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23/08/2010 -
As new rules limiting penalty fees go into effect, consumers are watching their credit card rates hit a new high - and thinking twice before swiping at credit-debit machines.The average interest rate on existing cards has spiked to 14.7 percent - the highest level since 2001 - compared to 13.1 percent for the same period last year, according to research firm Synovate.
The firm reported even starker news for consumers when it compared the prime rate - by which card rates are set - to the current average interest rate. The research found the difference to be the largest in 22 years - 11.45 percentage points.
According to the Wall Street Journal, the rate increase can be attributed to a combination of factors. Because of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, card issuers have been limited in raising rates while at the same time being forced to handle record highs in credit-card delinquencies.
Banks are justifying the increased rates by blaming new federal regulations that will limit their ability to charge penalty fees and adjust rates without warning, National Public Radio reports.
