October 8, 2009 3:37 PM
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Credit Card Companies: Legalized Drug Dealers Strike Again
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Yesterday, Bloomberg reported that Wells Fargo plans to raise interest rates on all credit card customers by 3% on November 30th. Funny coincidence - House Financial Services Committee Chairman Barney Frank wants to speed up the enactment of the Credit Card Act from February 22, 2010 to December 1.
Sometimes I wonder just how low the credit card companies can sink, but then I remember that some of the card company practices are akin to legalized drug dealing. Once they got you hooked, it sure is hard to get off the stuff. For more on this analogy, check out my appearance on CNET's 404 podcast with my pals Jeff, Wilson and Justin.
Yes, I know that the users are responsible for their actions too, but until the credit card reforms became law, the government made it too easy to fall prey to the dealers. That said, there are signs that Americans are kicking the credit card habit.
The Federal Reserve reported that total consumer credit outstanding fell $12 billion in August, or a 5.8% seasonally adjusted annual rate. It was the seventh straight month of declines, the longest stretch since 1991. The numbers suggest that both borrowers and lenders are pulling back and over the long haul, that's a very good trend.
That's all well and good Jill, but what if you still have that nagging debt hanging over your head? Check out this video - Consumer Reports Senior Editor Mandy Walker gives some great advice on credit cards.
More on MoneyWatch:
•Should You Worry About the Dollar?
•29 Fees We Hate Most
•Why You're Paying More ... for Everything
•No Kids? You're Probably Wasting Your Time
•How to Lower Your Property Taxes
•End of Recession? Not So Fast
(CBS)
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Jill Schlesinger Jill Schlesinger, CFP®, is the Editor-at-Large for CBS MoneyWatch. She covers the economy, markets, investing or anything else with a dollar sign. Prior to the launch of MoneyWatch in 2009, Jill was the chief investment officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
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