes making notices of interest-rate hikes look like junk mail. Their purpose is to encourage consumers to throw these letters out without reading them. Everyone is affected by the current trend – whether you have a poor credit rating or the highest.
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- Credit Card Reform – New Law Effective Tomorrow
- The New Reality About Consumer Spending Habits
- More Irresistible Credit Card Perks – But You Actually Pay for Them
- Improve My Credit Score – Revisited
- Credit Card Traps – How to Avoid Them
- Credit Card Rate Changes – What Can I Do?
- Credit Card Index – Better Last July