If credit cards could talk: "Reforms, what reforms?"

I know everyone is going to be shocked to hear this, but according to Business Week's recent article, "Dodging Credit Card Reform," the credit card industry is trying to find loopholes in the new regulations that took effect in August and will again in February. You could knock me over a feather.

Next thing I know you'll tell me that Jon and Kate are getting a divorce, or that professional wrestling is just entertainment. Credit cards are trying to exploit their customers? I think I need to sit down.

Here's the deal, if you're not aware. Last month, two of the reforms from The Credit Card Accountability, Responsibility & Disclosure Act of 2009 took effect.

From now on, if a creditor is going to increase your annual percentage rate (APR) or make any significant change, defined by the Federal Reserve Board, like raising your fees, they have to give you 45 days warning.

And each statement has to be mailed at least 21 days before the payment due date or grace period expiration date. No more of this, getting your bill and realizing it's due in four days.

OK, so far, so good, but according to Business Week, "there's a loophole: The rules don't apply to variable-rate cards, with rates that float up and down." And so credit card companies are shifting their customers to variable-rate cards. The article mentions that a Bankrate.com researcher estimates that 75% of all credit cards being used this year are now variable-rate cards. That's a pretty big loophole. Not only can the rates on two-thirds of the nation's credit cards change at any time, the 45-day warning and 21-day mailing rules are moot as well.

And then come this February, credit cards won't be able to lodge a fee when consumers go over their credit limit. That'll be welcome relief, but at least one credit card has come up with a new charge to make up for this lost revenue. Again, according to Business Week, Fifth Third Bank just began foisting a $19 fee if borrowers don't use the card for 12 months, which will likely bewilder financially-overburdened customers who are trying to use their credit cards less and more responsibly.

Is it any wonder some people in Congress are proposing a Consumer Financial Protection Agency?

The idea is that the CFPA would be able to come up with a consistent set of rules to protect people from their plastic. They'd also have the power to bring the law down on credit card companies that skirt those rules.

So if you're at all angry, you know the drill. Contact your Congressman or Congresswoman. I'm sure they'll be as shocked as you are that credit card companies are still, in effect, holding customers upside down and trying to shake all of the change out of their pockets.
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