Credit Card Rules

06:43:57 AM Monday, December 10, 2007

Can We Expect Transparent Rules on Credit Card Deals?

In the light of the recent Senate hearings on credit card rates, it looks like credit issuers are on the way of changing credit card rules and regulations in favor of customers. For years, credit card providers have conducted their policies to cardholders. Present days, the situation has taken another turn. Increasingly, lenders start to waive some confusing credit practices that led so many people to various financial difficulties. However, we must accept the fact that lenders have done this under the pressure of discontented users and lawmakers.

There are a lot of consumers who take a dim view of credit card deals. They are afraid to fall into debts, to become a victim of various credit card traps, not to mention fraudulent activities that may lead to certain financial difficulties. To a certain extent, they are right and plastics may become a reason of financial disasters.

Still, the guilt of lenders in all your misfortunes is arguable, until this lender uses some practices that lead to hefty interest rates. The thing is, many consumers have been hit with unfair increases in their credit cards' interest rates. And legislation was necessary to settle this situation in case some creditors do not do this voluntary.

Take for example, Bonnie Rushing's story, whose interest rates almost tripled because of a credit score drop. The most striking fact is that all cardholders who faced the increase on their best credit cards were quite diligent credit users and paid their balance in full every month.

The problem is that credit card issuers use the information in your credit report as an indicator of your creditworthiness. It's quite fair when one applies for a plastic and a creditor should estimate the risk. But it's rather embarrassing, when you use your plastic and astronomic credit card rates come out of the blue.

Actually, credit users just ask for some basic facts, for clear and transparent rules. Meaning, one should be aware of all the practices before making credit card deal. While some lending organizations have never used unfair credit practices like universal default, the others tend to use them, and reap big profits from it.

Credit card companies on the other side of this heated discussion, argue that without this ability to raise interest rates in accordance with credit score changes, they will have to find other ways to offset the losses. In other words, if they don't raise interest rates of those whose credit score drops, they will have to raise credit cards rates on all consumers, or set credit card restrictions for some credit applicants.

December is a month when customers rush into the malls. Advertisers and merchants urge shoppers to spend more, and if one shops with a plastic, there's a danger that individuals can ruin their financial well-being.

All in all, this legislation is a crucial point in the trends of credit card industry. We may expect better credit card deals with transparent and clear rules, or we may face higher interest rates in spite of our current credit score.

I am writing this letter to you to gain your support. I am starting a campaign to force the United States Government to enact New Credit Reform and stop Creditors from imposing ridicules High Interest Rates.

I personally have become a victim of their efforts to unjustly raise interest rates without just cause. Chase sent me a letter stating that they are going to raise my interest rate from 8.99% to 16.49%. I have good to excellent credit and pay all my bills on time. I pay more than the minimum amounts. I called Chase to find out why they are raising my interest rate, and their reply was that the balance on my credit card was too high. I have had this card for many years with an excellent payment history, and have never over drawn this acct. I am several hundred dollars below the limit. After listening to the repersenitive for several minutes explaining their logic it comes down to the fact that they were raising my interest rate just because they could, and I have no way of preventing them.