Connecticut Senator Moves to Freeze Credit Card Interest Rates
Senator Dodd of Connecticut introduced a piece of legislature that would stop credit card companies from increasing interest rates until the new credit card rules take effect, according to the Wall Street Journal. Since the new credit card law was approved in May, nearly every major credit card issuer has raised interest rates on its cardholders.
Though the new rules aren't supposed to take effect until late next February, another piece of pending legislation aims to move the effective date to December 1 this year. Last week, the House Financial Services Committee voted unanimously to move the date. The law still has to be voted by the entire House, then the Senate before it becomes effective.
According to a Credit.com survey, the majority of consumers want the credit card rules pushed up. However, Federal Reserve Chairman Bernanke warns moving up the date could ultimately be costly for consumers since credit card companies would pass down the cost of rushing to meet the new law.
If it's approved, an interest rate increase freeze could prove to be just as beneficial for consumers as moving up the date for the new credit card law. After all, the goal is to prevent credit card issuers from taking advantage of cardholders.
You can avoid the effects of higher interest rates by paying your balances in full when your billing statement comes. That way, you don't have a balance subject to finance charges.
A piece of the new law has already gone into effect requiring credit card issuers to give a 45-day advance notice of interest rate increases.
More on the New Credit Card Rules:
I don’t know if this means anything, because some rates are so high, who would want them to sry there?
John DeFlumeri Jr
Good point. I think the freeze is on rate increases. So credit card companies would still have the ability to lower rates, though I doubt they would.