Congress has recently passed a comprehensive credit card reform bill. The President is expected to sign it soon.
So are the changes good, bad, indifferent?
So are the changes good, bad, indifferent?
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New credit card bill
- Thread starter Salty
- Start date
More wealth redistribution and more micro management by "the One".
Those who pay off their cards each month will now pay to assist those who live beyond their means to continue to do so.
We pay our balance in full each month and use our card for convience.
When it begins to cost us money to use our card we will put it away and no longer use it.
Those who pay off their cards each month will now pay to assist those who live beyond their means to continue to do so.
We pay our balance in full each month and use our card for convience.
When it begins to cost us money to use our card we will put it away and no longer use it.
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Actually, those who pay off your bills each month are being subsidized by those who carry a balance.
So for once Rush Limbaugh is wrong.
Don't know about your Rush Limbaugh reference...
Credit card companies charge a fee to retailers for every transaction. The credit card company makes money on 100% of accounts that are paid off each month. There is no loss due to non-payment.
American Express is a good example.
I suspect that your analysis is dead wrong.
Wrong, you just don't spend more than you take in. I realize that can be very hard to do on a limited income (I have one) when unexpected things happen, but it is possible.
Credit card companies have been far too heavy handed with their punitive charges for a payment that is even one day late.
Even good customers that carry a balance and are not late in five years get penalized with 29% (or higher) rates by some companies if they are on vacation and are one day late with a payment.
That is just flat wrong. It's also bad business practice. Such good customers will either transfer the balance, pay it off, or stop paying entirely. All are a bad deal for the credit card company.
This bill will correct some of that, but it will cost the good customers with higher nominal rates and fewer "deals".
It's a mixed bag, but on balance, I think it's good.
Even good customers that carry a balance and are not late in five years get penalized with 29% (or higher) rates by some companies if they are on vacation and are one day late with a payment.
That is just flat wrong. It's also bad business practice. Such good customers will either transfer the balance, pay it off, or stop paying entirely. All are a bad deal for the credit card company.
This bill will correct some of that, but it will cost the good customers with higher nominal rates and fewer "deals".
It's a mixed bag, but on balance, I think it's good.
It's mostly a matter of convience.
It's easier to use a card to buy gas - you don't have to carry a bunch of cash all the time just so you can buy gas when you need it.
It makes it easier to keep track of expenses to be reimbursed by my employer.
I can still buy something inexpensive without writing a check when I don't happen to have any cash on me.
OldRegular
Well-Known Member
I agree that the credit card banks routinely shaft their card users. However, this is one more grab of power by the "bho" government.
OldRegular
Well-Known Member
You are correct targus!
KenH
Well-Known Member
One can use a debit card for convenience's sake.
But if you go to a gas station to fill up - say you need $20, you put your DEBIT card in the card slot, it may put a hold of up to $100 from your accound - AND it could up to 3 days before the hold is released!!:tonofbricks:
Most stations require you to pay in advance - but if you are going to fill up you dont know exactaly how much it will cost.
KenH
Well-Known Member
Yes, I know...I worked in the credit card accounting section at work for about fifteen months.
I use my debit card and have not had any problem with my bank account.
There are so many problems with this bill it's not even funny:
- CC cos now no longer can penalize you for being 1x30. Now, generally you have to be 60 days late if the CC co raises your interest rate if your risk status increases. However, they have to give you 45 days notice to do so? So will CC cos give notice at the 15 day late mark, or will they do so after the 1x60 has occurred?
- Your bill must be sent 21 days before the due date. This is going to create headaches galore. You charge something on the 20th day and the bill is in the mail, your balance is no longer accurate. And this is going to wreak havoc with billing systems and auto pay plans consumers rely on.
- Banks must get some sort of "permission" for you to go OTL. But if you didn't want to go OTL, would you charge something on your card anyway? Most people I know KNOW they're going OTL.
- The under 21 co-signer requirement is going to hamstring students and families. Now, a parent has to be responsible for a 20 yr old student's credit worthiness, and that student's paying ability going forward could harm a parent's credit score simply because of a new govt restriction. It makes no sense. An 18 year old can choose who the president is but can't choose a credit card? And CC cos are becoming (finally) more selective in wanting students as consumers. This is going to have catastrophic unintended consequences.
- The gift card industry is going to go down hard. These onerous rules will cripple the sales of cards.
For all of these instances, notice this:
CC cos have no cap on interest rates. WHat's to keep base rates from climbing? What's to keep rate-risk compensatory rates from jumping? NOTHING. Companies have been raising rates despite of the falling rate environment to compensate for losses. This will only worsen. And fee income is not restricted. The number of fees that can be assessed by your cc co could climb.
Companies were already making drastic changes to try to be more competitive (restrictions on available credit to students and the population in general). As usual, Big Brother steps in and could harm the American people in the process. I hope it doesn't happen. I fear it will.
- CC cos now no longer can penalize you for being 1x30. Now, generally you have to be 60 days late if the CC co raises your interest rate if your risk status increases. However, they have to give you 45 days notice to do so? So will CC cos give notice at the 15 day late mark, or will they do so after the 1x60 has occurred?
- Your bill must be sent 21 days before the due date. This is going to create headaches galore. You charge something on the 20th day and the bill is in the mail, your balance is no longer accurate. And this is going to wreak havoc with billing systems and auto pay plans consumers rely on.
- Banks must get some sort of "permission" for you to go OTL. But if you didn't want to go OTL, would you charge something on your card anyway? Most people I know KNOW they're going OTL.
- The under 21 co-signer requirement is going to hamstring students and families. Now, a parent has to be responsible for a 20 yr old student's credit worthiness, and that student's paying ability going forward could harm a parent's credit score simply because of a new govt restriction. It makes no sense. An 18 year old can choose who the president is but can't choose a credit card? And CC cos are becoming (finally) more selective in wanting students as consumers. This is going to have catastrophic unintended consequences.
- The gift card industry is going to go down hard. These onerous rules will cripple the sales of cards.
For all of these instances, notice this:
CC cos have no cap on interest rates. WHat's to keep base rates from climbing? What's to keep rate-risk compensatory rates from jumping? NOTHING. Companies have been raising rates despite of the falling rate environment to compensate for losses. This will only worsen. And fee income is not restricted. The number of fees that can be assessed by your cc co could climb.
Companies were already making drastic changes to try to be more competitive (restrictions on available credit to students and the population in general). As usual, Big Brother steps in and could harm the American people in the process. I hope it doesn't happen. I fear it will.
That may or may not be true. Try to rent an airplane without a credit card. When I was in business I could stack up thousands and thousands of dollars in bills on my business accounts but I still needed a credit card to rent an airplane.
Robert Snow
New Member
When I use my debit card, it shows a deduction of only $1 until the transaction clears. I've never experienced what you are saying.
According to the Constitution, since it is not specifically laid out as a function, it is not the Federal's place to regulate credit cards.
Credit cards were not around when the Constitution was written. If the Fed did not regulate the banking industry then who would? The shotgun? If the Fed did not reglulate the banking industry wouldn't that be kind of like letting the fox guard the hen house? The way the banking industry has perforemd lately I think banks should be abolished. After all how much do they work to make money off of the Fed's money? When they fail who bails them out? If I fail in business who bails me out?