It might be unethical, probably even reprehensible, but credit card companies are reaching deep into their bag of tricks to raise card rates, hike fees, and squeeze as much cash out of card customers as they can.
A new report from the Pew Health Group’s Safe Credit Card Project has the skinny, with 400 credit cards from 12 of the largest U.S. banks still putting the screws to credit card consumers this holiday season.
The good news is that the window is closing. New credit card reform rules begin on Feb. 22, but that still gives card issuers about 60 days to wring as much cash from credit card companies as possible. “One hundred percent of credit cards offered online by the leading bank card issuers continue to include practices that will be outlawed once legislation passed in May takes effect next year,” says the Pew Report.
In other words, not one major U.S. credit card provider is backing off on rate and fee hikes in advance of the new credit card rules — thus giving their customers a break and raising the bar for good customer service in a tough economic climate. “Since passage of the Credit CARD Act, we found that credit card issuers have done little to remove practices deemed unfair or deceptive by the Federal Reserve,” says Shelley A. Hearne, managing director of the Pew Health Group, which wrote the report. “In fact, some of the most harmful practices have actually grown more widespread — not one of the bank cards reviewed would meet the legal requirements outlined in the Credit CARD Act, which is bad news for consumers.”
Evidently, card companies are betting that customers won’t notice — or at least won’t change card carriers just because of a few “under-the-wire” interest rate hikes in advance of next spring. With 100% of banks still raising card rates, they have little to worry about.