February 22, 2010 marked the day when Congress allowed credit card reform to take affect. Why they waited so long when they passed the bill over nine months earlier is a mystery to me. What is also a mystery to me is why they could not see the abuses in the credit card industry before then.
Yes, changing the interest rate without notice is an abuse. So is being able to change the rate on balances already in existence. And charging you for going over the limit when they know and you don’t is totally unfair. And interest rates of 29% are worse than the Mafia. But all of that is small potatoes.
Think about this. Why did they love that $39 late charge? If you had a minimum payment of $10 and you were one day late, they could hit you with a $39 late charge. That is an effective rate of 1,423%.
The new laws have made all of this tougher for the credit card companies. You should expect them to raise their annual fees and raise their balance transfer fees as well. If you are carrying a small business card from American Express or Visa or a personal card from any credit card company, you should expect to see the credit card companies act more like the airlines. That is, fees go up and charges for “extras” such as a meal or a blanket, that were previously free.
We have been successful in the past negotiating these fees for clients; small businesses and individuals should be able to do the same if you start to find the fees outrageous.
Let me know if you need my help.