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Credit Card Reform Gets Another Look

Tuesday, February 17,2009 07:57 PM

I read an article in USA Today about banks raising interest rates, fees and minimum payments on both consumer and business credit card debt due to "the current risk environment." It just seems like raising the cost of debt while people are losing their homes, jobs and savings is a little off kilter. Congress is getting involved but is it realistic to think they can turn a ship that big quickly enough? Here are a few of the changes companies have recently made:

Chase tacked on a new $120 yearly fee and raised the minimum payment from 2% to 5% of the balance
Capital One is raising the interest rate to 17.9% from 12.9%
Citibank is increasing card rates an average of 3 percentage points on millions of cards "because of the economy"

What do you think? Is this an effective strategy or will it drive more people to default? See the full article here: http://www.usatoday.com/money/perfi/credit/2009-02-16-credit-card-reform_N.htm?csp=34