On April 23rd, the Obama administration will be meeting with credit card industry executives to discuss abusive credit card practices. While the specific abuses have yet to be outlined, there are so many abusive practices to discuss, we imagine the meeting will take quite some time.
Unfortunately, this meeting is slated to take place about 5 months after millions of consumers have been blindsided by massive interest rate increases and severe credit limit cuts. In all likelihood, nothing will be done to help those who have already been victims of credit card abuse. (For firsthand accounts, please see credit card complaints here.)
What, if anything, could come of this meeting? Ideally, the Obama administration can put a stop to the seemingly random interest rate increases that have led to the doubling or tripling of interest rates for many consumers. However, this scenario seems unlikely, as there is nothing illegal about these abusive practices.
A second outcome, which is also unlikely, would be increased lending and 0% refinancing options. However, this too seems unlikely, as banks continue to limit access to 0% introductory rates and increase balance transfer fees.
In all likelihood, the only outcome of this meeting will be some newspaper headlines that make the administration appear to be cracking down on credit card abuses. Unfortunately, headlines aren’t going to pay the extra 15% many consumers are paying on their credit card debt. And, in all likelihood, unless the government provides credit card companies with the money they need to make loans, it is equally unlikely that consumers will benefit from any increase in credit availability.
So, on April 24th, you may read a headline such as, “Obama Administration Pushes Credit Card Lenders to End Abusive Practices,” and come home to find a letter from your credit card company informing you that your interest rate will be doubling next month. As we’ve learned over and over again during this crisis (and our lives for that matter), meetings don’t always produce results. And this meeting may be nothing more than a public relations move.
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