''Pew: Law vanquished many credit-card ills, not all''

There's good news for credit-card users, according to a report today from the Pew Charitable Trusts: As promised, many of the credit-card industry's best-known tricks and traps for consumers were vanquished by last year's credit-card law.

The report looked at card data collected in March, and found that three of the law's prime targets were gone:

• "Hair trigger" shifts to penalty interest rates on existing balances, based on minor account violations such as being a day late on a payment.
• Unfair payment-allocation schemes that trapped people who accepted "0 percent" interest rates on balance transfers into paying unexpected interest if they also used their new cards for purchases.
• Meaningless credit limits, in which banks allowed people to spend beyond their limits but then imposed unexpected "over-limit fees" on them.

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By the way, if you weren't paying close attention, you might wonder about the role of the Pew Charitable Trusts in the credit-card arena.

Pew played a large - and largely unheralded - role in the reforms enacted last year. The Philadelphia foundation's Safe Credit Cards Project started out by trying to foster voluntary reform by the mega-banks that had come to dominate the industry. When its voluntary push seemed to stall, it became one of the most important advocates for a new law, in part because of its reputation for pushing for policies based on solid data and research.

Pew recognized the truth of what less-well-funded consumer advocates, and their academic allies such as Harvard bankruptcy expert Elizabeth Warren, had been arguing for years: that the tacit deregulation of consumer credit, spurred by a 1978 Supreme Court decision and that decade's high inflation, had given birth to a credit-card business built on tricks and traps.

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