Credit Card Companies Hit with New Limits
Friday, December 19 2008
Relief is on the way for millions of Americans who are furious with their credit card companies.
U.S. regulators - led by the Federal Reserve, the U.S. Central Bank - on Thursday approved new rules to ban what they call "unfair or deceptive" practices by banks and credit card companies.
For years, consumers have complained banks have imposed unreasonable fees or have hiked their interest rates for no reason at all. Consumer groups say that while such practices were legal, they have helped push some card-holders deeper into debt.
The new rules would protect consumers from arbitrary rate hikes, and require they be given a fair amount of time to pay down debts.
Critics complain the changes will only make it more difficult for many consumers to get credit.
One study estimates the rule changes could cost the banking industry more than $10 billion a year.
The new rules are scheduled to take effect in July 2010.
Some U.S. lawmakers say they plan to look at passing legislation next year to aggressively target credit card lending abuses.
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