As of Monday morning, new protections are in place for credit card holders. But the much-needed and long-awaited reforms of the credit card industry that take effect today is like finally closing the barn door after all the animals have run away.
As of Monday morning, new protections are in place for credit cardholders. But the much-needed and long-awaited reforms of the credit card industry that take effect today is like finally closing the barn door after all the animals have run away.
During the past nine months, the period from which the reforms were signed into law and Monday when they take effect, the credit card industry has succeeded in aggressively raising fees, interest rates and penalties on consumers — the very things the new reforms now prohibit them from doing.
Congress agreed to the nine-month delay in implementing the new reforms at the request of the credit card companies that claimed they needed that time to implement new administrative procedures necessary to comply with the new rules.
But they did much more than that, and not to the benefit of consumers. By taking advantage of that window of opportunity — and taking advantage of consumers — they put in place all the necessary administrative “rules” to maintain their profit levels by implementing many of the changes they are no longer allowed to do.
U.S. Sen. Christopher J. Dodd, D-Conn., who authored the reform bill and was instrumental in securing its passage, sharply admonished the industry for its practices last week, saying they used this period “to gouge people.” But unfortunately, there is nothing that can be done about it now.
He said Congress will continue to monitor the industry to ensure it doesn’t attempt to further these abusive measures.
The new reforms are strong measures that will put an end to the worst abuses by credit card companies, but they alone are insufficient if individual cardholders don’t also take personal responsibility for their own actions.
By now, we should all be aware of what the new credit card rules are. The safeguards that are now in place to prevent credit card company abuse provide a measure of consumer protection, but they will be ineffective if not accompanied by that personal responsibility.