Sunday, August 23, 2009

Why Are Banks Raising Credit-Card Interest Rates?

I'm quite interested to know why any credit-card issuing company would be raising the interest rate it charges card holders at this time. If you'd prefer to be realistic about a company's motivation for doing such a thing, you must consider the symbolic nature of what such an act means, particularly in light of the government's recent directive. The Credit Card Accountability, Responsibility and Disclosure Act was a direct challenge to those banks involved in credit card issuance to American consumers. The Act basically reigns in some of the industry's more abusive practices, such as requirements that a bill must be delivered at least 21 days prior to it's due date. Extremely restrictive.

With this knowledge in hand, I'm really wondering why I know people whose credit card interest rates were just raised on Thursday. Perhaps they think that most people will just sit back and absorb the painful rate increase. It's apparent that they are mistaken on this assumption. The funny thing about capitalism, is that it creates a service whenever there is a need. Balance transfers will spike upwards in the next month, considerably. Sphere: Related Content

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