Fed Says Let's Make Credit Card Rules Tougher

Here is the good part about the newly proposed credit card rules. They will forbid increase of credit card interest rate during the first year when the account is opened. The second good part is that the companies can't increase the interest rate on the balance of the account.

This is a very good news for the credit card users, many of them are struggling to find ways to consolidate their debt. Some studies show the average credit card debt in USA is nearly 10,000 dollars.

In fact it is the increase of the interest rate in the existing balance on her account that gave birth what is known as Debtor's Revolt.

One aspect in the proposed rules that some may find controversial is the proposal to provide credit cards to people who are under the age of 21 without having someone to co-sign for it. Is this possibly opening a new door for another debt increase among your people? It's not known yet. However, many parents will not want to have their children to have credit cards without adult co-signature or supervision.

"This proposal is another step forward in the Federal Reserve's efforts to ensure that consumers who rely on credit cards are treated fairly," said Fed Board Governor Elizabeth Duke said in a statement.

The proposal will be open for public comments for 30 days. Here is out comments. For the part of the proposal that will allow the credit card companies to issue cards to people under 21 without co-signature, we propose those to be only prepaid credit cards. This will give some parental control about how the teenagers will use their credit cards and keep their debt at a more manageable level.

Written by Armen Hareyan
HULIQ publisher.