REFORM AND REACTION

REFORM AND REACTION

According to Consumer Action's 2009 Credit Card Survey, released earlier this month, lenders are raising the cost of credit in anticipation of credit card reform, which began on Thursday.

Of the 39 cards reviewed, Consumer Action's researchers found that every single card had at least one practice that will be outlawed in 2010 thanks to the Credit Card Act.

HIGHLIGHTS:

•The interest rate of the 34 variable-rate cards surveyed averaged 13.20 percent. That's lower than the 2008 average of 14.25 percent, but the prime rate used to set these variable rates is 2 percentage points lower than last year.

•More cards have annual fees. In 2008, 35 cards surveyed had no annual fee. This year, 31 cards have no annual fee.

•Fewer cards have fixed rates this year; 54 percent of the fixed-rate cards surveyed in 2008 are now variable rate cards.

•Some credit cards had outdated terms online.

•Some issuers are raising fees for balance transfers, foreign transactions and cash advances.

Read the full survey: www.consumer-action.org/downloads/english/

CA_News_CC_09.pdf.

Source: Consumer Action