Businessweek.com: American Express Profit Surges as Spending Rebounds
American Express Co., the biggest U.S. credit-card issuer by purchases, said fourth-quarter profit more than doubled amid a surge in customer spending and lower expenses for future defaults.
Not coincidentally, the interest rate on my American Express Delta Skymiles card jumped in December from 11.25% to 14.5% a nearly 29% increase. This is for new purchases and existing balances. Congress is fighting against this type of increase on balances, but the credit cards are making changes before the law takes place.
From the WashingtonPost.com: Credit Card Issuers Raising Rates Ahead of New Law
The law, among other things, would prevent card companies from raising rates on existing balances unless the borrower was at least 60 days late and would require the original rate to be restored if payments are received on time for six months. The law would also require banks to get customers’ permission before allowing them to go over their limits, for which they would have to pay a fee.
I think any legislation should include a roll back of interest rates to a point before these rate increases have been implemented. Otherwise the intent of the legislation would be lost. It’s like closing the barn doors once the cows have gone.