Credit card companies already getting around regulations

09.13.09
By Nicholas Storie

The first phase of credit card reform legislation recently came into effect, giving consumers a better chance to pay down their credit card debt, but it would appear that credit card companies have already found ways to circumvent the rules and have discovered loopholes in the law.

Although credit card companies are required to inform a card holder 45 days notice of a rate change, BusinessWeek notes that the provision doesn't apply to variable rate cards. Because of that, according to the magazine, more companies are moving consumers into these variable rate cards which see their interest rates fluctuate.

In an effort to gain back some of the money they have lost on credit card defaults during the economic downturn, banks and credit card companies are also turning to fees for any number of things.

The magazine notes that one card issuer, Fifth Third Bank, charges a $19 tariff if the card is not used in 12 months, which the company says is meant to "encourage active use of accounts and to offset the increasing costs of accounts."

Card companies are also looking to offset losses by targeting more affluent consumers and those with the best credit scores. Recent research from Mintel Comperemedia found that card companies had decreased overall credit card offers by 8 percent in the second quarter of this year, but offers of premium cards had risen 28 percent over that same time.

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Credit card companies have already found ways to get around regulations