Credit card companies sucker consumers for more debt during the housing boom. During the housing boom in the 2000’s when house prices were escalating rapidly, homeowner’s were seeing corresponding increases in their net worth. During this same time, banks offered credit card holders increasing credit limits. Many homeowner/credit card holders saw their credit limits double or even triple.
This turned out to be a recipe for disaster. All savvy consumers know that credit card issuers actually thrive on consumer disasters. Lets face it, the banks are making a very good return when consumers are struggling to pay their credit cards. The banks hit the poor consumer with late fees and even increase the interest rate to over 30% when consumers are late with payments. Banks have tripled rates for many consumers.
The credit card banks mailed out a whopping 25 billion credit card offers in the period from 2001 to 2007. That’s 25 BILLION! It must be a good business. Like stealing money from a child!
Well, now that the housing boom is slowing and home prices are going down across the country, interest rates are increasing and gasoline prices are going up, consumers are struggling to make their payments. Now, consumers are desperately seeking a way out of the debt.
Should banks be able to increase interest rates up to 25% to 32% when a borrower is late with payments? Senator Robert Menendez doesn’t think they should and is sponsoring the Credit Card Reform Act that will prevent banks from using predatory practices.

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