Fed looks into credit card changes
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Scott Jagow: Another thing the Fed’s been up to is looking at credit cards. It wants to impose some new rules on credit card companies, and today’s the last day for public comment on those rules. Nancy Marshall Genzer has more.
Nancy Marshall Genzer: If you’re like me, you receive a lot of promotional offers for credit cards. Many of them come with low introductory interest rates. But those rates could adjust higher. And for card holders who don’t pay off their balances each month, banks have a lot of discretion on how to apply payments.
If you pay slightly more than the minimum, banks can apply the extra money — surprise – to the portion of the balance at the lower rates. That means a fatter balance at a higher rate. That’s just one thing the new rules would change. You would also have more time to pay your bill.
Moody’s Economy.com chief economist Mark Zandi likes the Fed’s proposal:
Mark Zandi: It’s often times a mystery to us how we get charged the interest rates that we do and the fees that we have to pay, and this is an effort to make that all clearer to us.
Lenders don’t like the Fed’s rules. They say they’re still hurting from the subprime crisis. But Zandi says lenders should quit while they’re ahead, because Congress is considering more draconian legislation.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
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