None of the credit cards offered online by the 12 largest U.S. banks would meet requirements of new federal curbs on the industry's rates and fees, according to a report from the Pew Charitable Trusts.
All of the cards surveyed used practices considered "unfair or deceptive" by the Federal Reserve banks, according to the report, which the Philadelphia nonprofit group released Wednesday. The study examined almost 400 cards advertised by banks and credit unions and compared terms for cards offered in July 2009 and December 2008.
The Credit Card Accountability Responsibility and Disclosure Act is taking effect in stages, and requires significant change in issuers policies.
"Our research shows the most harmful practices the card act targets remain widespread," said Nick Bourke, the manager of Pew's Safe Credit Cards Project.
The number of cards that allowed issuers to change interest rates at any time increased to 99.7% from 93%, the report said. The lowest advertised interest rates rose by more than 20%, while the highest rates rose 13%.
Discover Financial Services had the largest increase in percentage points for its lowest advertised rates, to 12.99% from 9.9%. Bank of America Corp., the second-biggest card lender after JPMorgan Chase & Co., showed the biggest jump in highest advertised rates, to 18.24% from 14.99%, the report said.
For 90% of the cards surveyed there are penalties for over-the-limit transactions or late payments, including so-called hair triggers of one or two late payments a year.
"Issuers are now required by law to give customers 45-day advance notice of any increase in their APR, or other significant terms, and must also give customers the option to decline the increase and pay off the balance over time. The days of so-called hair-trigger repricing ended then," Peter Garuccio, a spokesman for the American Bankers Association, said by e-mail.