Little has changed so far in credit card industry

10.28.09
By Nicholas Storie

The credit card industry may be about to deal with reforms that are supposed to dramatically change some of its practices, but a recent report says that they may still have a considerable way to go.

According to the report from the Pew Charitable Trusts, all of the credit cards offered online by leading issuers continue to engage in a number of the practices that will be banned by late February under the reform legislation.

For example, the report says that advertised credit card interest rates rose by 20 percent in the first two quarters of 2009, even though the companies benefited from lower lending costs in that time.

"Some of the most harmful practices have actually grown more widespread - not one of the bank cards reviewed would meet the legal requirements outlined in the Credit CARD Act, which is bad news for consumers," said Shelley Hearne of the Pew Health Group.

The report also found that 90 percent of bank cards continue to have interest-rate penalties triggered by making one or two late payments in a year, and that 99.7 percent of cards allow issuers to increase rates on outstanding balances.

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Many companies have been working to boost their profits before scheduled reforms take effect in February.