More people have been relying on their credit cards to make ends meet during this recession. Consumer activists complain that banks are taking advantage of that by arbitrarily raising interest rates and imposing more penalties that cause more people to default on their credit card payments.
Jamie Court is president of Consumer Watchdog. He spoke with KPCC’s Larry Mantle.
Jamie Court: “What I think has changed is that the credit card industry, which is the banks, have been losing a lot of money, and they’re finding more and more ways to tack on added fees. Late fees for payments that are very close to on time. Requiring payment of lower interest rate balances first.”
Nessa Feddis, senior counsel for the American Banking Association, says new regulations take effect next year that will protect consumers from arbitrary interest rate increases. But Feddis also points out that interest rates actually dropped about a point for the 12 months that ended in November.