Consumers may have lost billions because of CARD Act - Legal News


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Legal » Consumers may have lost billions because of CARD Act

Consumers may have lost billions because of CARD Act

The CARD Act was finally implemented 9 months after it was signed by President Barack Obama. Before this was signed, it was a highly debated topic in the Senate and by experts in the financial industry. This delay worked in favor of the credit card companies because during the interim period, they not only increased the APR on most of their credit cards, but also enhanced the fees and other charges associated with the card. Therefore, in order to understand the effect that this act has had on consumers, it is imperative to trace back to 2008 and draw comparisons.

The prime bank rate between the second half of 2008 and late 2011 did not change. The rates of mortgages also saw a decline. Despite this, there was an average increase of 2.1 percent on the credit cards. The customer credit outstanding that stood at $800 billion rose by another $16.8 billion as a result of this increase.

The intention of the CARD Act was to make credit cards more customer-friendly. However, this was not to be. Instead, it became tougher for customers with average credit history to obtain credit cards and the ones who already had credit cards had to accept the interest rate hike before the act came into effect. The average increase in the interest rate was in the range of 1.6 percent for those with excellent credit history, while those with poor scores had to concede to an average increase of 3.4 percent.

The balance transfer fees have also increased consistently despite the presence of the CARD Act. There is no cap on the upper limit charged for balance transfers. Instead, customers are charged a percentage of the overall transfer amount in order to process the transfer of balances from one card to the other. In contrast, before the CARD Act came into effect 31 leading credit cards had an upper limit cap for balance transfers.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

New SPG Amex Luxury Card Arrives This Summer

Posted: April 26, 2018

The Starwood Preferred Guest American Express Luxury card is coming this August, along with the new SPG and Marriott combined rewards program. This card offers 6x the points when booking stays at SPG and Marriott Rewards hotels and 3x ... Continue reading
Masterpass Comes to BJ’s Wholesale Club

Posted: April 25, 2018

Have you been wondering when you would be able to use Masterpass, to check out at BJ's Wholesale Club? If you have, you don't have to wonder any more. The pair recently inked a deal, bringing Masterpass, MasterCard's digital wallet, to ... Continue reading
A New Unified Marriott and SPG Rewards Program is Coming

Posted: April 24, 2018

When Marriott acquired SPG, it was unclear what would happen with their rewards programs. But now the cat is out of the bag. SPG, Marriott Rewards and Ritz-Carlton Rewards will all become one loyalty program this August. At that point, all ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants,, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
Our application is quick and easy with instant pre-qualification available
For Fair / Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!