Consumers Being Squeezed By Credit Card Companies Prior To New Card Legislation’s Activation

Ever since President Barack Obama signed the Credit CARD Act last May 22 of this year, consumers have been getting hit by credit card term changes from credit card companies, all of which were specifically meant to increase the profits of credit card companies regardless of the economic plight of American consumers.

The Credit CARD Act promised to bring comprehensive changes in the credit card industry which would have brought protection to American consumers against the predatory tactics of major credit card companies. Among other things, the Act would have put a stop on arbitrary interest hikes, unfair fees and obscure credit card agreement language. All of this would have assured consumer protection were it not for the fact that lawmakers decided to delay the activation act. A majority of the provisions of the Credit CARD Act were scheduled for enforcement early next year.

As things stand now, credit card holders are seeing very high interest rates and fees, new fees, low available credit and whatnot. According to the Federal Reserve, in the majority of cases, credit card companies will or have already tightened their standards and will continue to do so. Credit cards are becoming more expensive for those who own them and are getting harder to get for those who do not.

According to the Federal Reserve’s survey, credit card companies tightening their standards for credit cards have gone down from peak numbers in the past three months. However, credit card companies had already issued tight standards in the preceding months. The survey by the Federal Reserve, the “October 2009 Senior Loan Officer Opinion survey on Bank Lending Practices”, took into account fifty seven domestic banks and twenty three branches and agencies of foreign banks in the U.S.

The survey also states that, even as the activation of the bulk of the Credit CARD Act approaches, 75% of credit card companies do not expect to be compliant with the provisions of the Credit CARD Act until the February 2010 activation of the legislation.

Consumers are fast getting fed up with the actions of credit card companies. There is now a loud clamor for faster activation of the Credit CARD Act. Nancy Osborne, the chief operating officer of the Santa Clara, CA based Erate.com, a company that publishes financial information and tracks interest rates, said, “ As a result of consumers voicing their frustration, there’s serious discussion in Washington to accelerate the effective date of the credit card reform legislation”.