June 21st, 2011 
Ryan Parker 
Consumers are starting to reap benefits two years after the CARD Act took effect, according to the Pew Health Group’s Safe Credit Cards Project, a review of credit card offers by the nation’s 12 largest banks and largest credit card issuers. These institutions represent 90% of all outstanding credit card debt in the United States. The purpose of the latest report was to see how the credit card industry has changed since the passage of the Act and used data collected from March 2010 through January 2011.
According to Nick Bourke, Director of the project, “Pew’s research shows that predictions that the legislation would spark new charges and long-term interest rate growth have not materialized.” Interest has stabilized at reasonable rates of between 12.99% – 20.99%, unchanged from 2010. Overdraft fees have been restructured or eliminated with only 11% of banks charging them and are no longer an automatic penalty; cash advance and other penalties have held firm. Fewer annual fees were initiated than expected. And while late fees continue to be widespread, their costs have dropped.
The one area that was decidedly impacted was an increase in annual fees banks charge, rising from 14% in 2010 to 21% in 2011, while credit unions remained steady. Promotions that include the first year annual-free are included in 40% of credit card offers. The amount charged continues to remain at an average of $59 for banks and $25 for credit unions.
The bottom line for consumers is a more transparent relationship with banks and credit card issues, in addition to a more competitive, level playing field.
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Tags: Card Act, Two Years, Years