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Federal law may not have been enough to curb the seemingly ceaseless tide of credit card lenders’ greed and malice. The Credit Accountability, Responsibility, and Disclosure (CARD) Act took full effect last week, but a disturbing new study found recently that card interest rates are actually higher than they have ever been before. According to industry watchdog site Bankrate.com, the average American credit card rate today is over fourteen percent. Compare that to an average of twelve percent prior to the Great Recession, and you will see a definite rise. Compare it to the average finance charge for a fixed-rate home loan (four and a half percent), or the Federal Funds rate (point two-five percent), and you will see a serious indicator of avarice and retaliation against lawmakers and consumers.

The National Consumers League, based in Colorado, fumed last week that the increase in credit card interest rates amounted to nothing so much as “just plain usury,” and expressed the wish that card interest rates would have a maximum cap. Sally Greenberg, the League’s executive director, pointed out that these higher rates do nothing but torpedo the best efforts of those who want to pay their bills but are struggling with higher minimum payments and swelling balances.

Credit card companies peevishly defend the interest rate increases over time, claiming that these changes are a necessary evil given how much money they have lost to delinquencies and defaults in recent years. Credit standards are tightening to previously-unforeseen levels all across the industry, they point out, and the risks of extending credit have never been so high. Loftier rates are a logical conclusion, they claim.

The CARD Act, signed into law with much fanfare by President Obama over Memorial Day weekend 2009, was intended to protect consumers from lenders’ whims by arming them with an expansive slate of new protections. The Act banned the charging of certain, controversial fees, disallowed lenders from raising interest rates due to a single delinquency or overage, and required a longer notice period before changes to an existing credit card contract could be enacted. The Act also contained several new requirements as to the transparency of consumer disclosures. As written and pushed forward by Democratic Representative Carolyn Maloney of New York, the so-called “Credit Cardholders’ Bill of Rights” contained nothing but the Legislature’s best intentions. Maloney stated her hope that the Act would lead to lower interest rates, greater competition, less opacity in lending, and a more consumer-friendly environment overall. Unfortunately, some provisions of the Act were put into effect far too late for card companies to not figure out every possible way to exploit loopholes in the new law.

Also foiling the Act’s potential benefits is the ongoing fact that consumer spending remains in the gutter, despite the government’s ample encouragement. Americans have reacted to the card industry’s deceit and greed by scaling back their use of plastic drastically. Of course, this also cuts into lenders’ profits, which also motivates them to raise rates even higher. Both consumers and industry outsiders are fuming over banks’ complete defiance of the spirit of the CARD Act, as they struggle to compensate themselves for lower fee revenue. Retailers are also angry at card lenders on the topic of controversial interchange fees – the charge that retailers must pay in exchange for the privilege of accepting plastic at their registers.

Rep. Maloney actually argued against the same eighteen percent interest rate cap that Sally Greenberg advocates. Maloney claims that interest rate caps tend not to be effective, and that “the markets, when allowed to function, are a better mechanism for regulating rates than arbitrary caps.” Greenberg, however, would give the states individual authority to impose interest rate caps as they saw fit.

The American Bankers Association, trade group for credit card lenders the nation over, maintains that rates are high due to the condition of the marker. An Association spokesman, Peter Garuccio, claims that skyrocketing card delinquencies (a rate double that of 2008’s) have forced banks’ upper hands on insisting upon higher rates. In Garuccio’s words, “these are unsecured debts with no asset to protect the company from those who borrow and don’t pay.” Card chargeoffs – those accounts written off completely by companies when then feel that there is no hope of them ever being repaid – hit over ten and a half percent last month, up over four percent from July 2008. Garuccio also pointed out that the CARD Act limited card companies’ ability to gain revenue from fees, essentially meaning that they had to come up with new ways of replacing that money.

It also doesn’t help, as I pointed out previously, that America’s credit cardholders are having their own little plastic revolution, no government intervention required. Across the country, consumers are relying less and less on their plastic. The average revolving balance on a credit card in the United States just hit an eight year low, bottoming out at forty-nine hundred dollars. That’s down from fifty-seven hundred dollars just a year ago. Consumers are being bombarded with messages from consumer groups warning them that they are being charged too much, and in these days of overall frugal spending, they are choosing to pay down their balances and to use cash or debit cards for their purchases.

Meanwhile, the National Retail Federation is railing against credit card issuers from the other side of the fence on the ever-heated issue of interchange fees. Card issuers like those represented by the ABA claim that interchange fees pay for retailers to experience the protection, service, and convenience of credit card transactions at their places of business. Garuccio, the Association’s spokesman, dismissively commented that “obviously [retailers] want somebody else to pay for these services,” implying strongly that retailers would place the burden on customers if they had their druthers. But this is not at all what retailers claim that they want: J. Craig Shearman, a spokesman for the National Retail Federation, claims that retailers want lower interchange fees so that they can pass the savings onto their loyal customers.