A study released on Tuesday from the Pew Charitable Trusts says that credit card late payment fees have declined and interest rates have stabilized thanks to the credit card legislation. While the study notes that the changes occurred two years after the legislation was signed, this could mean the law has truly made an impact.
Credit Card Act Has Made a Difference
The study, which examined about 300 consumer credit cards offered via the internet by the 12 largest banks and credit unions from March 2010 to Jan. 2011, shows that a number of positive changes have occurred as a result of the Credit CARD Act.
One major change is that charges for late payments on U.S bank-issued cards decreased from a median of $39 to a range of $25 to $35. However, while late fees came down, the study found that they were charged just as frequently.
Some Issues Have Remained Unchanged
It’s also good to note that while some changes occurred as a result of the act, some things have remained the same:
- Advertised interest rates: The median highest advertised bank-issued credit card interest rate was unchanged at 20.99 percent and the lowest also remained the same at 12.99 percent.
- Annual fees: The study found that median annual fees are $59 for bank-issued cards.
One change that consumers may not like as a result of the act is that the percentage of bank credit cards with annual fees increased to 21 percent from 14 percent.
Overall, however, the study seems to show that while all is far from perfect, the credit card problems experienced before the act was signed into law could slowly dissipate over time.
As noted by Nick Bourke, director of Pew’s Safe Credit Cards project in a statement, “Pew’s research shows that predictions that the legislation would spark new charges and long-term interest rate growth have not materialized.”
