Proposed Credit Card Reforms

Have you checked the interest rate on your credit card statement? What about the month before? Have you ever been late on one credit card and noticed your interest rate skyrocket on another?

What has been happening for some time now with credit card issuers is a Big Brother attitude. They are very interested not only in your payment history with the credit plan they have issued you, but also how you are behaving with others. It has become common practice among these banking giants to periodically check your credit report and use a derogatory mark on another trade line as the basis for increasing your interest rate without warning.

That's right. It's legal.

Thankfully, the Federal Reserve...along with other banking regulators...has taken notice. The Fed has recently approved a proposal that would ban that practice. Credit card issuers would be prohibited from raising interest rates on unpaid balances based on information on an unrelated bill. They would also be required to notify consumers 45 days in advance that they may raise rates.

In a lending climate where things are getting tighter and tighter...this is excellent news!

Look for finalization of this rule by the end of 2008.

http://www.reuters.com/article/wtMostRead/idUSWBT00892120080502