Credit Card Fees on the Rise While Limits Continue to Drop
The world is not perfect, and neither are credit card companies, which might explain why they’re increasing fees and decreasing limits in what’s affectionately known as “repricing.” Of course, the millions of consumers affected by this “repricing” are not readily accepting this expensive imperfection.
Why Credit Card Companies are Raising Rates
So what’s going on exactly? Why are companies making abrupt changes such as raising interest rates to as high as 13% from as low as 8%, or lowering limits from $6,000 to $1,000? The reason for these drastic adjustments is not always clear, but points to the need to offset losses from low-performing or defaulting accounts.
It’s a tough scenario for consumers who are already struggling to stay afloat in a suffering economy. Luckily, some of the “big boys” are stepping in to try to rectify the situation. For example, The House is working on a bill that will limit credit card abuse. Also, President Obama plans to meet with company heads to address borrower complaints.
How Should Consumers React to Credit Card Companies?
But what do consumers do as they wait for resolutions? The only options at this point are to speak with their respective companies – or as a last resort, give up their card after paying off the outstanding balance.
With these resolutions, the light at the end of the tunnel seems to be glowing rather dimly. This means, unfortunately, it looks like consumers are going to have to get used to expecting the unexpected. Since companies are allowed to lack transparency in their rules, shaky ground may just be the credit card’s foundation for a while. If you are currently unsatisfied with your credit cards, you’re invited to explore on of our credit card offersto check for lower rates and higher limits. It never hurts to check, especially in this economy.
Do you think President Obama’s plans for credit card reform will make it a level playing field for customers?
