Fed Survey Shows Consumers Hurt Since Credit Card “Reform” Enacted

By George Gombossy | Last updated Nov 10, 2009, 7:13 pm

Before we jump on the proposed Consumer Financial Protection Agency, let us take a look how well consumers were treated as the result of another “reform” that Congress passed this year – the CARD Act which was supposed to protect us from high credit card rates and fees.

According to today’s analysis of the Federal Reserve’s quarterly survey of loan officers by www.lowcards .com:

Interest Rates–54% of banks have already increased or are planning to increase the credit card APR on their good (prime) customers.

74% of banks have already or will increase APRs on those with poor credit (subprime).

* Credit Limits–just over half of the banks have cut or will cut the credit limits of their credit card customers.

* Approval Rates–it is tougher to be approved for a credit card. 47% of the loan officers said they have or will raise the credit score requirements for prime customers qualifying for a credit card. That number jumps to 53% for subprime customers.

* Annual Fees–almost 40% of the banks had increased or will increase the annual fees on credit cards.

“This report confirms what credit card consumers have been experiencing all year: significant increases in their APR and substantial cuts in their credit limits,”
says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. “Issuers are trying to take these rate increases before the CARD Act provisions go into effect in February of 2010.”

The Fed’s complete survey can be found here:
http://www.federalreserve.gov/boarddocs/snloansurvey/200911/fullreport.pdf