Even after the passage of the Credit Card Accountability and Disclosure Act of 2009 (aka Card Act) banks are, and will, still finds ways to get you with more fees and charges.
{the card act} was intended to reshape the contours of consumer finance. Among other things, it forces card issuers to give customers more notice about interest-rate increases and restricts certain controversial billing practices such as inactivity fees.
Yet some of the biggest card issuers in the U.S., including Citigroup Inc., J.P. Morgan Chase & Co. and Discover Financial Services, are already rolling out a slew of fees designed to recapture some of their lost income, in part by skirting the new rules. Some banks may even be violating the law outright, say consumer advocates.
“Card companies are figuring out how to replace old fees with new ones,” says Victor Stango, an associate economist with the Federal Reserve Bank of Chicago and a professor at the University of California, Davis, who has been analyzing how the Card Act will affect consumer banking. “It’s a race between regulators writing ever-more-complex laws and credit-card companies setting up ever-more-complex fees.” [...]
But some banks may be going too far. In a July 7 letter to the Office of the Comptroller of the Currency, which regulates many of the biggest U.S. banks, a coalition of consumer groups including the National Consumer Law Center, the Consumer Federation of America and Consumer Action flagged several “potential violations of the Credit Card Act.”
Other banks are ramping up their marketing of so-called professional cards. These are like corporate cards but can carry the same terms as consumer cards—and aren’t covered under the new law. In the first quarter of this year, issuers sent out 47 million professional-card offers to U.S. households, up from 13.2 million in the corresponding period last year, according to research firm Synovate.
“This can be a very easy way around the Card Act,” says Josh Frank, a senior researcher at the Center for Responsible Lending, a consumer group.
The upshot: Borrowers must be more vigilant than ever—even before they make their first charge on a new credit card. [...]
Also be on alert for banks that issue “rebate cards” that claim to offer a refund on finance charges if the payments are received on time. These ‘rebate cards’ are not governed by the ‘Card Act’.
Pretty sneaky isn’t.
(Source: WSJ)
