August 14, 2008

What is wrong with credit cards?

Credit card companies are getting some bad press recently, well more than that really, but because of the so-called credit crunch, they have been called loan sharks, crooks and even leeches.

The problem that the credit card companies have is that they are a business; it is just that their business is credit, which makes people think that they are like some of the names above.

However, the regulators in the US are looking to tighten up the rules that govern the way that credit card companies and other related businesses operate, by bringing in some new guidelines. Whether or not this is going to help those in debt is another matter.

The group added that agencies should go further than the current proposals, with moves such as:
Ending all retroactive interest-rate increases, including for consumers who have had a 30-day late payment

Limiting how high credit-card issuers can set “penalty” interest rates, and how long issuers can keep consumers at these rates

Prohibiting fees to pay a credit card by phone or Internet

Source [Market Watch]