It's hard to find a group more publicly reviled than credit-card companies. On Apr. 23, President Barack Obama plans to convene executives at the White House to challenge high card rates and predatory practices, while Congress readies legislation that would crack down on the industry.
But most of the crackdown that Congress is contemplating is already in rule changes approved by the Federal Reserve late last year that become effective in July 2010. And the soaring rates are the banking industry's way of bracing for that more restrictive environment.
Credit-card defaults may be the next hammer to fall on many debt-strapped consumers. Card holders are watching the interest rates skyrocket and seeing their credit lines vanish overnight. Card companies argue that they are simply repricing their accounts for rising risks. Not only do they have to get changes in before the Fed rules take effect, they have to contend with worrying default rates and delinquencies that could cut into profits.