Interest Rate Freeze for Credit Cards?

One of the unintended consequences of the Credit CARD Act passed in May was that credit card issuers have been rushing to tinker with terms before the February deadline. Consumers are getting the shaft on this as credit card issuers take this chance to jack up interest rates and add fees just because they can. At this point, across the board increases to fees and rates has almost nothing to do with an account-holder’s reliability, risk factor or credit score.

While one might argue that this was a fairly obvious consequence, the fact remains that Congress gave credit card issuers plenty of time to take advantage of consumers before the rules take effect. But now, as consumers protest interest rate hikes, Congress is considering moving up the time table for implementation. And Senator Christopher Dodd is proposing an interest rate freeze.

While an interest rate freeze would be nice, the fact of the matter is that most of the damage has already been done for most people. The freeze would bridge the gap between now, and when the Credit CARD Act goes into effect, whether that ends up being December or February, forcing credit card issuers to justify interest rate increases.

Image source: Daylife