the responsible people get screwed again

[Pope Flick]

Waaaaa! All those deadbeats are stealing my money. A credit card lobbyist told me so.

 

 

 

No one bothers to figure out/infer that their sweetheart deals are the result of no regulations and predatory lending practices that enable cc companies to give away money.

 

You'd think getting irresponsible people out of the system would be a welcome thing, because in the long run it will improve everything.

[Kid Cid]

People need to be responsible, yes. But I tend to believe average America isn't too bright thanks to our glorious school systems and wonderful TV. And I tend to believe the government knows this and has to pass laws to make people wear their seat belts.

 

No, they do not have to pass these paws. These paws are only present to help make the insurance companies and state and local budgets money. Saving people from themselves is an impossibility. Start spending time on not spending more money than you have and you won't have to make silly laws like this.

 

BTW, I've always worn a seatbelt regardless of the law.

[dmarc117]

i would be all for repealing the seat belt law IF.........

 

your insurance or society will not be held responsible for your injuries due to not wearing a seatbelt.

[Kid Cid]

i would be all for repealing the seat belt law IF.........

 

your insurance or society will not be held responsible for your injuries due to not wearing a seatbelt.

 

Which is also stupid. No you, the resulting blame game. If the person is too stupid to wear a seat belt, they are responsible because it is an overt act on their part. Seems pretty simple to me, but then again I live in a world where personal responsibility still exists.

[Pope Flick]

i would be all for repealing the seat belt law IF.........

 

your insurance or society will not be held responsible for your injuries due to not wearing a seatbelt.

 

 

As has been pointed out before - wearing your seatbelt does more than protect you it also protects others in an accident by keeping you in front of the wheel and better able to regain control of your car. It isn't like a motorcycle helmet which is really irrelevant to others' safety once the bike get laid down.

[Pope Flick]

Consumers scored a major victory on Tuesday as the Senate voted overwhelmingly in favor of a bill that restricts unfair credit card practices. The Credit Card Accountability, Responsibility and Disclosure Act passed by a 90-5 margin. The bill comes on the heels of similar legislation, known as the Credit Cardholders Bill of Rights, that was approved by the House on April 30 in 357 to 70 vote.

 

So what happens now? The Senate bill heads back to the House for a vote, and there’s a good chance it could hit the President’s desk before Memorial Day. But what do both bills mean for your wallet? Let’s look at the key provisions:

 

Retroactive rate hikes: Both bills ban hikes to interest rates on existing balances. So say you carry a $1,000 balance at 8%. If the rate on your card changes, the new rate will apply only to new purchases going forward—the issuer won’t be able to start charging 19% on the previous balance. The only catch: If you fail to comply with a debt repayment workout plan or if you are more than 30 days (House bill) or 60 days (Senate bill) late on payments, all bets are off. What’s more, both bills prevent issuers from raising your interest rate during the first year of the card account.

 

Penalty periods: If you are late and your rate goes up, the Senate bill states that if you pay your bill on time for 6 months in a row, you can reclaim the lower rate.

 

Advance notification: Time was, your issuer could jack your card’s rate and only give you 15 days notice. No more. Both bills require that issuers must give you 45 days notice before making significant interest rate, fee and finance charge increases.

 

Teaser rates: Both bills require that promotional rates must be offered for at least six months.

 

Payment allocation: You may have a balance transfer on your card at one rate, while other purchases or balances accrue interest at a different, higher rate. Before this legislation, banks could apply your payment to the balance with the lowest interest rate first—so your more costly balance just kept racking up interest. Now, payments in excess of the minimum amount owed must first be applied to the balance with the highest interest rate first, and then to remaining balances in descending order.

 

Due dates: Credit card statements must be mailed 21 days before the bill is due, up from the current 14. And no more odd timing deadlines for payments—payments received by 5 p.m. on the due date are on time. Payments with due dates that fall on holidays or weekends must be accepted by the next business day.

 

Over-the-limit fees: Before, if you tried to charge above your credit limit, the issuer would approve the transaction and slap you with an “over-the-limit” fee. Now, consumers must opt in for over-the-limit approval—and the fees that come with it.

 

Cards for young adults: The House bill stipulates that banks can’t issue cards to un-emancipated minors under the age of 18 unless a parent is the account holder. It also limits college students to just one credit card, sets credit limits to a percentage of the student’s income and requires parents to approve increases to credit limits on joint accounts. The Senate bill takes it even further, eliminating credit cards for people under the age of 21 unless an adult co-signs or they can show proof of income.

 

Gift cards: The House bill doesn’t touch them, but the Senate bill states that gift cards can’t expire in less than five years. Retailers selling Visa, MasterCard, American Express or Discover-branded gift cards will have to print information on dormancy fees—charged when the card goes unused for a while—right on the cards themselves.

 

Universal default: Both bills eliminate this practice, which allows a card issuer to raise your rates if it learns that you were late on another card.

 

Account closings: The Senate bill doesn’t address it, but the House bill requires an issuer give you 30 days notice before it closes your account.

 

Many of the provisions in these bills are already addressed in the Fed’s credit card regulations, which are slated to take effect in July 2010. Will this legislation make it happen sooner? The House bill was scheduled to take effect 12 months after passage, while the Senate bill planned for nine. We’ll keep you updated on what the final law looks like–and when you might start benefiting from it.

[Azazello1313]

I would like someone opposed to the changes to list them out and tell me what issues you have with them.

 

well...

 

Banks used to give credit cards only to the best consumers and charge them a flat interest rate of about 20 percent and an annual fee. But with the relaxing of usury laws in some states, and the ready availability of credit scores in the late 1980s, banks began offering cards with a variety of different interest rates and fees, tying the pricing to the credit risk of the cardholder.

 

That helped push interest rates down for many consumers, but they soared for riskier cardholders, who became a significant source of revenue for the industry. The recent economic downturn challenged that formula, and banks started dumping the riskiest customers and lowering their credit limits in earnest as the recession accelerated. Now, consumers who pay their bills off every month are issuing a rising chorus of complaints about shortened grace periods, new hidden fees and higher interest rates.

 

The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.

 

if they think I am a low risk to default, based on my credit score and the like, then they could give me a good deal. relatively low margin to them, but low risk, so it's well worth their while and everyone's happy.

 

now the government comes in and says you can't take high margins on customers who present a high risk. well you gotta make that up somewhere.

[Azazello1313]

Credit card companies make it hard, on purpose, to understand how the terms and conditions work. Then they market them to college kids and other stoopids with the express hope that people will build-up balances they cannot hope to pay off so they can tag them with penalties and interest. Virtually every credit card company advertisement then tries to convince you to spend money you don't have. Frankly, a lot of the tactics border on predatory lending and deceptive advertising.

 

Bottom line: "bait and switch" tactics are unacceptable in any normal business, and credit card companies should be no exception.

 

"college kids and other stoopids" = good little obama voters. getting paid off once again at the expense of those of us who pay our bills.

[Perchoutofwater]

"college kids and other stoopids" = good little obama voters. getting paid off once again at the expense of those of us who pay our bills.

 

Yep. One more reason I think if you didn't pay at least one dollar more in taxes than you received in federal aid, you shouldn't be allowed to vote. As it is you have people voting themselves money.

[Pope Flick]

well...

 

 

 

if they think I am a low risk to default, based on my credit score and the like, then they could give me a good deal. relatively low margin to them, but low risk, so it's well worth their while and everyone's happy.

 

now the government comes in and says you can't take high margins on customers who present a high risk. well you gotta make that up somewhere.

 

 

In other words, you now realize you have been part of the process that takes advantage of the slows who get mired in debt due to predatory lending practices.

 

The party is over, and we'll all be better off for it. I'm willing to bet that less debt carried in the private sector will creates dividends for us down the road.

[darin3]

Problem is that I travel enough to need a credit card. Remember, you can't rent a car without one. fraking bastards.

That's not true. You can use a debit card w/ Visa logo. You just have to show your itinerary to the agent, and they charge your debit card for the estimated total right there and then. At least, this is true for National.

[westvirginia]

In other words, you now realize you have been part of the process that takes advantage of the slows who get mired in debt due to predatory lending practices.

 

The party is over, and we'll all be better off for it. I'm willing to bet that less debt carried in the private sector will creates dividends for us down the road.

 

Please define "predatory lending practices". They get mired in debt because they are a slow, and because they are a greater risk, the lending institution demands a greater return. JUST LIKE YOU DO WITH AN INVESTMENT!!!!!

[Azazello1313]

In other words, you now realize you have been part of the process that takes advantage of the slows who get mired in debt due to predatory lending practices.

 

The party is over, and we'll all be better off for it. I'm willing to bet that less debt carried in the private sector will creates dividends for us down the road.

 

bullmanure. let me say it slower this time so maybe you'll understand. if I and others like me present a low risk of default, then the banks can make good money giving me credit at a low margin. that takes advantage of no one. under the old, evil "predatory" system, customers could be treated as individuals. low risk customers got good deals, high risk customers got bad deals because they couldn't be counted on to pay back. obviously, each individual had complete power to determine whether the arrangement being offered suited their needs or not.

 

now what is being implemented are rules saying that it is not fair for people who present a high credit risk to be asked to pay for that risk. someone else has to pay for it. net result, the banks are being forced to treat everyone the same, regardless of the risk they present. a collectivist system, if you will. in other words, those of us who pose a low risk get to subsidize the risk of lending to people with poorer credit.

[CaP'N GRuNGe]

About the only thing I disagree with from what Pope posted is the limits to credit access of college students.

[CaP'N GRuNGe]

bullmanure. let me say it slower this time so maybe you'll understand. if I and others like me present a low risk of default, then the banks can make good money giving me credit at a low margin. that takes advantage of no one. under the old, evil "predatory" system, customers could be treated as individuals. low risk customers got good deals, high risk customers got bad deals because they couldn't be counted on to pay back. obviously, each individual had complete power to determine whether the arrangement being offered suited their needs or not.

 

now what is being implemented are rules saying that it is not fair for people who present a high credit risk to be asked to pay for that risk. someone else has to pay for it. net result, the banks are being forced to treat everyone the same, regardless of the risk they present. a collectivist system, if you will. in other words, those of us who pose a low risk get to subsidize the risk of lending to people with poorer credit.

 

I haven't read all the details here. So you're saying CC issuers now must accept all applications regardless of your credit score and give each and every applicant the same credit rate terms?

[Pope Flick]

bullmanure. let me say it slower this time so maybe you'll understand. if I and others like me present a low risk of default, then the banks can make good money giving me credit at a low margin. that takes advantage of no one. under the old, evil "predatory" system, customers could be treated as individuals. low risk customers got good deals, high risk customers got bad deals because they couldn't be counted on to pay back. obviously, each individual had complete power to determine whether the arrangement being offered suited their needs or not.

 

now what is being implemented are rules saying that it is not fair for people who present a high credit risk to be asked to pay for that risk. someone else has to pay for it. net result, the banks are being forced to treat everyone the same, regardless of the risk they present. a collectivist system, if you will. in other words, those of us who pose a low risk get to subsidize the risk of lending to people with poorer credit.

 

 

And I'll call BS right back - those who present too high a risk will no longer receive credit. So CC companies cannot grow at 15% annually anymore? Boo f'ing who. They're screaming bloody murder that everyone's rates will go up. Well 24 hours in, I don't believe that. And you'll find one year from now that what I'm saying is closer to the truth than what they're saying.

 

LMAO at the 'payback' angle you guys keep throwing around. Gee, what kind of de-regulatory payback has Wall Street gotten all these years from both parties in Washington? Well, that party is over.

 

This thing passed 90-5. Quit crying and write your senator who voted for it.

[wildcat2334]

Nail meets head.

 

And for some reason, our right wingers would rather it continue so even more people fall into the black hole of credit card debt.

 

You guys are worried about a $30 annual fee? How about the cost of the massive write-downs that will inevitably need to be incurred when more and more people fall deeper and deeper into debt, with no hope of paying it off?

 

Traditional banks have re-rang the bell on lending practices, which will hopefully change the way mortgages are approved forever...credit card companies, you are next.

 

 

werd - this is a good thing all-around and a long-needed correction to an industry using bait and switch and bullchit greedy/shady business practices for too long.

 

In the change-over from WAMU to Chase I had to re-register my cc acct in Chase.com and they had a technical issue that wouldn't allow me to do log in, so when I called them to pay over the phone, they wanted to charge $15 to do so - get the eff outta here with this nonsense - and get these a holes straightened out.

 

I wouldn't do business with anyone who is pulling the chit they do - and anyone who in the huddle who says they would is an effin liar.

[WaterMan]

"college kids and other stoopids" = good little obama voters. getting paid off once again at the expense of those of us who pay our bills.

 

Hey both sides pay out the cash.

[WaterMan]

This thing passed 90-5. Quit crying and write your senator who voted for it.

 

That was almost unanonymous. America must have spoken.

[Azazello1313]

And I'll call BS right back - those who present too high a risk will no longer receive credit. So CC companies cannot grow at 15% annually anymore? Boo f'ing who. They're screaming bloody murder that everyone's rates will go up. Well 24 hours in, I don't believe that. And you'll find one year from now that what I'm saying is closer to the truth than what they're saying.

 

that is possible. I'm sure much of this is CC industry bluster, but we will see what happens.

 

by the way, the BS part of your post was when you said that low-risk borrowers getting a good deal was somehow riding the backs of the high-risk maroons. that is absurd. the "sweet deal" the low risk borrower gets is based on a risk-reward calculation that still benefits the CC companies. they get 5% on everything you buy, in return for floating the interest from payment to payment and maybe giving you back some rewards worth about 1%. theoretically, if that deal made sense for them before this legislation, it will still make sense for them afterward. theoretically, the only people this hurts are those with poor credit who can no longer get anyone to lend to them. but, again, we'll see how it shakes out. the devil is often in the details.

[CaP'N GRuNGe]

I haven't read all the details here. So you're saying CC issuers now must accept all applications regardless of your credit score and give each and every applicant the same credit rate terms?

 

:crickets:

[Perchoutofwater]

That was almost unanonymous. America must have spoken.

 

Closing Gitmo was voted against 90-6 let's see if your president listens.

[CaP'N GRuNGe]

http://finance.yahoo.com/news/Why-Credit-C...s-15303066.html

 

The bankers make it sound like a certainty: New rules limiting high credit-card interest rates and other usurious practices are going to cut into bank revenues, so they'll have to make up the difference somewhere. That means fees have to rise for everybody else. It's just a truism, see, the way every action in Newtonian physics produces an equal and opposite reaction.

 

A front-page New York Times article recently described some new measures banks are considering to boost sagging revenue: Adding back annual fees, charging interest from the moment you make a purchase, curtailing reward programs, and hiking late charges and penalty fees. Credit card users who carry a balance are used to such strictures, but now the credit-card companies are hoping to force them on the 50 million Americans who pay off their balances every month.

 

I can't wait to watch them try.

 

[see the best and worst bailed-out banks.]

 

Consumers who run up big credit-card balances and take a long time to pay them off are at the mercy of their lenders, which leaves them virtually no leverage. Despite the new rules, banks will probably still find ways to dun customers who run up debt and limit their own options. But consumers who stay out of debt get to call the shots. And they're the ones who will decide whether to pay new credit card fees. Hmmm. I wonder what they'll choose.

 

Thirty or 50 years ago, captive consumers largely did what big corporations told them to do. The consumer economy was relatively new, and big companies offering glittering products and convenient services seemed benign. Many of them actually helped make people's lives better.

 

[see why the banks still aren't fixed.]

 

But that patriarchal setup ended with the advent of the Internet, which has generated intense competition for practically everything and allowed consumers to shop for the lowest price without leaving home. Credit card companies who think they can keep their customers while hiking fees might want to study the airline industry, which has failed for three decades to enact meaningful fare increases--or even make a profit. Every time one airline tries to raise fares, another carrier tries to grab market share by launching a sale. And new discount airlines pop up all the time, driving prices even lower. It's true that new fees for meals and checked bags have stuck, but consumers have reacted by bringing their own food and stuffing everything into a bulging carry-on.

 

Downloaded any music lately? The music industry fought a mighty battle to prevent you from doing that, because they figured they'd make more money by resisting technology and forcing you into the store to buy the whole CD. Apple had a different idea, which actually benefitted consumers. We all know who won.

 

[see 5 signs the bailouts are getting better.]

 

My industry, the mainstream media, is gagging as it learns many of the same lessons. We've been offering most of our content for free on the Internet for the last 10 years, and it turns out that you can't run a business very effectively if you give away your primary product. Newspapers have gone out of business trying to get online readers to pay for their news. It hasn't worked because once people get used to free stuff, it's nearly impossible to convince them they should start paying for it. Especially if similar stuff is free someplace else, and you don't even have to leave your chair to find it. To survive as a media provider, you have to devise innovative new products and services that add value and give readers something they can't find everyplace else.

 

But credit cards are special, I guess. So the credit card companies think that smart consumers who haven't paid an annual fee in 10 years are going to say, 'sure, no problem, how much would you like me to cough up?' And shoppers who are fanatical about finding the lowest price aren't going to mind paying interest for a month, until they pay off their monthly bill. And there aren't any other banks or credit unions-or WalMarts, for that matter-who would be happy to jump into this business and offer consumers a better deal. And nobody will come up with the idea of paying with a debit card-or cash!-to avoid needless credit card fees.

 

[see 6 surprises from the bank stress tests.]

 

Here's another new idea: Maybe banks are going to make less money on credit cards. And maybe their fortunes will improve when they get with the times and offer consumers something fresh and useful.

[Ursa Majoris]

Adding back annual fees, charging interest from the moment you make a purchase, curtailing reward programs, and hiking late charges and penalty fees. Credit card users who carry a balance are used to such strictures, but now the credit-card companies are hoping to force them on the 50 million Americans who pay off their balances every month.

Any one of those 4 measures will see me (and probably a majority of the 50m people who also carry no CC debt) revert to cash (checking account Visa). Since I pay off my CC in full each month, it follows I can afford to pay cash. If ever there was a recipe to destroy an industry, this tantrum by the CC companies is it.

 

Note to CC companies: I don't need your product - but you need me.

[The Irish Doggy]

This is the most chicken little tripe I've seen in a while. The CC lobbyists have hooked some big fish in our Huddle pond.