Read the Fine Print!

In response to the credit crisis and years of complaints, the Federal Government enacted new laws in February this year that changed the rules for credit card issuers.  Not suprisingly though, the credit card compaines have figured out new ways to increase their profits at the consumer's expense.

Now that credit card companies have to give you fair warning that they are increasing your interest rates or changing your terms in any way, you need be aware of the terms of your cards but not everyone reads the fine print!  A recent article in Consumer Reports Magazine detailed several ways that credit card companies are making up for lost revenue.

In one instance they found a bank offering a card with an annual percentage rate of 79.9%! Most credit card interest rates are based on prime plus a spread.  The prime rate is currently very low and yet we have seen credit card interest rates rise an average of 13%.   Based on the current spreads, if the prime were to return to the 8.25% high in 2007, some credit card interest rates could go as high as 35% even for borrowers with good credit.

And adding insult to injury, more and more credit card companies are now charging annual fees, balance transfer fees, hefty late fees, and some have even implemented "inactivity" fees charging you for NOT using your card.  With millions of customers those fees can really add up to a lot of dough.