This story in the Contra Costa Times impresses me because it gets the story right:New Credit Card Rules Putting the Squeeze on Residents
There's almost too much to quote here, but these are key concepts:
Implementation of the Credit Card Accountability Responsibility and Disclosure Act in February of 2009 provided more consumer protections against predatory lending practices. But coupled with a flailing economy, it also produced some unintended consequences: Credit became more expensive, and its availability decreased across the board.
Unintended consequences, perhaps, but not unexpected. Any rational economist could have predicted the eventual outcome of the Credit CARD act. And notice that credit gets more expensive and less available across the board. It's just like I said: the creditors get to shed the riskiest parts of their portfolio while increasing fees & interest of their more reliable customers. This is a win for them, and if not for the wider financial crisis, they'd be making more money after these rule changes.
According to the American Bankers Association, the new legislation restricts the ability of credit card companies to price based on the individual risk of the customer, so consumers are seeing higher annual fees, lower credit limits and fewer promotional offers such as low introductory rates or airline miles. The October 2009 survey of 60 large domestic banks and 24 foreign banks by the Federal Advertisement Reserve indicated that banks expected to tighten many of the terms of credit card loans - for both prime and nonprime borrowers - as a direct result of the the Credit CARD legislation. For prime borrowers, about half of the banks surveyed expected to increase interest rate spreads, raise annual fees, reduce credit limits and "reduce the extent to which loans will be granted to customers who do not meet credit-scoring thresholds."
This article doesn't let the creditors off the hook, but it also properly fingers the Credit CARD Act and its "unintended consequences" as the reason for many hardships. It's rare that mainstream media coverage does this well at capturing the real causes of consumer distress.