Just when you think you’ve seen it all, out comes BBVA Compass with a new reform-friendly credit card that increases transparency and stabilizes interest rates, just as the new Credit Card Reform Act kicks in.
Nobody here at BankingMyWay owns a crystal ball, but something tells us that a credit card built for the post-reform era could be a winner.
Why is that? For starters, BBVA looks like it has the reform-friendly field all to itself. A recent Pew Research study says that, starting back in July 2009 (after Congress voted credit card reform into law), more than 400 credit cards that were evaluated by the firm made “little or no progress” in meeting new reform standards. Pew reports that each of the 400 cards reviewed had at least one “unfair and deceptive” element.
Symptomatic of the abuse credit card issuers are inflicting on customers are rampant interest rate increases — even for cardholders who pay their bills on time. The Pew survey showed that, out of 400 cards under review, 399 of them had legal language inserted in the fine print that allowed card issuers to hike interest rates without any reason — or any warning to cardholders. When rates double from 15% to 30%, it’s no surprise, as Pew reports, that 90% of the cards studied had high default rates.
But BBVA aims to curb such abuses with its reform-friendly ClearPoints Credit Card. The card is marketed as a “direct response” to consumer demands following the new CARD Act passed by Congress in the spring of 2009. That law, slated to take full effect in February, seeks to enhance transparency by credit card issuers by limiting the size and frequency of credit card interest rate hikes.
The BBVA Card aims to heighten transparency and stabilize card interest rates, using the terms of the new CARD Act as a blueprint.