Credit Cards

Federal regulators on Thursday moved to protect consumers from arbitrary hikes in interest rates and unfair deadlines for paying credit card bills. But there's a catch. The new rules would not take effect until July of 2010. Why wait so long? Days after the Federal Reserve lowered its benchmark interest rate for banks to virtually zero, banks will still be able to slap credit card customers with outrageous interest charges - as much as 30 percent in some cases - for another year and a half. U

Federal regulators on Thursday moved to protect consumers from arbitrary hikes in interest rates and unfair deadlines for paying credit card bills. But there's a catch. The new rules would not take effect until July of 2010. Why wait so long? Days after the Federal Reserve lowered its benchmark interest rate for banks to virtually zero, banks will still be able to slap credit card customers with outrageous interest charges - as much as 30 percent in some cases - for another year and a half. Under the new regulations, interest rate increases would only apply to new credit cards, future purchases or advances, not on existing account balances. They also would put an end to certain practices that lenders have employed to squeeze more money out of cardholders, such as allocating all payments to balances with lower interest rates when a borrower has balances with different rates. Senator Bernie Sanders wants stronger protections sooner. He also has proposed a cap on credit card interest rates.

"What has happened over the years is that we have deregulated the banking industry so lenders are ripping people off," Sanders said.