Credit Cards: The Good, the Bad, and the Ugly
The CARD Act will improve your life, but there are still pitfalls to watch out for.
The CARD Act takes effect today. Hooray! No more retroactive interest rate increases! Overdraft protection is opt-in! Fees have to be clearly labeled!
But the hills are alive with reports of what credit card companies are doing to make up for this. The New York Times reports that fees on international transactions are likely to go up without anyone telling you. Felix Salmon reports that banks are now pushing reward cards heavily because they have higher interchange fees. The Argus Leader in Sioux Falls (ground zero for credit card companies) reports that subprime cards now carry interest rates of 79.9%. The Washington Post reports that clever new fees are proliferating to make up for the old ones. And of course, as MoJo and a cast of thousands have reported, card companies have been busily raising rates on everyone for months in preparation for the great day.
Bottom line: don't take your eye off the ball yet. Some of the most egregious abuses are gone, but new ones are bound to spring up. If you have any good stories of your own to tell, leave 'em in comments.