Credit.com Survey: Higher Interest Rates, Lower Credit Limits Consumers favor speeding up credit card industry reform

Back in May, Congress passed the Credit Cardholders' Bill of Rights, a measure intended to put an end to certain oppressive credit card policies: among its provisions are controls on unexpected interest rate hikes, "double-billing" methods of calculating finance charges, and fees on previously paid balances.

With the law's initial effective date, February 22, 2010, on the horizon, credit card companies are hammering consumers with increased fees and interest rates, according to new survey data from Credit.com that reports 45% of consumers saw these negative changes to their credit card accounts.

Compiled by GfK Custom Research and based on a random sampling of 1,000 adults, the findings suggest that credit card companies have done little to allay the types of consumer concerns that prompted legislative actions earlier this year. The percentage of consumers experiencing recent interest rate increases, for example, spiked to 27% (an 80 percent increase from the 15% of consumers who reported such activity in a similar survey conducted by Credit.com in February).

Other survey highlights include:

• 36 percent increase in those experiencing recent fee hikes (from 14% in June survey to 19%)
• 113 percent jump in those facing lower credit limits (from 8% of consumers surveyed in February to 17%)
• 42 percent increase in those who’ve experienced a hike in minimum payment due (from 12% in June survey to 17%)
• 33 percent increase in those who had their rewards program reduced (from 9% in June survey to 12%)

It may come as no surprise, then, that the majority of those surveyed (56.5%) favor a Congressional proposal to expedite Credit Cardholders' Bill of Rights enforcement. The plan suggested by House Financial Services Committee Chair Barney Frank (D-Mass) and Joint Economic Committee Chair Carolyn B. Maloney (D-NY) suggests the Bill of Rights be made effective Dec. 1.

Speaking at a hearing on credit card reform earlier this month, Frank suggested financial companies have taken advantage of a delayed Credit Cardholders' Bill of Rights implementation by raising customers' rates. Banks, meanwhile, have argued that they need greater time to comply with the new law.