Thanks again for the guest post!

I subscribe to consumer-action.org emails. This morning I received an email that talked about a survey that was done against 41 credit cards from 22 banks. Full details of the survey can be found here. http://www.consumer-action.org/news/articles/2008_credit_card_survey/#Topic_04

I was actually surprised at some of the findings. I think that it is wrong that a credit card company can lower your credit limit without warning and then turn around and charge you over-the-limit fees.

I cross my fingers that none of the horror stories I read about ever happen to me. Most of my $72,000 debt is currently sitting under 10%. If my APR’s were to suddenly jump without notice, it could seriously jeopardize my debt payoff plan.

Here is a recap of what was found during the survey:

* “Anytime, any reason” – 77% of surveyed credit card issuers answered “Yes” to the question “Can you increase my APR or change my terms ‘any time for any reason’?” This includes all top ten issuers – even Citibank which pledges not to change a customer’s terms before the card’s expiration date.
* Shrinking credit limits – Five financial institutions told CA surveyors that they would reduce a cardholder’s credit limit because of perceived customer risk. Factors include: a decline in credit scores, late payments and balances that get too close to the credit limit.
* Factors beyond a consumer’s control – Four of the top ten credit card issuers cited factors beyond a consumer’s control that might cause interest rate increases such as: “market conditions,” “the economy,” and “business strategies.”

I love how they try to divide consumers with their typical nonsense scare tactics. The CC Company spin is that the new regulations will hurt “good” customers – the people who pay every month, on-time, and so on and so on. They stop just short of insinuating that only irresponsible borrowers would want something like this to pass. Its ridiculous – anyone who has ever owned a credit card has had to deal with that industry’s shady, underhanded tactics at one time or another.

Don’t fall for it. That entire industry has been allowed to go unchecked for way to long. They have been allowed to bend the rules and change the game as they see fit too many times now and it is only getting worse. The proposed regulations cannot come fast enough. Will it stop them – no way. I’m hoping that it will slow them down a little bit though.

I agree with Nelson, they are not going to stop giving credit, they are not going to cut off their noses to spite their faces!

“The industry is already in full swing trying desperately to stop these new rules. They are using the usual tactics. Their most vocal threat is that this could choke off credit. LOL! Not even a new born baby would believe that one. If they don’t lend, especially now with the new rules, they don’t make money. So that argument is just a scare tactic.”

I think this time Congress should get this thing over with and done.

@ Twiggers
It is sad that it’s taken this long, but government regulation can only slow down predatory business practice, it can never eliminate it. Those predatory businesses (credit card companies in this case) will always find loop holes. The best defense is becoming financially educated and arming yourself with the knowledge to recognize and avoid such pitfalls when you see them.