Now that the CARD Act has been in effect for almost one full month... are credit card companies better? Nicer? Kinder? More helpful?
The CARD Act legislation did, indeed, make some things better: the statement now has an improved box designed to scare people who think it's "okay" to just make minimum payments -- it shows them it will take ___ number of years for you to pay that balance off, unless you start ratcheting up your monthly payments. So yeah, that's cool and all.
And it is VERY good that when you pay your card company, the payment is now applied to the higher interest rate portion first, before going to lower interest rate portions of your debt. That will save folks a lot of time, money, and aggravation.
But I think it misses the boat fundamentally, in another area: credit card rates have become usurious in a lot of cases.
23.24% APR for a customer in good standing? 29.99% APR (or higher) for a customer who is in default, struggling to right their financial problems? Really, card companies?
That doesn't seem like a fair, market rate for borrowing money. It seems way too damn high. The CARD legislation could have addressed this -- and it could have cut college students a break, too (how about someone using a credit card to pay for textbooks cannot be charged more than, say, 9% APR until after they graduate? Just an idea.)
Loans on peer-to-peer lending site Prosper.com begin at 7.5% APR fixed, not variable and scary.
I think many credit card accounts in good standing should have similar terms. If you're a hard-working, honest customer -- a "creditworthy risk" to the lender -- I don't feel that 17% or 23% is legitimate. Way too high.
In fact, when one of my cards gets "rate jacked" I immediately close it, to protest. I wish more people would do the same. Warning: doing this can have an adverse effect on your credit score, short-term at least.
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