Issuers of credit cards are thinking up innovative ways to get around a new credit law, which was designed to help consumers by curbing abusive practices.
The Consumerist gives these examples of new tricks being used:
- First Premier Bank charges a $95 processing fee before the card is used, to get around a rule limiting the fees that can levied on an account within its first year.
- Citigroup raised APRs in advance of the law going into effect, and then gave partial refunds on finance charges for on-time payments, circumventing the provision that limited raising rates for late payments.
- Chase raised the monthly minimum on some customers who were carrying balances on cards with promotional 2 to 5 percent rates, unless they agreed to give up the low rates. The CARD act places obstacles on raising APRs, but largely allows for minimum payment increases.
Consumers need to be sure to read every piece of information that comes in the mail about their credit cards. They may be subject to new fees and interest rate increases. If consumers are signing up for a new credit card, they need to read the terms and conditions carefully.
Take a look also at “Watch Out! Here’s What’s Not Covered by the CARD Act” on Defend Your Dollars.org for information on practices that consumers need to watch out for.
