The Credit Card Squeeze is On for US Consumers
In anticipation of the new rules taking effect in February of 2010 that restrict the ability of credit card companies to do this; credit card companies have rushed to raise interest rates on existing credit card balances. These rate increases have been implemented across the board, even on long term customers with excellent pay histories. Customers who were paying 9% on their credit card balance may now find themselves paying’%, 29%, 39% or even more.
Credit card companies have long been able to arbitrarily and unilaterally change a consumer’s interest rate. In other words, at any time and for any reason (or no reason), credit card companies can change the amount of interest they’re charging on a credit card, even on existing balances. Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, their ability to raise interest rates on existing balances becomes limited, a provision that takes effect in February 2010. However, rates can still be raised on future purchases with a 45 day notice.
Most states have usury laws that put a cap on the rate of interest consumers can be charged in financial transactions. However, credit card companies are exempt from state usury laws meaning that credit card companies can charge the consumer any interest rate they want to charge. Credit card interest rates in excess of 40% are now being charged to some consumers.
Having been hit with the double whammy of significantly rising interest rates and the corresponding rise in minimum payments, many American consumers now find themselves with huge credit card problems. Some have to choose between paying the credit cards or paying the rent or perhaps even feeding their families. Wouldn’t it be in the best interest of the credit card companies to work with people having credit card problems? One would certainly think so although that has not been the case historically. Credit card companies use consumer financial difficulties as an excuse for dramatic interest rate and minimum payment increases, compounding the consumer’s financial difficulties rather than alleviating them!
One would think that credit card companies would find it in their best interests to work with consumers having credit card problems. Historically, however, that has not been the case. When a consumer begins to have financial difficulties, that’s when he or she finds credit card interest rates and minimum payments rising dramatically causing greater financial problems!
While the banks have been helped, the consumer is left to go it alone. Consumer credit card problems are a fact of life and will continue to be so the foreseeable future. A record ONE BILLION dollars worth of credit card defaults are expected for 2009 with high default rates continuing into 2010.
American consumers’ credit card problems are going to continue for the near future. Credit card defaults for 2009 are expected to hit almost ONE BILLION dollars with high default rates continuing in 2010. The banks have been bailed out; who will bail out the consumer?
Credit cards are unfair and unjust to consumers! They are highly profitable to the banks at the expense of the consumer. According to a CNN Money table, a consumer paying on a $10,000 credit card debt at’% but only making the minimum payments will find that it will take over 42 years of payments and cost more than $16,000 in interest (in addition to the $10,000 principal)! Since the bank can change the interest rate at will with no limit on the rate of interest it can charge, consumers become trapped into a lifelong web of debt from which there is no escape! Credit card problems – what is a consumer to do?
While credit cards bring enormous profits to the banking industry, they are highly unfair and financially detrimental to consumers. According to a CNN Money table, a consumer paying on a $10,000 credit card debt at’% but only making the minimum payments will find that it will take 513 months of payments totaling over $26,000! As the bank can change the interest rate at will and there is no cap on the interest rate it can charge, the consumer often becomes trapped in a downward spiral of debt from which escape is difficult if not impossible! What is the consumer with credit card problems to do?
Struggling with Credit Card Debt? Consumer Credit Card Debt now totals almost ONE TRILLION DOLLARS in this country and negatively affects millions of families! Get help without bankruptcy or debt settlement! Unique program that delivers real results!
categories: Consumer Credit Card Debt,credit card debt statistics,credit card bankruptcy,Credit card problems,Credit card debt collection,average credit card debt,credit card debt law
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