August 14, 2022

Bucks: Credit Card Rules Make Pricing Clearer

Daniel Acker/Bloomberg News

New credit card rules meant to protect consumers have made pricing clearer, and haven’t made credit less available, a new study says.

Despite concerns raised by the credit card industry about the Credit Card Act of 2009, direct mail offers keep arriving in consumer mailboxes at a pace “consistent with economic conditions,” says a report from the Center for Responsible Lending. The act took effect in February.

Plus, the difference between the stated rate on credit card offers and the rate consumers actually pay narrowed markedly in the wake of the new law, the report found. From 2004 to 2008, that difference widened to “unprecedented” levels, the study said. But the gap has narrowed considerably since the CARD Act was passed. The current gap is about 0.2 percentage points, down from 2.3 percentage points at its peak.

The actual rates consumers have paid on credit card debt have remained level, once the economic downturn is taken into effect.

The study examined five sets of data, including rate information from the Federal Reserve, which tracks what consumers are actually charged on the average open account, not just what consumers are offered in the mail. It also examined bank call reports filed with the Federal Deposit Insurance Corporation.

“Because price transparency fosters competition,” the report said, “the long-term effect of the CARD Act is likely to be lower costs for consumers.”

Have you noticed any change in the quantity of credit card offers you’re getting in the mail?

Article source: http://feeds.nytimes.com/click.phdo?i=8f46379ffb61987f3d496501b9a29903

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