Fed changes rules for credit card companies - KSWO 7News | Breaking News, Weather and Sports

Fed changes rules for credit card companies

Lawton_If you think your credit card interest rate has gone up for no apparent reason - you're right.  However, you aren't alone.  Credit card companies often raise rates if you are late on your payments, but sometimes, they seem to raise interest rates for no reason at all - and, that has raised the government's interest.

Many consumers say that they have been burned by being forced to pay unexpected high interest rates, and they say they are glad the government finally is taking notice.  Using credit cards has become a way of life for many, but these days it comes at a high price.  "Some of these interest rates are exorbetant - they are just terrible," said Jane Mayo.  "I think its pretty ridiculous," said Andi Wyatt.  "They do state the annual percentage rate, so I feel that they shouldn't change that just because you are late on one payment."

The government agrees with consumers.  The Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration, are proposing new rules for credit card companies.  They want to change the way a company can raise interest rates, and when it can charge late fees. 

A local finance expert says it's about time.  "They should be glad that the government is stepping in at this point, because what it is going to do is help the consumers to not be preyed on by credit card companies," said Cindy Collins with Fort Sill Federal Credit Union.

Why did it take the government so long to come to the rescue?  "They were relying on the consumers to read their disclosures," said Collins.  "Now they are trying to make the banks and credit card companies responsible."  The new rules state that companies would be required to give the consumer a reasonable amount of time to pay their bill before a late fee is charged.  Companies also could not raise a consumer's rates until they are more than 30 days late.

Despite all the great news for the consumer, others plan to stay away from credit cards altogether.  "They are the most dangerous piece of plastic that anyone can have -period," said Mayo.  "They shouldn't charge you excessively - just the rate they always do."

The new rules approved by the Fed will not go into effect until 2010.
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