When I first read the Credit Card Accountability, Responsibility and Disclosure Act, or the CARD Act, I remember shaking my head in disbelief.  I understood instantly that it was nothing more than feel good legislation that allowed Congress to get some good press on bad legislation. 

Turns out I was right.  Since passage of the law, banks and financial institutions have steamrolled customers with increased fees, rate hikes and other costly changes that are pushing many clients into default and even bankruptcy.

According to an article that I read at RedTape Chronicles "Consumer Action says since spring, banks have engaged in arbitrary interest rate hikes, increased fees on balance transfers, added annual membership fees and dramatically raised minimum payment requirements."

There is not a day that goes by when I don't receive multiple phone calls from clients telling me that they could afford the payments a few months ago but the rate hikes and increased minimum payments have pushed them over the edge.  They are asking me for help because the only other option is Bankruptcy.

Here are some of the things I personally am seeing happen:

1.  Minimum payments are being doubled in many cases.  If a consumer was on the edge before, this increase puts them over the tipping point.

2.  In a rush to beat the legislation deadline, Credit Card companies are increasing interest rates, thus raising minimum payments more than would have happened under the legislation.

3.  When clients call for help, they are told - too bad, pay or we will harass you with 25 phone calls a day.

The law was a sham to begin with.  It did nothing to change universal default and in fact didn't change any of the tricks and traps the industry has become known for.  All it did was demand that the credit card companies give 45 day notice if they are going change the terms of the agreement.  There is absolutely nothing in the bill for the consumer and no recourse for the consumer other than to close the account.

Unless we as consumers understand what is happening and fight back, these companies will continue to ruin the financial futures of millions of Americans.  Worse, they will force increased demand for social services as we push people into financial ruin.

I am seeing people who have lost their jobs using retirement income to keep current on credit cards.  They are refusing to work with customers in hardship until after the credit is already ruined. 

I don't know what the answer is, because Congress is in bed with these companies. Here is what I want to see happen:

1.  Eliminate the use Universal Default  immediately

2.  Regulate the use of FICO scores to new credit only.  There is no reason that FICO scores need to be viewed by potential employers or other creditors unless new credit is being applied for or the job requires security clearance.

I am Kate Bourland. I help my clients get out of debt, get loan modifications and establish a debt free lifestyle. We Guarantee our Loan Modifications. You can reach me at 530-419-3967.

http://www.katebourland.com