By Rita R. Robison, Consumer Specialist, Blogging at The Survive and Thrive Boomer Guide

As you’ve probably noticed, if you a credit card holder, credit card companies are jacking up interest rates, penalties, and fees before a new law of reforms becomes effective in February 2010.

A new study, “Still Waiting: ‘Unfair or Deceptive’ Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect,” shows credit card issuers are gouging consumers.

The Pew Health Group examined credit cards offered by the 12 largest banks and found the following:

• 99.7 percent of bank cards allowed the issuer to raise interest rates on outstanding balances by changing the account agreement unilaterally – up from 93 percent in December 2008.

• 95 percent of bank cards allowed issuers to apply payments in a manner that the Federal Reserve found likely to cause substantial monetary injury to consumers.

• 90 percent of bank cards had penalty interest rates that could be triggered by late payments or overlimit transactions. All but 10 percent of these cards had penalty repricing terms that would qualify as “hair trigger” under Federal Reserve guidelines – triggers of one or two late payments in 12 months.

• 99 percent of bank cards included a late fee – median $39.

• 80 percent of bank cards included an overlimit fee – median $39.

• The median bank penalty interest rate was 28.99 percent. Most – 90 percent – penalty rate increases could continue indefinitely even if the cardholder resumes on-time payments.

As of July, interest rates spiked an average of 20 percent across the board from December of 2008 with some issuers jacking up rates 30 percent and in at least one case 50 percent – even on their best customers.

The Pew study also found that the 12 largest credit unions offered significantly lower advertised rates compared to bank credit cards, with penalty fees that were half the cost of comparable bank fees, and fewer dangers associated with “unfair or deceptive” practices.

An article in The Wall Street Journal, “Credit-Card Countdown: Higher Rates Abound,” describes further credit card rate and fee increases that have occurred since the Pew study was published.

If you want to take action against the way banks are operating, Public Citizen, a consumer advocacy group, is organizing a protest at Goldman Sachs in Washington, D.C., Monday, Nov. 16 at noon.

If you can’t make the gathering, see the Public Citizen Web site to find out about other ways you can take action on banking reform.

For baby boomer consumers facing problems on what to do about rising credit card debt, consider consumer credit counseling. For information on how to select an organization to help you see the article “Consumer Credit Counseling Offers Help to Baby Boomers Facing Financial, Mortgage Woes.”

Be sure to be an informed boomer consumer before you choose someone to help you. Scam artists abound in this recession and are bilking financially strapped consumers out of what money they have and putting them into an even more precarious financial situation.

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