Credit Cards Rates Jump Ahead of New Regulations

Companies add fees and cut limits in blind cash grab
By Kevin Spak,  Newser Staff
Posted Nov 6, 2009 1:57 PM CST
Barney Frank can't believe how blatantly companies have abused the extra time the government gave them.   (AP Photo/Harry Hamburg)
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(Newser) – If your credit card bill just exploded, it wasn’t an accident. Card issuers have been jacking up rates to historic highs—in excess of 30%—cutting limits, and adding new fees in an effort to squeeze money out of customers before new federal regulations kick in Feb. 22. The new rules will prevent them from retroactively raising interest rates and fees on existing balances the way they’re doing right now.

“I might have been better off going to the mafia,” laments one customer, whose rate has hit 29.99%. Companies were supposed to use the 9-month lead in period to clean up their act, but Barney Frank says they’re abusing it. “I didn’t think they would be as blatant as they were,” the House financial services chairman tells the Boston Globe. “This is really just a way for them to make more money.”