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CARD Act turns 1

A man shows off some of his credit cards.

TEXT OF STORY

Tess Vigeland: One year ago, the so-called CARD Act that went into effect. It required card issuers to give more than a month's notice before changing interest rates, and it banned terms that would confuse or mislead consumers.

Tomorrow, Elizabeth Warren, special advisor to the new Consumer Financial Protection Bureau, will meet with consumer advocates and industry executives. The topic? Reforms -- and what happens next.

From Washington, Marketplace's David Gura reports.


David Gura: Credit card terms and conditions used to have a lot of legalese, printed in the tiniest font size possible.

Pam Banks is with Consumers Union.

Pam Banks: Companies were playing "I gotcha." They were imposing a lot of fees, tricks if you will.

The CARD Act was supposed to change all that. Peter Garuccio is a spokesman for the American Bankers Association.

Peter Garuccio: I think there have been some good things for consumers in there. They're more empowered now. There's better transparency. There's more certainty on interest rates and things of that nature, but there certainly have been some tradeoffs as well.

He says companies used to change credit limits and interest rates in a targeted way to hedge risk.

Garuccio: Because you can no longer do that, your choices are either to charge everybody a little bit more upfront, or simply not make credit available to that segment of the population.

And that means the cost of a credit card could go up. But a new study says the amount Americans pay on credit card debt hasn't changed.

In Washington, I'm David Gura for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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Did anyone think they were going to just give up revenue...honestly?

Congress and the CFPB can run around sticking fingers in the leaks in the dam, but the demand for credit from consumers and the demand from corporations for continued growth in revenue invaribly means this issue needs a long term solution.

If people only learned to live within their means...

I am wondering when will credit card companies get their hands out of my pocket?

I mean they doubled my rates and 3 years on...never been late before or after and they still refuse to lower them.

The worst thing is I am locked in until my next big purchase because canceling cards or opening anymore would hurt my credit score.

It is time someone set the record straight on this. Because they all offer better deals to new customers then the ones that they took advantage off ahead of the CARD act.

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