Credit Card Complaints Decline Significantly in Early 2010

On the heels of a year in which credit card companies quite frankly abused their customers, credit card complaints received at Smart Balance Transfers are showing a significant decline.  Much of this decline can be attributed to the fact that most credit card companies went on the offensive last March and stampeded consumers throughout 2009, culminating in a widespread interest rate increase by Citibank that left many consumers with 29.99% interest rates.

During 2009, the most common credit card complaints, in order of severity, were retroactive  interest rate increases, credit limit decreases, and account closures.  Of these three tactics, the next phase of the new credit card laws known as the CARD Act will outlaw retroactive interest rate increases, perhaps the most viscous tactic in the old credit card company playbook.  Unfortunately, however, the new credit card laws will still allow credit card companies to engage in a number of practices that will likely drive complaints as the year progresses.

One practice that may lead to a new influx of credit card complaints in 2010 is the ability of banks to raise rates on new purchases with 45 days notice.  Essentially, this option can be used by credit card companies to penalize customers whose credit profile changes by forcing them to pay significantly more if they with to continue using their cards.  While this is by no means as viscous as retroactive rate increases, it may leave many people holding credit cards with 20% interest rates, often when those people need to use their cards most.

Account closures and credit limit decreases are not covered by the new laws, and credit card companies can wield these tools at their discretion.  Should the economy fail to improve, banks may implement these tactics to cut off credit to consumers who catch the attention of risk averse underwriters and their computer models.

The present lack of  complaints being levied against the major credit card companies may only be the calm before the storm which could take place after February 22nd, the date the new laws take effect.  However, it is also likely that many credit card companies have already taken drastic measures to protect themselves and a new normal has begun. 

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