In today’s economy, debt collection and raising interest rates has become an issue even with loyal bank customers with good credit. With the unemployment rate continuing to climb, people have been relying on credit cards very heavily, sometimes even too much. High numbers of cardholders have been receiving letters from places like Citibank, Bank of America Corp., Wells Fargo & Co. and American Express Co expressing that their interest rates could sky rocket to, in some cases, 30% if a payment is missed.What really makes this a problem is that there is no federal law against how high banks can set interest rates. Some states have set caps on interest rates, but few credit card issuers are based in these states. In 1978, the US Supreme Court in the case of Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp. decided that anti-usury laws that regulate interest rates cannot be enforced against national banks. Because of this case, the sky is the limit for these banks and credit card companies.
Does the general public have a chance against these rising rates? Will the new credit reform laws make a difference?
What do you think?
