We've been closely tracking the tidal wave of credit card account changes over the past year. Millions of APR increases were first, followed by credit limit reductions and then fee hikes. At times, it seemed like every American with a credit card had received some sort of bad news about their account.
A new report from the Center for Responsible Lending outlines a few numbers on recent credit card changes:
- All of the top eight credit card companies have applied some sort of increased interest rate on existing cardholder balances in the past six months. The Center for Responsible Lending estimates that 10 million cardholders' interest rates have increased.
- Seven of the top eight issuers increased their penalty APRs.
- Five of the eight top issuers have raised fees in the past six months.
Of course, this report is particularly relevant in light of the push for credit card reform taking place in Congress this month.
Just a few hours ago, there was news that lawmakers hashing out the credit card reform bill had found a new compromise. They have agreed to continue allowing banks to raise interest rates on past balances if cardholders fall 60 days or more behind on their bills, instead of a full ban on retroactive rate increases. The consumer would then be able to return to a lower rate after six months of responsible card use.
This potential compromise could actually be good news for consumers in the short term. If credit card companies see that they could continue having some risk-based pricing under the pending law, they might back off on the proactive rate hikes that are driving everyone crazy these days.
Emily Peters – Credit.com's personal finance expert and former TransUnion credit bureau insider, Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com editor.
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