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Living on a Budget
by Sid Kirchheimer, AARP Bulletin, April 16, 2010
Q. My credit card interest rate was unfairly raised before the Feb. 22 deadline for Credit CARD Act protections. What other “last licks” did issuers get in?
A. In a late-January telephone survey of 1,000 cardholders randomly selected by Credit.com, 43 percent reported that at least one change was made to an existing credit card account, and never to their benefit. That’s up from one in three in a similar survey in June 2009. The January survey found:
27 percent reported an increase in their interest rate.
19 percent reported increased fees.
15 percent had an increase in their required minimum payment.
13 percent had their credit limit lowered.
11 percent reported their account had been closed.
11 percent reported a rewards program had been scaled back.
I have received at least 300 letters in recent months from AARP members reporting similar credit card changes. Interest rate hikes (often double-digit) were the most common complaint, even from people who said they were never late or otherwise irresponsible with their payments.
February’s Credit CARD Act protections were just the first round. The final ones begin July 1. After then, if your interest rate is increased because you were 60 days late on a payment, the credit card issuer must revert to the original rate after you complete six months of on-time payments. Also starting in July, gift cards cannot expire for at least five years, and inactivity fees are banned.
Sid Kirchheimer writes about health and consumer issues.
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