While the new credit card rules that are just taking effect do not legislate any maximum interest rate on the card, issuers will from now on have to give a 45 day warning of any interest rate increase.
The credit card bloodsuckers are already adjusting. First Premier, an issuer of subprime credit cards, which have tiny credit limits but are larded with fees, has already concocted a new $45 “processing fee” to get around the new law.
Prepaid cards are another semi-scam to watch out for: it can cost up to $30 just to buy the plastic card, depending on the issuer.
With payday loans, consumers — at least those who live in New Hampshire or can borrow from a shop there — are somewhat protected. As Kysa Crusco’s New Hampshire Family Law blog points out, the Granite State capped payday loan interest rates at 36% with a law that took effect last year.
Who would have ever thought a few years ago that credit card rates would nearly converge with the rates of the payday loansharks? I suppose if the payday folks were willing to concede a few points, we could even have the spectre of consumers taking payday loans to pay their credit cards. Amazing!
By Doug Beaton