Credit Card Rates Stand at 4 Year High MarkJanuary 12, 2012 - 5:05 pm
The current rates of credit cards are as high as they have ever been in the last four years with the national average on new card offers standing at 15.14%. Just six months ago, the rates were averaging 14.75%. These rates are just the national average and many credit card holders are actually paying much higher rates.
Unlike other interest rates including those for mortgages which are seeing 50 year lows, credit card interest rates are getting higher. Even the best customers are paying around 3.25% on monthly interest charges.
Experts contend the skyrocketing rates are largely an ‘unintended consequence’ of the Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) which was passed by Congress in order to stop unfair practices by the credit card industry and better protect consumers.
Unfortunately, it appears the results backfire in some aspects and the fallout is actually hurting consumers. Credit card companies have had to make it through the loopholes and have ended up charging consumers more in interest since they are now regulated in how much fees and penalties can be assessed.
Other issues that have sprung up for consumers include the credit card companies increasing amounts of existing penalties, lowering consumer credit limits, and closing the account completely. Consumers that do not maintain a good track record of responsible spending and monthly payments can end up owing sizeable amounts of interest and penalties. Credit reports will also be affected and the all-important credit scores will decrease.
Experts believe the interest rates on credit cards will come down throughout 2012 but consumers are advised to contact their credit card companies in an effort to negotiate a lower rate. Not all companies will be accommodating to such a request but it has helped many consumers fight back against the rate increases.