When Congress passed the Credit Cardholders' Bill of Rights last May, we called it a long overdue response to the abuses of predatory credit-card issuers who have used every trick in the book to extract money from cardholders. As it turns out, we underestimated the greed and craftiness of the credit-card industry.
In a well-meaning effort to give issuers time to adjust their practices, Congress set a compliance deadline of next February. Instead of seeing the law as a clear signal that consumers are fed up with abusive practices, however, leading bank card issuers used the time to squeeze more money from the public.
Not only have they done next to nothing to stop practices deemed unfair by the new law, but some of the practices that hurt consumers the most have become more widespread.
According to a report issued Wednesday by the Pew Charitable Trusts, "credit card interest rates rose an average of 20 percent in the first two quarters of 2009, even as banks' cost of lending declined." Every credit card offered online by leading bank card issuers was tied to rules and conditions that will be outlawed once the compliance date arrives, Pew said.
Among other things, nearly all of the bank cards allowed issuers to increase interest rates on outstanding balances and permitted issuers to apply payments in a way the Federal Reserve found likely to cause substantial financial injury to consumers.
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