New rules would fix 'fixed' credit card rates

Credit card reform: The fine print of proposed changes to Regulation Z

By Connie Prater

A proposed change to Regulation Z will end the current practice of allowing card issuers to advertise "fixed" rates that can change whenever the issuers feel like it. Currently, issuers can offer a "fixed" rate credit card -- and change the rate 15 days later or "at any time for any reason." Under the proposal, the term "fixed" will have meaning: If no time period is specified, the rate will remain fixed as long as the account is open and payments are kept current.

45 days' notice Fixed rates APR disclosures Fee disclosures Account opening disclosures Periodic statement disclosures Changes in credit card terms Minimum payments Subprime credit cards

"Clarification of the term 'fixed' interest rate is long past due ... " says Corky Neale, Memphis Debt Collaborative/RISE Foundation Read more (Page 1)

Richard Painter, a credit cardholder from Troutville, Va., calls his disappearing "fixed rate" an example of "bait and switch." He writes: "Our attempts to pay off our credit cards have been made almost impossible by Capital One and other credit companies policies of increasing our 'fixed rate' every time our total balance drops ... " Read more

Jodi Anderson Thompson, an assistant staff counsel for the Florida Bar, writes about the disappearing "fixed" rate: "I have always felt that this was fraudulent conduct on the part of the company." Read more

To comment on this story, write to: editors@CreditCards.com

Published: December 26, 2007

	Three most recent Legal, regulatory, privacy issues stories: Refund anticipation loans coming to an end – After years of bilking consumer tax refunds through refund anticipation loans fees, tax preparers are finally closing them down ... Debit card fraud can leave you in the lurch – While consumer protections exist in case your debit card's been hijacked, you can still end up on the hook for fraudulent purchases ... Supreme Court backs credit card binding arbitration – The court's 8-1 ruling is a setback for consumer groups, who see arbitration as a contract clause that gives card issuers an unfair edge in disputes ...

	CreditCards.com's newsletter Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!