Fed Proposes Reforming Credit Card Practices

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  pavanindia05/02/08 Report as spam
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  Need for Credit Card Regultaions

  Credit Card interest charges need to regulated, this is more relevent in the present times when consumers are going through tough times due to global financial and food crisis.
  
  The interest charged by the Credit Card on outstanding balance should be pegged at 1 or 2 percent above the consumer lending rate of the respective bank.
  
  Today, most of the credit card companies charge, 2.25 to 3.00 percent per month, on the outstanding balance. This is almost 2 times the consumer lending rate for personal finance. Pegging Credit Card interest to the personal loan rates adopted by the respective bank will bring fairness and control the banking industry against unfair practises.
  
  In addtion, many of the Credit card companies advertise 45-days free credit from the date of purchase. This is ignored if the Consumer has oustanding balance and card companies resort to charging interest on the new purchase right from the day one. This practise is highly deplorable, should be controlled through strong regulation and Credit Card companies should extend the free credit for all new purchases irrespective of the outstanding amount.
  
  I hope the Credit Card practises are well reviewed, tied to the normal banking credit practises and come under watchful eye of regulators around the world.
  
  Pavan Kumar.