The Federal Government is trying to crack down on credit card companies. They want to impose tough restrictions on the way credit card issuers can conduct business with consumers.
Federal regulators are proposing some changes to the way that credit card companies are allowed to operate. These proposed bills will impose greater oversight and regulation on credit card companies but still faces tough resistance from the industry.
Although the changes are not set to take place until July 2010, they would help to protect consumers from unfair credit practices such as interest rate increases. The Obama administration is claiming that along with these increases, predatory lending practices have contributed to the economic crisis we are facing.
In the past, it has not been uncommon for credit card issuers to increase your interest rate if you fail to make all of your payments on time. Recently though many of them also started increasing your interest rate for reasons like a sudden drop in your credit score, or going above your available credit limit.
Since the recession started late last year there has been a large increase in the amount credit card delinquencies and defaults that spawned around the same time that credit card companies started dramatically increasing their interest rates. Many consumers can not keep up with the higher monthly payments that these rate increases cause making them start to fall behind on their payments and damage their credit rating. For free information on how to improve your credit ratings you could visit sites like FreeOnlineCreditGuide.com or the FTC’s website.
President Obama had pledged during his campaign to help protect consumers from interest rate hikes and excessive late fees. This week the Financial Services Committee will consider a bill that will enforce these provisions that the White House hopes to have on the President’s desk before summer.
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