Recent reports have indicated that the introduction of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 rather than saving money, may actually has cost consumers millions of dollars.
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act eventually came in to being a mere 9 months after President Barack Obama signed it. Prior to its signing, the act was a major talking point and had long been debated by not only the Senate, but also by a number of financial experts.
The delay caused by this was good news for the credit card companies who made use of it by hiking there APR rates up on nearly all their credit cards, and in addition they also increased other charges on their cards. To realize just how this has affected consumers we need to go back to 2008 to make comparisons.
The prime bank rate from the latter half of 2008 and the latter half of 2011 had not changed. Mortgage rates also fell. In spite of this, credit cards increased by 2.1 percent. The outstanding customer credit increased from $800 billion, to $816.8 billion as a direct result of this increase.
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act’s intention was to make sure that credit cards became more customers focused although this did not happen. Instead it often became a lot more difficult for people with average credit scores and history to obtain credit cards.
Plus people who already had credit cards had no choice but to accept the hike in charges before the act came into force. The average rise in the interest rate stood at 1.6 percent for those people who had excellent credit histories. Those people with a poor credit history saw their interest rate increase on average by 3.4 percent.
Balance transfer fees have also raised a number of times even through the presence of the Credit Card Accountability, Responsibility and Disclosure Act of 2009. There is no ceiling on the upper limit that is charged for balance transfers, instead card holders find themselves charged a percentage of the total amount transferred in order to process the balance transfers from one card to the other.
This is in total contrast to before the Credit Card Accountability, Responsibility and Disclosure Act of 2009 came into force when 31 of the leading credit cards had an upper limit cap for balance transfers.