The latest buzzword in banking circles may have analysts applauding, but it leaves customers worried about the value of their credit cards. Banks can use "credit card repricing" to prepare for new regulations in early 2010. Because those new laws restrict lenders' abilities to adjust interest rates and service fees, many card issuers started hiking prices this spring.
Industry experts note that repricing has become necessary to offset losses caused by charged-off accounts and increased credit card delinquencies. CardRatings.com founder Curtis Arnold told USA Today that, given the state of the industry, he can't "totally fault the issuers for making adjustments while they can, as long as it's not highway robbery."
Some credit card issuers have even used new regulations on promotional rates to buy themselves extra time for further account changes. By re-framing current accounts as "promotional offers" with expiration dates in 2011, issuers can enjoy one more repricing opportunity even after new laws have taken effect.
Consumers can expect more credit card rate and fee increases in the months to come leading up to the implementation of the law in February. Consumer advocates suggest checking any notices from credit card issuers as well as monthly statements closely for any changes to card terms and conditions.