This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

American Express, Capital One Lift Card Rates

BOSTON ( TheStreet) -- American Express (AXP - Get Report), Capital One Financial (COF - Get Report) and Citigroup (C - Get Report) raised the interest rates of some popular credit cards before the Credit Card Accountability, Responsibility and Disclosure (CARD) Act took effect on Feb. 22.

The CARD Act forbids issuers from raising interest rates less than a year after an account is opened and forces them to apply payments to balances with the highest rates first. Issuers must also give 45 day's notice before changing rates.

These regulations are meant to help cardholders, but they will likely cut into issuers' revenue, prompting some to pre-emptively boost rates. While the prime rate has remained at a low of 3.25% since December 2008, the average annual percentage rate (APR) for credit cards increased almost two percentage points since May 22, when the law was signed.

According to the LowCards Complete Credit Card Index, which tracks the APRs of more than 1,000 credit cards, the average advertised APR on Feb. 22 was 13.54%, up from 11.64% on May 22. The rates on some of the nation's most popular cards have increased even more significantly since October 2008:
  • The APR for American Express' Blue card starts at 15.24%, an increase from 8.99%.
  • The rate for Citigroup's Platinum Select card starts at 11.99%, up from 7.99%.
  • The APR for the Capital One Platinum Prestige card starts at 11.9%, compared with 7.15%.
  • Some cardholders perceived as higher risk by their issuers have received rates as high as 29.99%.

    While the CARD Act provides needed restrictions against "any time, any reason" rate increases, it doesn't provide "every time, every reason" protection. Issuers can still raise rates on future purchases if they provide 45 days' notice. Cardholders can also expect rate increases in the near future as the Federal Reserve eases its foot off the interest rate brake.

    -- Reported by Bill Hardekopf of LowCards.com.
    Bill Hardekopf is the chief executive officer of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."

    Check Out Our Best Services for Investors

    Action Alerts PLUS

    Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    Quant Ratings

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    Stocks Under $10

    David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    14-Days Free
    Only $9.95
    14-Days Free
    Dividend Stock Advisor

    David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Updates with exact steps to take - BUY, HOLD, SELL
    Trifecta Stocks

    Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

    Product Features:
    • Model Portfolio
    • Intra Day Trade alerts
    • Access to Quant Ratings
    Options Profits

    Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • Actionable options commentary and news
    • Real-time trading community
    SYM TRADE IT LAST %CHG
    AXP $76.65 0.00%
    C $53.28 0.00%
    COF $77.32 0.00%
    AAPL $113.29 0.00%
    FB $91.01 0.00%

    Markets

    Chart of I:DJI
    DOW 16,643.01 -11.76 -0.07%
    S&P 500 1,988.87 +1.21 0.06%
    NASDAQ 4,828.3250 +15.6170 0.32%

    Free Reports

    Top Rated Stocks Top Rated Funds Top Rated ETFs