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« Deflation: What Happens When Prices Fall? | Main | Iowa prediction market »
Credit cards hiking rates and fees
The Wall Street Journal has a good story about credit card companies hiking rates and raising fees. The credit card business is ripe for reform.
The industry argues against new regulations by saying the impact will be to raise rates and make cards more expensive. So what? It's happening anyway. At least consumers would get better information and transparency when it comes to credit cards with reform. This way consumers can easily shop around for the best card. Transparency makes markets work better. The reason why credit card companies don't like reform is that it would make the market more competitive, not less.
And can someone explain to me why cancelling a credit card because the issuer has raised the interest rate, fees and penalties should slice into your credit score? Why does FICO penalize consumers for being savvy with their credit?
The Wall Street Journal in the article has a nice chart summarizing the changes:
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Comments (2)
November 25, 2008 1:10 AM
Ge Money bank is closing lots of consumer accounts that are open but have no balance, and lowering credit limits for open accounts with balances. examples Lowes Credit Card, Sam Levitz Furniture Credit Card, Peach Direct credit card
Salute Visa Gold (Union Trust Bank) is apparently ceasing all credit card operations and closing all accounts according to the letter they sent out.
reading blogs on Fico.com and other sources reveals that numerous customers have received the same letters I have.
February 7, 2009 11:32 AM
On February 6, 2009 I received a mass mailer from Capital One raising my rate a full 10 percent and changing my fixed rate card to a variable card. I have been a customer for more than 6 years and make my payments on time, usually paying the balance in full. I guess my FICO score is going to hit the skids because I closed this account and will be closing my saving account with them too.
The credit industry seems to love to bite the hand that feeds it and our law makers don't seem able to regulate effectively. I guess lobbyist know which palms to grease.