User uShare Login | Register
Login
Register

Along with posting photos, videos, and stories, your uShare account lets you post Classified Ads, recipes on What's For Dinner, and Announcements.


37° View Weather Current Conditions Sioux Falls Change Location
Set Weather Options

RADAR LOCATION

TEMPERATURE LOCATION

Share your Photos, Videos, and Stories on uShare! Click here to get started.
Winter Returns To KELOLAND This Weekend. Click here for details. 

 

News

[0] My Saved Articles
Back to all news

Business

Find local businesses
on the KELO Pages!

 

When Interest Rates Can Rise

November 30, 2012, 9:50 PM by Angela Kennecke

When Interest Rates Can Rise
SIOUX FALLS, SD -

What you don't know about your credit card could hurt you. The 2009 card act was supposed to make credit card issuers more transparent and prevent them from imposing certain fees. But a recent study by a credit card comparison site shows that consumers still aren't always getting everything they need to know from their credit card company.

It's a tactic credit card companies have used for years, pay your bill late and you'll get socked with a "penalty" interest rate; meaning your rate will skyrocket.  The Credit Card Act of 2009 was supposed to force credit card companies to limit that practice and disclose to you when it could happen. 

Card Hub.com's  2012 Interest Rate Repricing Study looked at how well the ten largest credit card issuers follow those regulatory disclosure requirements.  It also analyzed how effective government regulators are in making sure the companies provide what you need to know about interest rate changes.  It blasts the Federal Reserve's disclosure model.

"They have essentially told them whatever is in the law, you don't need to disclose and instead, you can use ambiguous terms to tell people if they make a payment late, their interest rate might skyrocket to penalty APR which is completely misleading, that's not true," Odysseas Papadimitriou founder of Card Hub.com said.

Card Hub's founder says your interest rate can only go up after you have missed three payments in a row.  And even then, by law, if you pay the next six payments on time, your rate must go back down.  

Your interest rate on existing balance can't change term for any reason other than 60 days delinquent," Papadimitriou said.

Seven of the ten largest credit card issuers apply Penalty APRs for being delinquent. USAA, U.S. Bank, and Wells Fargo are the only major issuers that never use Penalty APRs.

The study found that of the banks that do impose Penalty APRs, American Express' and Bank of America's disclosures are easiest to understand for the consumer.

But be warned, while your existing balance is protected, your future purchases may not be. 

"Credit card companies still have right to change interest rate on future transactions at any point in time and for any reason," Papadimitriou said.

The Consumer Financial Protection Bureau has introduced a prototype disclosure for credit card companies to provide consumers with more information that would fill in the gaps in the Federal Reserve's model.  It is currently open for comment and has not yet been implemented.

Previous Story

Next Story


Comments





Sponsored
Find Local Businesses on KELO Pages!

View business

You may also like

Website Ranks The 25 Best Jobs For 2015

1/28/2015 5:12 AM

Physician assistants topped the list, which has an average base salary of $111,376.

Full Story
Refinery Issues Lead To Higher SD Gas Prices

1/27/2015 11:10 AM

For the first time in months, South Dakota's average gas price rose last week.  According to a AAA report, the increase is due to a series of...

Full Story
Proposed Egg Farm Drawing Complaints In Turner County

1/27/2015 7:30 AM

A Sioux Falls-based company hopes to more than double the number of egg-laying hens in South Dakota by opening a large chicken operation near Parker.

Full Story
Five Ways Unmanned Drones Could Affect The American Food Supply

1/25/2015 5:38 PM

Herding cattle. Counting fish. Taking an animal's temperature. Applying pesticides.

Full Story
Omaha Writer To Feature Queen City Bakery

1/28/2015 6:00 PM

Queen City Bakery in Sioux Falls has developed a large fan base locally and now people from all over can experience why. The business is set to be fea...

Full Story | Watch


Events