I knew that the exclusion would be in the new laws. When I found a copy of the Credit Card Accountability Responsibility and Disclosure Act, I immediately went to the section that detailed when credit card companies can raise your rates.  For the most part, this new law stops credit card companies from utilizing the Universal Default Clause. This is the part of the credit contract that allows the credit card company to change the terms and conditions of the credit agreement for really no reason.  However, there are still parts of the law that give the credit card companies the ability to raise rates.

If you are over 60 days late, they can raise your interest rates.  Section 171 Part 3 is where the credit card companies are going to get millions of Americans.  The law states that “an increase (in interest rates is allowed) due to the completion of a workout or temporary hardship arrangement by the obligor (debtor) or the failure of the obligor (debtor) to comply with the terms of a workout or temporary hardship arrangement.”

IN PLAIN ENGLISH – If you rework your credit card debt, they can raise your rates.  A debt management program is a workout.  What these companies do for (to) consumers, in my opinion, fit the exception that is stated in the new law that allows credit card companies to raise interest rates and charge fees.  Why is that significant?  The credit card industry has put together this new campaign to “help” people who cannot make their payments.  The site is www.helpwithmycredit.org.  It is billed as a site you can go to get educated on your options.  Actually, it is a front for consumer credit counseling and basically steers you towards a credit counselor who then pitches a debt management program or a workout.  Plus consumer credit counseling is in overdrive advertising their services.

I believe that the credit card industry will steer as many people as possible towards those programs in order to get as much of the outstanding debt as possible away from the protection of this new law.  It is actually ingenious.  The credit card industry has always been ingenious in finding ways to make as much money as possible at the consumer’s expense.  As I stated yesterday, Congress is going to make sure that their campaign contributors (the credit industry) are just fine.

You not only need to read the fine print of credit card agreements. You also need to read the fine print of the credit card laws.

Tags: Bob Brooks, campaign contributors, Congress, Credit Card Accountability Responsibility and Disclosure Act, Credit Card Companies, credit card debt, Debt, Deceptive Money, Prudent Money, rates, Universal Default Clause