05/22/2009 - The new credit card law is receiving widespread kudos as a victory for cardholders over the lenders that impose "gotcha" fees and penalties with scant justification and little notice.
Indeed, an industry that has been virtually unregulated will now be reined in in many ways, to customers' benefit. Interest rates no longer will be allowed to be raised retroactively if you pay your bills. Terms will be clearer, over-the-limit fees curtailed and rates fairer.
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The new regulations put no restrictions on fees for balance transfer, cash advance or late payment. All are likely to rise, as foreshadowed by Bank of America's and Discover's plans to boost their balance transfer fees to 4 percent from 3 percent on June 1.
Being 60 days late could be especially costly for consumers. Currently card companies impose penalty rates averaging about 28 percent, or double the average standard rate. But that could rise to 30 or 35 percent as the companies scramble to make money where they can, said Nick Bourke, manager of the Safe Credit Cards Project at the Pew Health Group.
Read the full article Credit Card Law Has Some Unplanned Booby Traps, Including Higher Rates, Fees, Tighter Credit on the Los Angeles Times' Web site.
Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on PewHealth.org.