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We've been hearing for months about credit card reform slowly making its way to us. As cardholders wait for new rules to protect them from systematically unfair and deceptive practices, card issuers scramble to jack interest rates and fees before new rules go into effect. A study by the Pew Charitable Trusts finds that as of July, 2009, 100% of credit cards from the nations 12 largest banks were using "unfair or deceptive practices" under Federal Reserve guidelines, and that none would meet the requirements which will take effect next year.
A few other highlights from the study:
Many might be asking: but what about all that credit card reform we heard about?
Well, the CARD Act (Credit Card Accountability, Responsibility, and Disclosure Act of 2009) was passed by Congress and signed by the president, but the majority of new rules within it won't go into effect until February of 2010 or later. Until then, it looks like credit card issuers (particularly banks) are going for the throat.
The silver lining? Cards from credit unions proved less prone to unfair or deceptive practices and did a much better job complying with the changes that are coming. They too have late fees, overlimit fees and penalty interest rates, but these costs are generally lower on the credit union cards.
What can you do besides watch your card company like a hawk? Go to Consumer Reports' website to tell your Congressperson to pass legislation pushing up the date for the new credit card rules to December 1, 2009.