And it’s about time. The usurius business practices of credit card companies hasn’t gotten enough attention from the media or from Congress. Over the last fifteen years, while the Fed dropped interest rates charged to banks to as low as 1%, the banks jacked credit card rates to around 30%.
There is no logic to this disparity other than the foolishness of American consumers (self included) who willingly ran up credit card debt instead living within our means.
The new rules are expected to prohibit credit card companies from raising rates at will, ban universal default (the unfair practice of changing card terms if a borrower misses payments on another bill), and eliminate double-cycle billing.
I wouldn’t get too excited, though. The banks and credit card companies have a lot of money to throw at Congress. They’re already warning that borrowing limits may be reduced and interest rates increased. Pardon me if I’m cynical about the government’s willingness to run counter to one of their biggest sources of campaign contributions.