If you are like me, then you are one of the many Americans that pay close attention to politics and how they will effect finances. Well, today, I am remembering the Card Holders Bill Of Rights an act put in place in 2009. The purpose of this act was to protect Americans from unforeseen increases in expenses and unfair treatment by charge card account companies.

Under this new act charge card account companies could only charge default annual percentage rates for specified amounts of time. Also under this new act, credit card account companies could not increase APRs based on defaults on other loans on credit reports. When it comes down to it, this act put many restrictions on the way that lenders could conduct business.

So, 3 years later, did this act really help? When Americans really think about it, they are saying no. As a matter of fact, it made things worse. When law makers made it so that lenders could not increase annual percentage rates based on other factors on credit reports and could not increase annual percentage rates without notice, it took away the ability from the banks to be able to price for risk.

Because no future is certain, things can change at the drop of a dime. Therefore, risks to lenders can change at the drop of a dime. If lenders are not able to price for this risk, they may end up taking a loss. So, as a result of this restriction, many charge card companies decided to send out change in terms letters to the majority of their charge card holders. These change in terms letters would be to let people know that their annual percentage rates would be going up!

As a matter of fact, because lenders now have a hard time pricing for risk, charge cards have become more expensive. Some of the most commonly increased expenses due to this act are:

Annual Fees: Before the Card Holder Bill Of Rights, charge card account annual fees would range from $20 to $50 on average on the credit cards that had them. However, most charge card accounts offered no annual fee at all as a perk to owning the card. Unfortunately this is no longer the case.

Transfer Fees: Balance transfers are a financial tool that are commonly used. Before the Card Holder Bill Of Rights, although some charge cards charged for this service, most did not. However, as a result of increased risk in these loans, it is almost impossible to find a balance transfer charge card offer these days that doesn’t have a balance transfer fee.

Interest Rates: Before the Card Holder Bill Of Rights, credit card account standard interest rates were on average 3 percentage points lower than they are today.

So, why would I write this article. Well, because I believe that there are some things that the government should just leave alone. Things like trade. If a company treats their customers unfairly, the word will get out and other consumers will not use that company. This is what America was built on and these are the freedoms that are being taken away from us!

This article is brought to you by:
JEMCreditCards.com: Skymiles Credit Cards | The Best Credit Card Offers


Sponsored Links

About Author

Author:

This author has published 28 articles so far. More info about the author is coming soon.