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White House to Look at Credit Card Fees

Ylan Mui

There was an interesting story in the Wall Street Journal today about the White House preparing to look closely at credit card practices.

A subscription is required to read the WSJ, but we'll sum it up here for you here! The article is based off an interview that White House economic adviser Larry Summers gave during a Sunday talk show. There are few (ok, zero) details about what President Obama would actually do, but there are two major bills working their way through Congress right now that would speed up a host of reforms currenty slated to take place in 2010.

We've blogged before about how the credit card industry has been targeted for "unfair and deceptive practices," such as raising rates even if you are late on a payment for a different card and applying payments to the card with the highest interest rate. What do you think should be done?

By Ylan Mui  |  April 20, 2009; 1:40 PM ET
Categories:  Consumer News , Ylan Q. Mui  
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Comments

Isn't is also true that a credit card company can also raise the rates on a card if you are late with a gas company payment?!? That is outrageous, especially when someone has never been late on the credit card payment. Does this make sense? No.

Posted by: rjrjj | April 20, 2009 2:47 PM | Report abuse

Theoretically, yes. It's a principle known as "universal default" -- in essence, anything you do to affect your credit risk can be cause for raising your credit card rate. It's one of the practices that is targeted in the congressional bills as in the new Federal Reserve regulations that take effect in 2010.

Posted by: ylanmui | April 20, 2009 4:29 PM | Report abuse

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