Find the best credit card offers online.The recent months have seen credit card terms get more and more strict and more biased towards credit card companies. According to the quarterly survey issued by the Fed, that’s not going to change anytime soon.
The Federal Reserve recently announced that banks are going to tighten their credit card terms as a reaction to the upcoming Credit CARD Act. Aimed to protect credit card holders from predatory credit card company tactics, the majority of legislation in the Act was to be activated on February next year, though the Act itself was signed last May of this year. The delayed activation was to give credit card companies a chance to adapt to the changes.
According to the quarterly survey of the Fed, many credit card companies believe that they will be raising the interest rates, reducing the credit limits and hiking annual fees for both prime and non-prime borrowers. Prime borrowers are card holders who have very good credit histories whereas non-prime borrowers are those whose credit histories are not so good. In addition, credit card companies also said that non-prime borrowers would soon have to contend with higher minimum credit scores, the Fed reported.
As a matter of fact, the Fed’s latest report is hardly a surprise for credit card holders who, for the past few months have already seen credit card companies hike up their interest rates to record highs, cut off their available credit to record lows and raised annual fees for those who had them and added annual fees for those who did not. Credit card companies are doing all of this in preparation for the coming activation of the Credit CARD Act.
Lawmakers are already acting on what the credit card companies and the House recently passed legislation that would activate the Credit CARD Act at an earlier date. Passage at the house does not guarantee the survival of the legislation. The legislation still has to pass through Congress. Unfortunately for credit card holders, the possibility of the legislation’s passage in the Senate is deemed to be low.
As this continue, businesses are suffering from difficulties in getting a loan and so are a lot of private individuals. This will most likely have a negative impact on the recovery of the economy. For policymakers in Washington, it is a delicate time. While they need to encourage credit card companies and other financial institutions to give lending a boost, they also have to discourage the relaxed credit standards that a lot of people believe played a major role in the economic crisis that the United States is in right now.
