Many consumers are quickly learning that the old method of getting a lower interest rate – calling the lender and asking – no longer works.
That is because the new Credit Card Accountability, Responsibility and Disclosure Act has clamped down on a number of other practices that have cut into the lenders’ bottom lines, says a new report in the Christian Science Monitor. As a result, credit card companies are going to continually raise interest rates to keep profits at their current level.
The Monitor said that the difference between the prime lending rate and the average credit card rate is the highest it’s been in six years. Credit card debt rates are likely to increase in the coming months as companies scramble to make up profits lost by the prohibition of high fees.
A recent report from Reuters said that the Federal Reserve is likely to raise its short-term interest rates, which will only result in a further increase in credit card limits, or at least lead to the re-introduction of annual fees that were not outlawed by the Credit CARD Act.