Earlier Activation Of Credit CARD Act May Be On The Way

Consumer elation over the passage of the Credit CARD Act was quickly ended when credit card companies started raising interest rates, adding new fees and cutting available credit before the Act could stop them from doing so.

During the making of the Credit CARD Act, credit card companies argued that they needed a considerable amount of time to adjust to the requirements of the Credit CARD Act. Lawmakers agreed and decided on a delayed activation for the Credit CARD Act. While some of the legislations were set to be activated earlier and later, the bulk of the Credit CARD Act will go live on February of next year, 2010. That may soon change, however.

Ever since the passage of the Credit CARD Act, credit card companies have made any changes that would actually conform to the legislations in the Act. In fact, according to research done for the Safe Credit Cards Project of the nonprofit organization Pew Charitable Trusts, credit card companies have instead continued with the practices that will specifically be banned by the Credit CARD Act and, in a lot of cases, have even intensified them.

Consumers have naturally been hit badly by what the credit card companies are doing. Credit cards now cost even more than they used to and, in a time of economic instability and rising unemployment, consumers are in a very delicate position if they find themselves relying on their credit cards. In fact, a lot of credit card holders are already in deep financial trouble owing specifically to the new term changes being introduced by credit card companies.

Lawmakers have been aware of the situation and have now decided to act on it. The House of Representatives recently moved to have the effective date of the Credit CARD Act changed to an earlier date. According to Nancy Pelosi, House Speaker, the Credit CARD Act’s effective dates were meant to allow credit card companies enough time to prepare themselves for the new legislations. Instead, credit card companies used the time to hike up interest rates and fees in anticipation of the Credit CARD Act. This prompted the recent action of the House.

“The credit card companies proved that treating their customers fairly takes a back seat to the blind pursuit of profit. This is why the House, with an overwhelming bipartisan vote, acted to protect consumers against abusive and predatory credit card practices that don’t belong in a fair, transparent and responsible consumer financial marketplace”, the House Speaker said.

The bill is yet to pass in the Senate, however and it is still in debate in Congress. In the meantime, a new legislation from Senator Chris Dodd proposes to freeze current rates and fees until the activation of the Credit CARD Act.