New rules would fix 'fixed' credit card rates

Credit card reform: The fine print of proposed changes to Regulation Z

By Connie Prater

A proposed change to Regulation Z will end the current practice of allowing card issuers to advertise "fixed" rates that can change whenever the issuers feel like it. Currently, issuers can offer a "fixed" rate credit card -- and change the rate 15 days later or "at any time for any reason." Under the proposal, the term "fixed" will have meaning: If no time period is specified, the rate will remain fixed as long as the account is open and payments are kept current.

45 days' notice Fixed rates APR disclosures Fee disclosures Account opening disclosures Periodic statement disclosures Changes in credit card terms Minimum payments Subprime credit cards

"Clarification of the term 'fixed' interest rate is long past due ... " says Corky Neale, Memphis Debt Collaborative/RISE Foundation Read more (Page 1)

Richard Painter, a credit cardholder from Troutville, Va., calls his disappearing "fixed rate" an example of "bait and switch." He writes: "Our attempts to pay off our credit cards have been made almost impossible by Capital One and other credit companies policies of increasing our 'fixed rate' every time our total balance drops ... " Read more

Jodi Anderson Thompson, an assistant staff counsel for the Florida Bar, writes about the disappearing "fixed" rate: "I have always felt that this was fraudulent conduct on the part of the company." Read more

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Published: December 26, 2007 Comments or questions, Story archive

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