Credit Card eZine - News and Articles about Credit Cards

As per study, credit cards are more transparent now

2011-03-03

Ever since the CARD Act was implemented and the reforms took effect, there seems to be more transparency with credit cards, and the cardholders are paying the interest rates that resemble the rates that are being advertised, as per the results of the study released on Wednesday.

Although banks had stated that there would be a rise in the interest rates after the new law came into effect, the study has found that the APR’s have largely remained flat on an average, when you take into consideration the impact of the economic slowdown.

It has almost been a year since the CARD Act, 2009, took effect and brought in the sweeping changes in credit card history. The biggest change that it brought about - which had a direct impact on the customers was the sudden hike in interest rates. Banks can no longer freely raise interest rates on credit cards. Even the APR’s could only be increased on the existing card balances, only under specific circumstances such as being 60 days late in making the bill payments.

The credit card reform kicked in just when the economic slowdown gripped the nation and analysts stated that it was difficult to say, which one of these developments had the biggest impact on the credit card rates – was it the economy or the card regulations.

According to Frank’s research and his usage of the statistical analysis, it has been found that the CARD Act had neither caused a rise in the APR’s nor a constriction in credit.