If you’re among the many consumers who have been frustrated by credit card interest rate increases, slashed credit limits, or higher minimum payments, about the only thing you can take heart in is the fact that you’re not alone. As card issuers take step to shore up the bottom line by tightening lending terms, millions of card users have had to face changes to their credit card terms. For people without credit card debt, these changes are often little more than annoyances. However, for people with high credit card debt, these changes can have serious financial repercussions.
Most people feel powerless to do anything about the changes to their credit card terms. And, even though President Obama recently signed into law the Credit CARD Act of 2009 to curtail some of the power of credit card companies to change terms, that law doesn’t step into effect until August of 2010. Worse, there are limitations to the law. Most significantly, it does little to address card issuers’ ability to charge steep interest rates. Even after the law steps into effect, credit card companies can still saddle consumers with interest rates to the tune of 25% or higher, as long as it’s on new purchases, and as long as card issuers give cardholders 45 days notice. There are no rules curtailing card issuers’ right to slash credit limits, raise the minimum payment due, or change the tables on cardholders in other ways that could spell financial disaster for hard-strapped cardholders.
But are we really that powerless? Unbeknownst to most, the Credit CARD Act of 2009 was in large part inspired and informed by a rising tide of consumer complaints against credit card companies. The law was basically a reiteration and elaboration of new rules adopted by the Federal Reserve Board in the middle of December 2008 under the Federal Trade Commission Act. Aiming to better protect credit card users by prohibiting “certain unfair acts or practices,” the new rules introduced by the Fed were based on more than 60,000 complaints about credit card practices, which the FTC had received from angry consumers.
In other words, speaking up can, and often does help. And the more people who speak up, the better. While you cannot complain about late fees, over-the-limit fees, and other features, which are simply part of the way credit card companies do business, you can and should file a complaint against unfair business practices, i.e. unfair ways in which credit card companies implement those fees, terms, and charges.
Here are some reasons for filing a complaint;
- If your credit card interest rate on existing balances goes up for no good reason prior to the introduction of the new regulations in August of 2010, which prohibit card issuers from retroactively raising interest rates;
- If a card issuer changes your terms, such as e.g. increasing the minimum monthly payment due, and doesn’t give you a proper way to opt out;
- If your card issuer changes terms in a way that has larger repercussions for you, either by affecting your credit score or by making it difficult for you to make your monthly payments;
- Any other action, which hurts you as a consumer and which is not caused by a mistake or shortcoming on your side.
