God Bless U.S. Senator Chris Dodd (D-CT).
In May, Congress passed The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which outlaws arbitrary increases in interest rates, fees or finance charges. But it didn’t go into effect right away; many of the changes don’t take effect until February.
Senator Dodd has filed a new bill, arguing that his new bill, to make the changes effective NOW, is needed because credit card companies have been “jacking up” interest rates in “a last ditch effort to squeeze customers” before the Credit CARD Act goes fully into effect next February.
I have noticed it from several of my clients that have come in to consult about filing bankruptcy. Some of them would not have filed, if their credit card banks had not suddenly raised their interest rates from 8-10% to 29.9%, the “default” rate of interest.When the interest rate is that high, all you are paying is interest, so people lose hope of ever paying their debts off.
I don’t understand what these banks are thinking. Do they want people to file for bankruptcy? Sen. Dodd’s bill is not likely to pass, but at least his heart is in the right place.