We support reforms to the financial marketplace to curb bad practices by banks and lenders.
Gas Card Holder Beaten Up over One Cent Mistake
Credit Cards
A comprehensive credit card law is now in place that will help end the tricks that trap consumers in high-cost credit card debt. You can learn more about these key rights below. Click here to see when different provisions of the law go into effect.
The new credit card law includes these consumer protections:
Restricts all interest rate increases during the first year
Restricts interest rate increases on existing balances
Increases notice for rate increase on future purchases
Preserves the ability to pay off on the old terms
Requires fair application of payments
Provides sensible due dates and time to pay
Protects young consumers
Restricts issuance fees on fee harvester cards
Requires enhanced disclosures
Places limits on fees and penalty interest
Requires banks to review rate increase every six months
Establishes gift card protections
Click here to read a full summary of the Credit Card Legislation.
Read the Federal Reserve Board’s Tips on the new Credit Card Law.
Publications
- Group letter to banking agencies recommending enforcement action under the CARD Act
July 7, 2010 By Fax (202-452–3819) and First Class Mail The Honorable Ben S. Bernanke, Chairman Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue, NW. Washington, DC 20551 Dear Chairman Bernanke: The undersigned groups are contacting you to request that the Federal Reserve Board examine the banks under its supervision Continue Reading
- Summary of Fed’s Final Rule on August Provisions of CARD Act
The Federal Reserve Board has issued its proposed regulations governing the final sections of the CARD Act which go into effect August 22, 2010.
- Paper statement fees?! What to do about this latest trick
We’ve heard from a number of consumers on our previous blog, Paper statement fees?! Credit card issuers’ latest trick about their frustrations with receiving their bills in the mail and surprise(!) are charged a fee for it.
- CU comment to the FRB on Regulation Z proposed rule
Regulation Z: Truth in Lending, Federal Reserve Board Docket No. R-1384
- Summary of Fed’s proposal for final CARD Act provisions
Federal Reserve Board Proposed Rule, Regulation Z March 2010 The Federal Reserve Board has issued its proposed regulations governing the final sections of the CARD Act which go into effect August 22, 2010. The Agency will be accepting public comment on the following provisions which relate to the size of penalty fees and the process Continue Reading
- A Consumer’s Guide to Using Credit Cards
As a consumer, it pays to be smart when choosing and using a credit card. Click the link below to access a site maintained by the Federal Reserve Board which provides a basic guide to navigating the credit card process. – Learning more about credit card offers – Understanding your statement – Credit card repayment Continue Reading
- Have you been ripped off by the big banks or other lenders?
Have you been hit with unexpected fees that drain your bank account? Have you taken out a loan that turned out to be full of tricks and traps? Consumers Union wants to hear your story because it will help us illustrate why consumers deserve stronger protection. Tell us your story so we can build support for real reform that helps consumers not the big banks!
cu.convio.net/shareyourmoneystory
- What You Need to Know: New Credit Card Rules
The Federal Reserve Board’s new rules for credit card companies mean new credit card protections for you. Here is the Board’s summary of the key changes you should expect from your credit card company beginning on February 22, 2010.
- Credit Card Comments to the Federal Reserve
Consumers Union asks the Federal Reserve to make sure credit card companies don’t try to get around the new limits on rate increases and fees through creative new charge schemes or other unfair demands on customers.
- We got the credit card banks on the run!
Your complaints over interest rate hikes, ridiculous new fees and higher minimum payments were heard loud and clear! The House just froze rate hikes on your credit card balances, and gave you new protections starting Dec. 1 — just in time for the holidays. Now we need the Senate to hear us and do the same! Email your Senators right now and tell them you can’t afford to wait for a February law to stop the credit card companies’ abusive tactics.
Press Releases
- CU praises FTC crackdown on “Cardholder Services” robocalls
Five companies are accused of making millions of illegal calls to pitch deceptive offers
- Consumers Union praises CFPB enforcement action against American Express for illegal credit card practices
The investigation found American Express had violated consumer protection laws
- Consumers Union: Discover Settlement with FDIC, CFPB sends strong message that “watchdogs are on the job”
Discover penalized for deceptive marketing; Consumers eligible for refunds do not need to take further action
- CFPB’s credit card complaint database goes public
Financial watchdog is considering adding complaints about other financial products to the public database
- Credit card law marks one year anniversary on Feb 22
CARD Act has provided significant protections for consumers but CU calls for the CFPB to enact more reforms.
- New credit card & gift protections begin August 22
New regulations will help limit credit card and gift card fees and require banks to re-evaluate interest rate hikes
- Fed Issues New Credit Card Regulations to Protect Consumers
New rules offer important safeguards to limit penalty fees but don’t go far enough on unfair interest rate hikes
- CU: Fed should roll back credit card rate hikes
Consumers Union calls on the Fed to require banks to roll back unfair credit card interest rate hikes
- Fed issues proposal to rein in credit card fees
CU: Proposed regulations offer important protections but should be strengthened and implemented sooner
- New credit card protections start on February 22
New law offers significant safeguards but consumers need to be on the lookout for new tricks and traps
Blog Posts
- Ban Deferred Interest Cards, Consumers Union Says in Comments to CFPB
February 22 marks three years since key provisions of the Credit Card Accountability Responsibility and Disclosure Act (the CARD Act), which overhauled credit card practices, took effect. But gaps in consumer protection remain, Consumers Union said in comments submitted Tuesday February 19 to the Consumer Financial Protection Bureau (CFPB). The CARD Act protects consumers from Continue Reading
- Collectors and Lenders Gear Up for CFPB Oversight
While problems in the mortgage industry still dominate the news, some financial industry insiders are warning banks and debt collectors to get ready for more scrutiny over how they handle other types of debt – especially credit cards and student loans. A recent article in the American Bankers Association’s Banking Journal pointed out that since Continue Reading
- New survey compares the comparison sites for credit cards
These days, credit offers abound on the Internet – and, as a result, so do a whole crop of “comparison sites” for credit cards. But which comparison sites help consumers do meaningful comparison shopping for the right credit card? In a survey report released this week, the nonprofit group Consumer Action reviewed 54 comparison sites Continue Reading
- CFPB Forces American Express To Refund $85 Million
American Express will refund an estimated $85 million to some 250,000 customers for illegal credit card practices under a settlement announced today by the CFPB. The company will also pay a penalty of $27.5 million and has agreed to correct its practices. The CFPB is clearly putting credit card companies on notice that, if you Continue Reading
- How To Get Your Capital One Refund
Consumers Union alongside of activists like you fought for the creation of the CFPB, a financial watchdog whose job is to stop unfair practices and fight for consumers. The CFPB was the consumer centerpiece of the 2008 Dodd-Frank financial reform bill. In the watchdog’s first enforcement action it ordered Capital One to provide $140 million in refunds Continue Reading
- CFPB Fines Capital One $210 Million For Deceptive Credit Card Practices
As the CFPB gets ready to mark their 1 year anniversary some big news is breaking. The CFPB is fining Capital One $210 Million dollars for their deceptive practices. According to the Wall St. Journal: The McLean, Va., banking company will refund $150 million to 2.4 million consumers who bought Capital One-branded products over the Continue Reading
- Pew Study: Consumers At Risk From “Business” Credit Cards
Pew released a report this week finding that consumers are getting marketed “business” credit cards that exploit loopholes in the CreditCARD Act – beware of this trap!
- CARD Act’s 1 Year Anniversary
Today marks the one-year anniversary of the CARD Act. The CFPB should pick up where the legislation leaves off.
- College Students Still Big a Target for Credit Card Companies
73% of freshmen are seeing card issuers marketed to students off campus.
- BofA’s “$0 Liability Guarantee” – Is It As Good As it Sounds?
Bank of America has rolled out a new “$0 liability guarantee” on their debit and credit cards, but it might just be federal law. BofA customers need to be aware of their rights under current credit and debit card regulations, just in case BofA’s policy doesn’t cover everything.
News Articles
- Fed proposes limits on credit card penalty fees Source: AP (Wednesday March 3, 2010)
The Federal Reserve on Wednesday proposed strict limits on penalty fees and other charges that credit card companies can slap on customers for missteps such as late payments or going over credit limits.
- A proposal for reining in credit card fees Source: New York Times (Wednesday March 3, 2010)
Rule calls for credit card issuers to revisit interest rate increases made during the last year — and there have been many — to determine if the increases were still justified.
- What Fed proposal does, doesn't do Source: USA Today (Monday March 8, 2010)
The Fed’s proposal gives the card industry a “big out” when evaluating whether consumers’ interest rates should be lowered
- Bank credit card fees keep going up
In recent months, many issuers have raised interest rates for borrowers even as the Federal Reserve has cut rates. They’re doing so ahead of a federal regulation that takes effect next year, curtailing their ability to raise rates on existing credit card debt, says Bill Hardekopf, CEO of LowCards.com.
- The reason behind Capital One's rate increase
Last month, Capital One raised some eyebrows by significantly increasing their rates on new customers on the majority of their credit cards. The advertised annual percentage rate on these 15 cards increased from an average of 12.45 percent to 17.24 percent. One could ask, “What’s left in your wallet?”
- How to lower your credit card interest rate
If you have a credit card, you might be getting a letter in the mail with some bad news: your credit card company is jacking up your interest rate. Never mind if you’ve been an excellent customer, whose always paid your bills on time. Some of the biggest credit card companies, including Capital One, Citibank, and HSBC, are now raising rates on millions of customers.
- Credit card firms continue to raise interest rates and fees
Has the interest rate on your credit card gone up recently? If so, you’re not alone. In the past several months, a number of credit card companies have instituted changes to customers’ accounts, increasing rates and tacking on fees.
- House of Cards
These tactics are not going to improve the credit-card industry’s dismal reputation. They’re also not going to help an economy in recession, since reduced credit lines take away an important cushion for consumer spending, and higher interest rates and increased fees are likely to drive more people to default.
- American Express, Chase cut card limits lowering credit scores
About 45 percent of U.S. banks reduced credit limits for new or existing credit-card customers in the fourth quarter of 2008, according to a Federal Reserve January survey of senior loan officers. Financial institutions may slash $2 trillion in credit- card lines in the next 18 months, Meredith Whitney, a former Oppenheimer & Co. analyst, wrote in a Nov. 30 report.
- Buy something, or else
One of the biggest causes of the financial crisis was that Americans were borrowing (and spending) more money than they could afford to pay back. So how are credit-card issuers reacting to consumers’ attempts to live a more financially responsible lifestyle? They’re threatening to cut their credit cards off if they don’t spend enough.
Worried about retirement?
The stock market has been unusually volatile, plunging hundreds of points, creeping back, only to plunge again. It is hard to stay disciplined about saving when every dime you’ve invested can evaporate in a day.
What is your biggest concern about your own retirement? We want to hear from you.
Where to complain
Online, by mail, phone or fax... Agencies need to hear from you!
Stories about Credit Cards
Over the past seven years, by paying his creditors on time all of the time and monitoring his spending, Brian had successfully increased his credit score from the low 600’s to a recent 705.
Brian of Gardnerville, NV
In June 2008, Ronald lost his job and now relies on unemployment checks as his only source of income. At the end of 2008, he was late on a payment by one day and his Chase Mastercard interest rate went from 4.99% to 24.99%.