Consumers already benefitting from CARD Act

According to a recent survey conducted by TransUnion, the percentage of credit cardholders who were 90 days late in paying their bills dropped in the first quarter of 2010. This is due in a large part to the fact that banks can't hike credit card rates for no reason and with no warning, leading to lower minimum payments, a central legislative change brought about by the CARD Act.

But that's no surprise to us. We here at WalletPop expressed our considerable skepticism (one which was shared by many of you who comment on our posts) when the banking industry wrung its hands and predicted all sorts of dire consequences after the CARD Act was implemented in February. They warned consumers about higher fees, higher interest rates and outright denial of credit if lawmakers forced them to adhere to some basic rules and not gouge the heck out of their loyal customers.

In addition to fewer customers paying late and getting dinged with late fees, there are other signs that the CARD Act is having a beneficial effect on cardholders. We already told you that one big threat, that of sky-high fee increases, didn't come to pass. And while many credit card customers reported having their interest rates hiked prior to the CARD Act going into effect, that took place primarily because lawmakers gave banks such a long heads-up that they had the chance to sneak in a whole bunch of consumer-unfriendly practices before the new laws kicked in.

By and large, consumer watchdog groups and advocates say the CARD Act is a success, even though many also hasten to add that the creation of a Consumer Finance Protection Agency would go a long way toward keeping banks in line in the future.

An exec from TransUnion is quoted as calling the decrease in nonpayments a move "in the right direction." For the millions of Americans who spent months or years trapped into paying only the minimum because their rates were suddenly hiked, this is surely an understatement.