Fed works on credit card rules
TEXT OF STORY
Scott Jagow: Today, the Federal Reserve will put aside its worries about inflation and focus on your credit card. The Fed’s expected to endorse a crackdown on banks who get sneaky with credit card fees and interest rates. More now from John Dimsdale.
John Dimsdale: Consumer advocates say credit card companies aren’t playing fair.
Travis Plunkett: They use gotchas and trap doors to boost the fees and the interest rates that they charge people.
Travis Plunkett with the Consumer Federation of America says he’s glad to see regulators consider limiting interest rate increases on money already borrowed at a lower rate.
Plunkett: Banks will not be able to increase your interest rate on existing balances for a supposed problem with another creditor, such as paying a parking ticket late or paying a library fine late.
But the American Bankers Association’s Nessa Feddis says the new regulations, which have only been proposed in outline form, could make credit cards more expensive.
Nessa Feddis: The proposal limits the ability to price based on risk. If the riskier borrowers are paying less, it means the safer borrowers have to make up for that, so they’ll probably pay more.
Congress is considering even tougher limits on credit card rates, fees and marketing practices.
In Washington, I’m John Dimsdale for Marketplace.
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