Two-Year Anniversary of the CARD Act: Finds Legislative Changes May Have Cost Credit Card Borrowers $33 Billion

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According to, key credit card legislation may have cost cardholders more than $33 billion in interest charges over the past two years. The 2009 CARD Act placed restrictions on how credit card companies could raise interest rates and impose late fees, among other changes. Though the CARD Act was meant to make credit card borrowing more consumer-friendly, this analysis indicates that any gains may have been offset by a general rise in credit card rates and certain fees.

The CARD Act may have had the unintended consequence of raising interest rates and fees on cardholders. Two years into the CARD Act, we might question whether the average borrower has actually come out a winner.

On the eve of the two-year anniversary of the 2009 Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, an analysis by - a consumer credit card comparison website - indicates that this legislation may have cost U.S. cardholders more than $33 billion since the implementation of its major provisions on February 22, 2010.

Between the end of 2008, before the CARD Act was widely anticipated, and late 2011, the average rates in credit card offers rose by 2.1 percentage points. Though rate averages were for credit card offers in those time periods rather than existing accounts, over time this rise was assumed to be reflective of trends in actual average interest rates paid. Applied against a combined $800 billion in U.S. credit card debt – a figure that has stayed fairly constant in the past two years – the effect of that 2.1 percentage point rise is an additional annual interest cost of approximately $16.8 billion annually, or more than $33 billion over two years.

“The CARD Act may have had the unintended consequence of raising interest rates and fees on cardholders, as credit card companies found ways to replace lost profit in areas limited by legislation,” said Richard Barrington, a financial expert who conducted the analysis for “Two years into the CARD Act, we might question whether the average borrower has actually come out a winner.”

Barrington also noted that the rise in average rates has not been evenly distributed. Interest rates on credit cards for poor credit customers – those who pay credit card rates in the highest tier – rose 3.4 percentage points in this timeframe, outpacing the 1.6 percentage-point rise for credit cards for excellent credit customers.

In addition to finance charges, average balance transfer fees have also risen in the past few years, indicating other ways in which cardholders may be paying more for certain transactions on their credit cards.

Details of the analysis can be found in Barrington’s article, “How the CARD Act has cost consumers.”

About is the leading comprehensive free source for comparing credit card offers and has been educating consumers on credit cards since 1998. The site regularly reports on consumer credit and debt issues and publishes editor and consumer reviews of balance transfer cards, student credit cards, gas credit cards and more. These resources allow consumers to compare and identify the credit cards best suited to their needs, get the best rates available and effectively lower their debt. The site was recently ranked the No. 1 credit card comparison site in Bing Editor's Picks. is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in visitor-friendly marketing practices. For more information, please visit

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