With the new reform act signed by President Obama in 2009, financial analysts say that its implications could mean more costs for cardholders from this year on. While the reform act works in favor of the credit account owners by implementing checks and balances mechanisms for credit card issuers, analysts say there is more to this and that consumers still need to be watchful.
Analysts point out that high annual fees were already introduced by the credit card issuers as they comply with the reform act which mandates them to be more transparent in their dealings. The high rates, the analysts say, is a way for the companies to make up for projected profit they can lose with the mandates of the reform act.
Analyst Tim Morgan adds that the reward programs may simply be dissolved in the market, since the benefits on the rewards credit cards cannot be offset by high annual fees. The companies cannot run the risk of doing this since it can be considered another violation in the reform act.
He also stated that now it will be more difficult for people with low income or bad credit history to get credit.
Morgan believes that though consumers may find relief in one way or another with the Credit Reform Act, there should always be considerations for their costs – especially when one plans to maintain credit cards in the long run.
Like any kind of debate, the Credit Car Reform Act has two different conclusions – one that defends it and the other that exposes its loopholes, Morgan remarks.
In conclusion, he offers the reality that there really is nothing in the reform act to protect the cardholders in cases of high interest rates with the variable credit cards.
With the rise of the prime rate, Morgan shares that the interest rates are also expected to increase. This is something that credit card account owners have long been wary of and of course, something they would try to avoid as much as possible.
Morgan finally concludes that with credit card companies continuously exercising their right to limit credit entitlements and impose new or additional fees on accounts under their discretion, the worries by consumers on other types of credit cards not being protected by the Credit Reform Act are still very much grounded.