Because the new laws, once effective, will prevent a hike on existing balances, the CCC's have decided to hike the rates prior to effect and then possibly offer promotional rates after so that they are not cornered.
There are two applicable sections of the Credit CARD Act of 2009:
SEC. 101. PROTECTION OF CREDIT CARDHOLDERS.
ADVANCE NOTICE OF RATE INCREASE AND OTHER CHANGES
‘‘(1) ADVANCE NOTICE OF INCREASE IN INTEREST RATEREQUIRED.In the case of any credit card account under an
open end consumer credit plan, a creditor shall provide a written
notice of an increase in an annual percentage rate (except
in the case of an increase described in paragraph (1), (2),
or (3) of section 171(b)) not later than 45 days prior to the
effective date of the increase."
SEC. 171. LIMITS ON INTEREST RATE, FEE, AND FINANCE CHARGE
INCREASES APPLICABLE TO OUTSTANDING BALANCES.
(c) REPAYMENT OF OUTSTANDING BALANCE.‘‘(1) IN GENERAL.—The creditor shall not change the terms
governing the repayment of any outstanding balance, except
that the creditor may provide the obligor with one of the
methods described in paragraph (2) of repaying any outstanding
balance, or a method that is no less beneficial to the obligor
than one of those methods."
I think a lot of card users will start to let some of their accounts default to get back at the CCC's, so the companies are bracing themselves.
Call Citi's account retention department and see if they'll change the interest rate for you. They didn't jack my account to 29.99% but it was raised to 18.99%. So I called and told them that wasn't working for me and they dropped it to 11.99%.
In today's environment the answer is clear.....pay down your debt as fast as possible. This sounds easy, of course, but a super efffort has to be made to get those balances down as low as possible as quickly as possible. If this means cutting back on your way of living so be it. Interest rates are going up and CL's are going down, partially through regular market forces and partly because of the unintended consequences by the laws that have recently been passed to try to 'help'. Just being 'current' and carrying balances today is not the right answer. More people have to go on the 'beans and rice' style of living of Dave Ramsey.
If people are going to let their accounts default to get back at the CCC's they are only hurting themselves in the long run. We all got into this mess by signing for all those charges ourselves, and we are responsible for getting ourselves out.