Consumers beware: Credit card interest rates are creeping higher
Yes, that fine print on the notice from your credit card issuer is correct: Interest rates for many cards are climbing perilously close to 30 percent.
Perilous, that is, for the consumer who carries a balance.
The reason, reports Nancy Crawley in her column in Sunday's Grand Rapids Press: "Banks began boosting rates after President Barack Obama signed the Credit CARD Act in May, making it harder for issuers to hike rates, effective Feb. 22."
So now card issuers are trying to cash in while they can.
Customers who don't carry a balance won't see a difference, except in the fine print on their statements.
But customers who do carry a balance will pay more on existing and new balances.
And in the meantime, even consumers who don't carry a balance may not be safe forever from increased fees.
A recent article in USA Today cited reports from some card issuers that they'll start charging consumers who pay balances down could start being charged fees up to $129 per year, depending on how much activity they generate on their card.
Paula Gardner is Business Director for AnnArbor.com. Follow her on Twitter or call (734) 623-2586.
Comments
ownrdgd
Wed, Oct 28, 2009 : 4:14 p.m.
Pay the balance every month and not the mininum payment and you don't have to pay high interest.Myself and lots of other people who have had a credit card for 25 plus years have NEVER paid a dimes interest.
Macabre Sunset
Tue, Oct 27, 2009 : 10:40 a.m.
Yes, each party has its friends in corporate America. Bush had his, Obama has his. However, no one has a gun to Joe Consumer's head when it comes to spending more than he has. About half of foreclosures are related to medical bills, not most. It's still a huge problem. We need health care reform, not Obama's welfare plan for insurance companies. But, still, this is all related to big government and the decision to extend loans where they shouldn't have been extended. Even a good percentage of the foreclosures related to medical costs could have been avoided without the government's poor decision to force lending to people who shouldn't be buying.
David Briegel
Tue, Oct 27, 2009 : 6:18 a.m.
His corporate friends? You're kidding, right? These people rent both parties! Actually, Hank Paulson was a criminal! He let his competitor go under and then bailed out AIG thus benefitting Goldman Sachs to the tume of 15 billion. No small chump change. So much for our celebrated free market. Why weren't they allowed to fail like the regular guy? It's really quite simple isn't it? These people knew what they were doing, got bailed out and are running the same criminal enterprise today that they were then. Are you ready to bail them out again? Most of the bankruptcies and foreclosures were related to health care expenses. I don't understand how 31 percent should be legal. Oh, the bankers wrote the rules! And those poor bankers had a gun to their head to make those loans?
Macabre Sunset
Mon, Oct 26, 2009 : 10:12 p.m.
David, get a grip on yourself. No one is forcing you to borrow at a high interest rate from your credit card company. And these rates don't compare to a loan shark's. While I agree with you that Obama's "stimulus" bailout went to his corporate friends rather than the people, I don't see the foreclosures as stealing. I see them as the government encouraging loans. In fact penalizing companies that didn't participate in the sham. People should never have qualified for or even accepted those loans. There was never much hope they would be paid off.
David Briegel
Mon, Oct 26, 2009 : 8:49 p.m.
Citizens of America are just as well off going to Bennie the Bookie and Louie the Loan Shark for their "banking"! The Titans of Industry stole about 5 trillion dollars and not one went to jail. They are foreclosing and bankrupting millions of Americans who got no bail out! White collar crime pays!
Macabre Sunset
Mon, Oct 26, 2009 : 12:54 p.m.
Sounds like a great business opportunity for credit card companies looking for new business from people who do pay their balances immediately. Skim those with the highest credit scores away from the others. Less risk, learn to live happily on merchant fees. Obviously, there's still a lot of money in the credit card business, or we wouldn't still have non-stop advertising on television from the companies. Meanwhile, it's an example to the Democrats that a bigger government does not necessarily mean more consumer protection, or anything but higher fees and less service for taxpayers.