Credit-Card Reform Succeeds in Ending Many Deceptive Practices, Pew Finds

Publication: Bloomberg

Author: Alexis Leondis and Margaret Collins

07/22/2010 - Credit cards offered online by the 12 largest U.S. banks have eliminated some of the most troublesome practices for consumers, the Pew Charitable Trusts said.

Increasing interest rates on existing balances for some infractions of the card agreements and applying payments to balances with the lowest interest rates first have ended, according to the report released today by the Philadelphia-based nonprofit organization. The study looked at almost 450 cards advertised by banks and credit unions and compared terms for cards offered in March 2010 and July 2009.

Many of the changes are the result of the Credit Card Accountability Responsibility and Disclosure Act, which takes effect in stages. Its provisions include limiting rate increases and requiring banks to apply payments to higher-rate balances. Most of these rules took effect Feb. 22; others began Aug. 20, 2009, and some, such as prohibiting excessive late-payment fees, will take effect Aug. 22.


“The good news is the market is much more transparent now and lots of the practices deemed harmful to consumers have gone away,” said Nick Bourke, director of Pew’s Safe Credit Cards Project, which began studying how the industry treats consumers in 2007. “There are still challenges.”

Read the full article, Credit-Card Reform Succeeds in Ending Many Deceptive Practices, Pew Finds, on the Bloomberg Web site.

Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on

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