Contrary to predictions that the CARD Act would make an impact in the industry by bringing down the credit limits and also limiting the profits made by banks, the latest study by Pew Charitable Trusts showed that the impact has been only minimal. The CARD Act was brought in to bring more clarity to credit card holders since they were constantly being abused by credit card companies.
The Act highlighted the need to put forth all details and disclosures to customers before selling them cards so that the customers would make the decision after weighing all facts rather than dreading hidden charges at a later stage. As per the Act, the credit card companies would be fined in case of violation.
Though credit card companies have tried to comply with the Act, they have come up with many other innovative ways to continue with their added charges which the customers must be wary of. The year 2009 which saw the worst recession also saw a decline in the credit card industry with less takers. It was this period that also saw an increase in fees by all banks. The number of cards has seen an increase since the last quarter of 2009 and first quarter of 2010.
Nick Bourke, director of Pew`s Safe Credit Cards Project and co-author shared his views about the situation telling though they appreciate the efforts made by the Act to bring in more transparency to the users, there still are some challenges that remain as per the research conducted.
Very recently the National Consumer Law Center, Consumer Federation of America and Consumer Action which are looking into various loopholes in the Act have warned regulators about the same. There is a speculation that credit card companies are still making good profits by working around the loopholes and not making all the information clear to their customers while they purchase the cards.
Credit card companies are now marketing their cards with great zeal being undeterred by the Act. As a part of their marketing strategy, they are mailing the credit card offers to the homes of potential customers. The first quarter of 2010 alone saw a rise of as much as 29 percent in the credit card offers being made via mails and compared to the same time a year ago.
Even big names like HSBC which planned to exit the credit card business in the US in 2009 has reinforced its presence in the US market by making great profits in 2010.
It is best for customers to remain wary of all conditions and clauses while opting for the cards and save themselves from abuse by credit card companies.