Credit Card Holders Finding Agreement Changes Painful

At the moment, credit card holders are facing many challenging changes being made on their credit card agreements by their credit card companies. Most of these changes mean that keeping and using credit cards is getting more and more risky and expensive for credit card holders. For the majority of credit card holders, these new changes are financially painful.

Consumer interest group president Mike Calhoun said, “Top credit card issuers have chosen to increase fees and raise rates for more customers, including those in good standing. These arbitrary, one-sided changes extract funds from borrowers unfairly. Consumers could better use the money for savings or to purchase goods and services that would stimulate the economy”.

Stephanie Jacobson, spokeswoman for Chase, said that credit card companies are legally allowed to adjust the credit card interest rates in response to changes in the economic climate or any regulatory or legal requirement. She said, “If we do increase a customer’s (annual percentage rate’), cardholders have the right to decline the change, close their account and pay off the balance at the lower rate over time”.

Many credit card holders are finding the actions of credit card companies to be very oppressive. As a result, consumer satisfaction over credit cards has taken a nosedive. The Federal Reserve recently released data supporting the growing trend of credit card dissatisfaction among consumers.

According to data from the Federal Reserve, in July consumer credit dropped by 9%. This is the steepest drop the Federal Reserve saw since it started keeping records in 1943. The Federal Reserve data also showed that, last February, total credit card debt began shrinking on year-to-year basis. The Financial Times, quoting Investors Service of Moody, said that part of the reason of the drop is the comprehensive credit cutting being done by banks in an attempt to cut their exposure.

Consumer Reports said that consumer anger against credit card companies is quite palpable. According to them, since January 2008, 32% of credit card holders paid off and closed their credit card accounts. Half of these closures were in response to credit card company actions such as credit rate hikes, credit limit cuts and the introduction of new fees.

However, Center for Responsible Lending spokeswoman Kathleen Day doubts that the current actions of credit card companies will really hurt their image or reputation among credit card holders. She said, “People feel that no matter which credit card company they go to, they’ll have the same tricks”.