New credit card rules have benefited consumers

A year after new credit card rules took effect (see details of the new rules in our previous entry: New Credit Card Rules ), the Pew Charitable Trusts Safe Credit Cards Project checked to see if the predictions of disaster made by the credit card issuers had come true. The short answer is “NO.” As is often the case, opponents grossly exaggerated the problems.

Pew found that interest rates have stabilized. Median advertised rates from cards issued by banks are running between 12.99% and 20.99%, depending on history; while cards from credit unions charge median rates from 9.99% to 17%. Penalty interest rates (for those who make late payments), and cash advance interest rates have also held steady.

Pew also found that transaction surcharges for cash advances, international purchases and balance transfers have changed only slightly. Penalty fees, such as those for late payments, have come down since the law took effect last year, Pew found, and most banks and credit unions (89%) have eliminated those very annoying over-limit fees.

Pew said that the new regulations have “created a new equilibrium” where a number of the policies the organization found to be “unfair or deceptive” a year ago have disappeared.

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