Fed to Crack Down on Credit Card Industry…Finally
The Federal Reserve has finally announced that they will crack down on “unfair and deceptive” practices within the credit card industry. Finally.
After a lot of talk and interest rate cuts the Fed will finally fight for the rights of consumer…particulary those in debt. In the US where saveings rate ranges from the negatives to 2% (China is at 35% for comparison) most households are living in debt and many in the form of credit card debt. The article states that credit card debt in the US exceed $850 billion with average rates around 18%. That’s a lot of interest payments.
Some items that will be regulated are:
- Payment allocation: the art of applying payments to lowest APR balances first
- Low grace periods: the time you have to pay until interest starts accruing
- Crazy rip off fees for over limit accounts
- and “deceptive offers”: wow, who would’ve thought that deceptive offers should be eliminated?
It’s still early to see what gets passed to law and how the monolith of an industry fights back. Expect a prolonged and heated battle and no real changes for some time to come.
Tags: Fed, Credit, Credit Cards
I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.
Tim Ramsey