dcsimg
   Facebook


rebuild.org finance news:

Back to Latest News Headlines

Fed Surveys Consumers About Credit

[Aug 1, 2007.]

 

The Federal Reserve Board has now released its report on credit card solicitations and applications. The findings are significant, since the study included personal one-on-one interviews with American consumers.

The whole point of the study was to help make the terms and conditions of credit card accounts simpler for customers to comprehend. To that end, the Fed has produced a sample version of a possible disclosure form. Experts say the Fed version appears to be much clearer and more user-friendly than the current disclosure forms that are in use.

Under the Fed plan, credit card companies would have to let customers know in writing whenever there's a change in the terms of the account. Such a notice would include information about possible penalties that might await unsuspecting consumers. Credit card issuers would also have to give consumers plenty of advance notice when such changes are in the works.

The Fed sample appears to be an enhanced version of the so-called "Schumer Box" which the Royal Bank of Scotland issues with its cards.

Consumer advocates are likely to welcome efforts to make credit card agreements easier to understand. The more information a consumer has, the better-equipped he or she will be to manage monthly credit card bills. Such disclosure can also help customers to avoid "hidden penalties" which can have a significant effect on a family's monthly budget.

While credit card companies can claim that they currently provide all necessary information to consumers, some of that information reads like a law school textbook. Disclosure forms in particular can be difficult, if not impossible, for the typical consumer to understand.

Still, consumer advocates indicate that there are additional measures credit card companies could take in order to help consumers avoid massive credit card debt. For instance, some consumer activists are calling on credit card issuers to scale back questionable corporate practices such as universal default and double-cycle billing.

Julie Ann Amos
August 1st 2007

Recent News


  • Gaining Credit May Be Getting Tougher for College Grads
    A change in practices in the U.S. credit card industry may mean that it will be tougher than ever for college graduates to establish credit. [01.08.07]

  • Mortgage Rates Unmoved
    Prospective homebuyers received some encouraging news recently, thanks to the fact that rates on 30-year mortgages stayed steady. The decision to maintain the status quo might have been surprising to some, given all the concerns being raised about inflation at this point in time. [01.08.07]

  • New Credit Card Practice Under Scrutiny
    Some universities have been trying to cut costs by issuing university business credit cards to their employees. The practice can be less expensive than other means of trying to pay school bills. However, Arizona universities have run into a stumbling block in their effort to promote cost efficiency: financial abuse. [July 31st 2007]

  • New Credit Card Scam Uncovered
    Internet experts say that credit card thieves are employing a new tactic: making donations to charity using pilfered charge cards. The strategy may enable thieves to steal more money than was possible in the past. [July 31st 2007]

  • Consumer Borrowing Rises Dramatically
    The Federal Reserve is reporting that consumer borrowing skyrocketed in May—the greatest increase in credit card debt in 6 months. Consumer credit jumped 6.4%, which was a monumental increase over the 1.1% jump in April. In fact, the increase in May was just about twice the amount that financial observers were expecting. [July 31st 2007]

  • Credit Card Companies Offer New Insight Into Consumer Spending
    The credit industry has uncovered some surprising news about consumer spending. Apparently, young people are going to become bigger spenders than their Baby Boomer parents. [July 25th 2007]

  • Reasons for Bankruptcy are Varied
    A new study indicates there are a myriad of reasons behind consumer bankruptcies. The report shows that the vast majority of respondents, 63%, said they were overextended on credit. [July 25th 2007]

  • Fed to Protect Homeowners from Mortgage Abuse
    The chairman of the Federal Reserve Board is determined to ensure that prospective homebuyers are shielded from lending practices that could be considered abusive—a move that some legislators say is long overdue. [July 25th 2007]




  • New Hope on the Credit Card Front
    While the housing market appears to be sluggish and the overall economy may appear to be a mixed blessing, the outlook appears to be bright for credit card companies and their cardholders. [July 19th 2007

 

news subscription:

Easily subscribe to the rebuild.org news feed.

Read our news without even visiting our site!

Feedburner
Subscribe to our news

 

news archive:

Rebuild.org monthly news archive