11/08/2009 - Clear out the holiday catalogues, the Christmas cards and the coupons, and your mailbox may look less than festive. Now that the credit card industry is required to warn you about any changes they're planning, you should be scrutinizing what you think is only junk mail.
When you open that mail, you may discover that your interest rates are rising, or switching from fixed to variable. In addition, some card issuers are instituting higher balance-transfer fees and raising teaser rates – or eliminating them all together. The warnings come courtesy of sweeping reforms required by a law enacted this spring that is being phased in over the next year.
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A study by The Pew Charitable Trusts released last month found that advertised rates on about 400 credit cards this summer had jumped as much as 23 percent. In addition, the study reported that many issuers were shifting customers from fixed to variable rates, which would ease some of the notification requirements.
"It's difficult to say why this is happening," said Nick Bourke, manager of the Safe Credit Cards Project at Pew. "I think it's clear that issuers are responding to the continued difficult economic times. . . . I think it's also possible that the timing has something to do with getting these changes into place before the new law takes effect."
Read the full article The Small Print Looms Larger on the Washington Post's 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Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on PewHealth.org.