Obama’s Credit CARD Act of 2009 harms consumers
That’s right – you knew more government regulations always have unintended consequences – and this is the case – all new debt the credit card companies have raised their interest rates to record levels.
While the Credit CARD Act did limit how much consumers would be charged for late payment or over the limit spending on their credit cards, the Act did not address the creation of other penalty fees. For example, in late 2009, Fifth Third Bank started charging $19 for cardholders who had not used their credit cards in 12 months (2). Citi started charging a higher interest rate for cardholders who spent under a certain monetary amount.
The Credit CARD Act did impose interest rate limits on existing balances, but it did not impose interest rate limits on future balances. This has led to Citigroup charging cardholders an interest rate of 29% if they do not pay their balances on time (3). It has also led to First Premier Bank offering a credit card with an astounding 79.9% interest rate (2).