Finally Some Relief From Credit Card Companies?
By Logan Murphy Thursday Dec 18, 2008 11:09am
After years of brutal and what should be criminal business practices by America's credit card industry, it appears that some relief may be in sight.
WASHINGTON – Federal regulators on Thursday adopted sweeping new rules for the credit card industry that will shield consumers from increases in interest rates on existing account balances among other changes.
The new rules aren't set to take effect until 2010, but they're welcome nevertheless.
The new rules prohibit:
_Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.
_Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.
_Unfairly computing balances in a computing tactic known as double-cycle billing.
_Unfairly adding security deposits and fees for issuing credit or making it available.
_Making deceptive offers of credit.
I've had to deal with several of the above issues in the past and know first hand how quickly credit card fees and increased interest rates can bloat your balance and spiral out of control. Luckily, I was able to stop the bleeding, but thousands of people have not been able to do so and have ended up in financial and personal ruin. These regulations are long overdue.
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If your payment arrives in time to appear on the statement in hand, it's on time. I've received bills which showed my payment credited. THEN, on the line below that, there's a late fee because the payment they tell me they got wasn't there on time?
Another thing we can all do now. When shenanigans like the above occur, it's really important to call the company and object. I've had lots of customer service experience and those folks answering the phone have lots of leeway on cancelling fees and charges just to get you to stop complaining. The banks DEPEND on your being afraid to call them about your debt. Late fees they can do without. Your monthly payment? Not so much. Threaten to transfer balances to another card and very very often they will do what you want.
The credit card company WILL negotiate when it comes to late fees, annual fees, etc. As long as you DO make your payments, they don't want to lose you.
That said, I think it is unfair to complain about high credit card interest rates when the choice to pay those rates is up to the cardholder. If you pay your credit card bill on time you don't pay any interest, in fact you usually get points or airline miles or some other bonus just for using the card.
Deceptive and fraudulent practices aside, any kind of credit will have rules that can result in extra charges. Buyer beware.
Rather than vilify the credit card industry, I welcome it including their high interest rates. It means that I get easy revolving credit, no interest (assuming I pay on time) and little extras like airline miles. Those who are complaining probably have trouble controlling their spending.
What planet are you from?
It's no secret that if you pay your CC balance within the grace period (usually 21 days), there is no interest charge.
Where are you from?
On a major purchase like a flat screen or new furniture or even smaller purchases, don't pay the full balance within 21 days. There is your world and the world of reality. I'm from the world of reality.
Dude, if you're buying a flat screen TV and you can't afford to pay cash or pay the credit card balance at the end of the month, perhaps you should take a hard look at what you CAN afford.
I don't mean to be harsh but I've been in the situation where my CC interest was starting to get out of hand (many years ago). I gritted my teeth and paid it off and have not paid a single interest charge or fee since then. Shopping around for a different CC might help.
That I'm talking about myself. I'm talking about most people. What if your transmission goes out in your car? Do you want that person to have to wait to get their transmission repaired?
There is a name from the CC places that refer to people like you. They are called Deadbeats, and they usually end up canceling your cards. MOST people cannot do what you suggest and just because you can doesn't mean others can and WOULD do what you suggest.
the companies cannot legally charge interest.
However, that does not prevent 'em from charging service charges, membership fees, etc.
The state lege here is gonna consider bill that would LIMIT the amount of interest legally assessable to THIRTY PERCENT.
Everybody here (NM) knows the predatory lending industry has virtually indefatigable clout in the lege. they NEVER lose.
And WHY 2010, and not now, when consumers need it desperately and the practice was horribly usurious to begin with ?
Give 'em one more year to suck us dry??
Every one of these companies I've been dealing with for 14 years -Chase (especially vicious), Citi, B of A, CapitalOne- every bleeping one of them and without ANY late payments almost doubled my interest - solely because my debt [on the cards] increased. DUH! Cards I now use, where I didn't before, now penalized for me carrying balances.
As a result of all of their NON NEGOTIABLE take or leave it policies I've had to cancel every damn one of them. It took years to build up my credit limits -all fu**ing gone in a heartbeat.
But here's the "good will" you two aren't seeing. While they refuse to redo the interest rate - to get me back again as a customer I'm pummeled with offers for new cards at double my old rates.
They'll loan money out - but only if you're desperate enough to pay.
This is just as big of a financial scam on consumers, as is the firing employees once they've achieved a higher income, the $4.00 gas and the Union busting.
And they all succeeded because we Americans were desperate -and no one was there to cover our asses.
Fu**you Harry Reid and Steny Hoyer.
Good luck finding voters in 2010.
Bravo!
Most of what they are doing was patently illegal until Congress railroaded through the Bankruptcy Bill. Of course Americans just sat there & said nothing, like they do with their daily dose of governmental ass raping,...
i got into credit problems, basically for the above reasons
it took me 4 years to get out of them...
i have been able to establish new credit (need it for biz)
wanna explain to me why my current credit card company doesnt allow for same day payments online?
well, they do, but you have to pay a fee
i dont have the same restrictions with anyone else
one month, i went to pay the day the day before the due date, and the system was down...and when i called, i was told i could pay the fee over the phone...but it would also have a fee
very nice
For decades, almost ANY act or legislation, which originated in Washington, was tailored, somehow, to protect or innovate, profit for the various corporate interests that line Washington's many hidden alley ways.
You and I, are little more than PROFIT centers for our government.
While much needed, this legislation is but a baby step.
less money for credit card companies, equals less political contributions to his campaign.
americans are slaves to debt and our financial overlords.
the financialization of the economy has proven detrimental to all but the wealthiest.
To think any other way would be to open yourself to being a "conspiracy" freak...
Financialization? Nice word. Makes "commodification of the citizenry" sound a LOT more respectable, innit?
Americans CHOOSE to be slaves to their financial overlords.
I haven't paid credit card interest since I first learned the hard way back in the 80s.
I have an incredibly cheap home equity line of credit that I use for things I can't pay back in a month.
If I get to the point where I can't service my debt, then I'll take full responsibility for the mess I created.
or an inheritance/trust-fund.
I think that would put you in a significant minority among your fellow citizen-sheep.
I have a great job in a company I started myself.
I still maintain that credit should be used wisely or you'll end up in the same boat as our government is...deep deep in debt with no way out in sight.
Trying to legislate common sense has never worked in the past.
This is flat wrong and the evidence is all around us. In the past when banks were required by regulation to maintain adequate margins (business "common sense" imho) the "system" worked just fine. When those regulations disappeared, look what we got.
Legislation is PRECISELY needed for those without common sense.
Home equity line of credit is NOT THE SAME as a credit card, stop comparing it. MOST people now days can't even afford to buy a damn car muchless a HOUSE!
Credit Cards in their current incarnation are evil. They allow us to dilude ourselves in believing we can afford anything within our credit limit. Trickle-down economics didn't deliver the income distribution it promised, but it did encourage ordinary Americans to imagine a lifestyle they really couldn't afford. When the government engages in endless deficit spending, that idea DOES trickle down to the rest of us.
"Personal responsibility" has become a catch phrase, void of meaning, coming from a party that abandoned balanced budgets for the enrichment of their cronies.
How much do you make in a year Usimian?
that is to say, if heretofore a business had been inclined to ac ethically with its customers, it would have been at a 'competitive disadvantage?'
Well, I'm SHOCKED. SHOCKED, I tell you!
dont use credit cards
PERIOD
that will solve the problems.
Credit is a rather "new" invention that most of our Grandparents and certainly great grandparents never even thought about using.
If you dont have the money saved you cant afford it. It is unwise to pay debts or go into debts with these things.
Debit cards can secure rental cars or reservations. CC are NOT needed.
Why, if people did as you instruct, the economy'd go in the toi...
erm, I mean...
I use a debit card. Easier than writing a check and just as handy as a credit card. The one thing is, I must have the money in my account before I can spend it.
I also use a credit union, not a bank.
I discovered credit union banking when i was in the service, cuz there was always one on every base, everywhere.
There have been times when they weren't as accessible as they have recently become. It's easier than ever to join one. When you don't expect your bank to make a lot of money, you'd be amazed at the amenities they can 'afford.'
If i had one piece of advice for anybody who'd listen, i'd say: Join a credit union!!!
I use a debit card.
But sometimes for a large (larger than my $1k debit card limit) purchase I use a credit card.
However the economy is falling into a black hole and I am cash (debit) and carry for the foreseeable future.
Things are going to get much, maybe very much worse before they get better.
Our parents didn't have stagnant and declining wages for 30 years either!
Wages did not go up but credit became a whole lot easier.
Well that worked for a while.....
Like Umimian I like to use the credit card companies; not them using me. I have cards that give me discounts on gas (real handy until just a few months ago) and some for air travel or gifts (which I use for holiday giving) as well as loss/damage coverage, rental ins etc etc, all at no cost to me as I pay my bill every month. Use it like a bankcard; don't charge if you don't have the funds in the bank. Better yet, set up autobilling with the credit card company to take it out of your bank account every month; if there's a problem, it is their problem. Charge responsibly and you will never have to pay interest and yet get all the benefits from the card companies for free.
Works foe me.
Been doing it for years.
I admire your financial discipline, though if everyone did as you, what would enable the CC's existence?
Guess what is instore for you credit card junkies; for the next year or so, the credit card companies are going to gouge you, and screw you, and there is nothing to prevent it. Welcome to America
to approx. 12 days from when it arrives. If I let it lie around a couple of days before sending the check, it's bound to be late. Won't do that anymore....
with that company. I also find that the invoice does not seem to come at a regular time of the month.
I thought working assets was supposed to be one of the good guys but I think the card they issue has something to do with B of A, which might tell you something.....
My husband and I decided several years ago to stop using credit cards. We paid off our balance and now if we use a credit card, we know we can pay it off at the end of the month. Nope, we don't have a flat screen tv or granite counter tops in our kitchen or stainless steel maching appliances in our kitchen or a lot of those other things tv tells you that you must have...but we do have zero debt.
It sure is!
I grew up in a home where loan people were calling all the time demanding my dad pay his bills or they would do this or that. I saw our family car being repo'd. One year all our Christmas gifts from Santa were repo'd. I know what it's like to have the landlord lock up the house with all our family's stuff inside.
I became determined a long time ago that that sort of thing would never happen to me when I was in control of my own life. My husband's childhood, while not as shitty as mine, had it's own financial problems. So we are both....um... what's the word? Maybe we are debt "Mavericks" Yes, that's it. You betcha.
It worked for a long time. One day, my 8 year old daughter got sick; now, I have lots of debt. The worthless insurance I had didn't want to pay sh!t. Everyday, I get threatening letters in the mail from collection agencies. I use them to start fires in my fireplace.
Our credit system is a big fat JOKE.
"Our credit system is a big fat JOKE."
So is our health care system. Sorry about your hardships.
"A Day of Reckoning for Credit Card Companies" http://crooksandliars.com/susie-madrak/day-re...
The ABA represents the biggest issuers of Visa and MasterCard. Citigroup, Bank of America and JPMorgan Chase enjoyed almost 70 percent of the credit card market at the end of 2007, according to the Card Industry Directory.
Someone is not happy with AMEX®. > American Express Credit Cards
We don't take American Express: http://www.ctyme.com/amex.htm
Snip - Congressman Louis T. McFadden, Chairman of the House Committee on Banking and Currency from 1920–31, accused the Federal Reserve of deliberately causing the Great Depression. In several speeches made shortly after he lost the chairmanship of the committee, McFadden claimed that the Federal Reserve was run by Wall Street banks and their affiliated European banking houses.
McFadden said:
Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. http://en.wikipedia.org/wiki/Federal_Reserve_...
our economy has been dependent on cheap and easy credit for decades. the economy's need for consumer spending has been well documented. but our stagnant wages, reduced benefits, and increasing unemployment/underemployment led to reliance on credit. it has become part of american culture, a rite of passage for many kids, a way to defer the real costs of things people cannot afford. (not to mention people having to put healthcare, or other vital services on their CC b/c they have NO money)
no doubt people do this to their own detriment, but the govt, the media and corporations are the pushers trying to get more and more consumers hooked into debt slavery. and, that way, they have a steady stream of debt payment coming in to their coffers, and they know that the majority of consumers will be paying monthly payments 'til the day they die.
credit card companies MUST be regulated.
well said.
but other than that, I cannot remember when any credit-card company has lost enough money to go out of bidness.
or did I miss sumpin...i coulda got stoned and missed it
We bailed them out for $45 Billion (off the top of my head) direct and 'guaranteed' $306 Billion of their 'bad debt'.
I am still trying to learn exactly what that bad debt is and what the guarantee means.
I think the bad debt is defunct CDO and CDS. Collateralized Debt Obligations and Credit Default Swaps.
I have yet to understand where the authority (or the money) for the $306 billion came from.
This was not apparently directly attributed to Credit Card activity.
That is coming down the pike, though, because like every thing else in this flim flam economy, credit card debt is securitized. With its own set of Credit Default Swaps and the implicit travesty multiplying effect that we will have when things go bust, as they are doing.
I applied for a rescue dog with a state rescue dog group. Today I was told I have been approved. The group recues small breeds of dogs. My last little dog who had to be put to sleep last Feb. was a bichon. I had had him for about 15 years. Not only was I approved today for an adoption, but there is a little bichon in my general area who is looking for a forever home. He's now with a foster family near here. I emailed the foster mother and told her all about myself. Hopefully soon I will have this little dog right here with me. I am so freakin' excited that I don't much care if the site monitors clip my wings. ;)
I read in betwixt the lines of your post that you weren't going to use a credit card for your potential puppy so I think it qualifies as on topic. Congrats!
Yeah, that's the ticket. If there are any fees for the little dog I won't put them on credit. This little dog is four years old and was rescued from a puppy mill. He has a clean bill of health from the vet and has been neutered. His only problem is that he is shy and the foster mom says he has come a long way. I'm kind of shy too so I think he and I would get along just fine.
They will put a picture of your dog on the front.
Come on patricia, now's the time to come back to credit.
Snip - The Discover Card is a major credit card, issued primarily in the United States. It was originally introduced by Sears in 1985, and was part of Dean Witter, and then Morgan Stanley, until 2007, when Discover Financial Services became an independent company. Novus, a major processing center, used to be partners with the company as well. The Novus logo has since been retired and now the Discover Network logo has replaced it. http://en.wikipedia.org/wiki/Discover_card
(CNBC) Stated today that (Discover Card®) has or will attempt to become a bank holding Co. so as to get at the TARP funds.? (not verified) (Morgan Stanley + JP Morgan Linked?)YES... Does it mean anything? You decide. Wheeee! Free Money! > http://crooksandliars.com/node?page=1
should not be tolerated. In my experience, that has mainly included times when they changed interest rates or payment periods - of course' they claimed that I had been informed prior - in one of those little five page booklets written in legalese in type that requires a magnifying glass even if your vision is 20/20. I refused to pay a late fee and said I'd cancel my card - they dropped the fee. I thought that was odd, as they really don't make any money off of me, as I always pay the balance in full.
Aside from that kind of crap, most people get in trouble with debt because they buy stuff they don't need. I know there are some extraordinary circumstances - a refridge breaks or a car dies or someone gets sick - but the vast majority of people who have credit card debt, have it because they spend money they don't have - or won't have when the bill comes due. It's hard to fight the urge for instant gratification - but it feels so much better not to owe 22%
on balances ForEver.
I was screwed over by a fraudulent Realtor. I did nothing wrong, but lost thousands because of the lying bastard! Now I am being hammered again with run away credit card fees, even though my credit score was nearly 800.
One way or another, these bastards will find a way to bleed you. They really are parasites.
I saw my sister's daughter get into credit hell. Everyone tried to talk to her and stop her but it didn't work. God only knows how much money she owes to how many different credit cards.
These people are nothing but legalized loan sharks! Thanks to Tom Delay and the wonderful republican congress, millions of Americans have been legally robbed.
The only way to get relief from a credit card company is to never borrow money from them. They are not your friend. They are not a rich uncle to borrow money from. They are a ruthless business model that doesn't care that you lost your job, or have cancer, or that your wife left you. They want their money and they want it fucking yesterday. Only use them in an emergency if you cannot pay them off every month. And even then, if you are going into the poorhouse anyways, don't use them at all. Better to be poor with less debt than poor and a slave.
http://www.indebtwetrust.org/
Always keep in mind, the credit card companies aren't in business to help you out, they are in business to make money.
The enabler is the Fed. A true "fUND-amentalist". Like (amitola) said above, "It's hard to fight the urge for instant gratification - but it feels so much better not to owe 22% on balances ForEver." What are the option(s)?
Is there any chance we could also do away with User Agreements that even lawyers can't decipher?
I think we'll find that lawyers are the ones who craft said, "User Agreements". They would kindly explain, on an hourly rate. :-P
Saw on the teevee some time ago a lawyer revealing that he's an expert in contract law and cannot understand the agreement he was presented and required to sign in order to get a cc.
Further, did you all know that those "freebie" gifts... miles, gas, etc., are all not free? The merchant pays for those by way of higher discount fees (the fees that a merchant is charged to accept credit cards). Some card issuers charge as much as 3 percent more than the regular 3 - 5 % discount fees when the credit card user buys goods. Ultimately, who do you think pays for that? The best part is that those freebies are a profit center for VISA, et. al. For example, you buy an airline ticket for $300 and get 1,000 "free" miles. The cost to the credit card company is about a tenth of a penny per mile, or $1. They turn around and charge the merchant 3%, or $9, for those miles. Wow, only an 800% markup!
And don't get me started on fraud. Yup, the merchant is the one stuck with the loss, not VISA, MC, AmEx or Discover! They all advertise what a great job of protection they do for you, but the entire responsibility for loss prevention is on the merchant's shoulders. So the next time you make a purchase on the 'net and the retailer makes you jump through hoops -- like only shipping the goods to the billing address of the credit card -- don't blame the merchant, blame the g-d credit card company.
Credit cards are wonderful things, and have facilitated our way of life. But, like everything, too much is too much. Combine that with overly aggressive marketing of credit, and you have another financial bailout.
Regulate now, or pay later!
Part A says: "We lie like dogs. So, do you still want the card -or not?"
Part B says: "We're going to fu** you, hard." Do you still want the card??
Part C says: "And this is what we're going to do to your sister -if we feel like it... How's that pal? Still desperate enough to continue??"
Part D says: "And if you don't like what we do -BFD? Who you gonna call - some poor schmuck in India???
"..Ha ha ha,ha...India...oh that's funny ..HAha ha ha ha ha..."
Most law students in their final year can't figure out the user agreement.
By 2010 is too much pressure on the banks. How about when the Enterprise returns to Earth in 3010?
http://video.google.com/videoplay?docid=-9050...
How come when the feds lower the interest rates --credit card rates are not lowered?
when you put your money into a savings account what interest rate does the bank pay you ?
and when banks take your savings account money and lend it to someone what do interest rate do they charge?
and who made up the subprime loan scheme---did home buyers trick the banks into it?
that's why we love banks and insurance companies?
The Fed Rate doesn't require anyone else to follow.
Credit Card rates are what they think they can get away with.
Banks don't lend your savings account money, they borrow the money from the Fed. They charge as much as they can get away with.
Subprime lenders were people who made a specialty of lending to folks who had bad credit, for much higher interest.
After the repeal of Glass Steagal in 1999 mortgages could be sold by one bank, or subprime lender as the case may have been to another bank.
This led to a decline in the quality of loans, the originators didn't keep them so they didn't care if the people could repay, at all.
Investment Banks bought them and sold them as bonds, they sold 'insurance' called Credit Default Swaps.
Ratings companies overrated everything in sight. Ever CDS sold allowed the Investment Banks to create another Collateralized Debt Obligation, a Derivative and sell it, with another CDS.
Much this was illegal for most of the Twentieth Century. Both the Republicans and the Democrats signed on to reversing that and getting us into the deep hole we are in today.
As long as property values kept rising this was a ponzi scheme that could keep going.
This same stuff is coming down the pike in Credit Card Debt.
This is a flim flam economy falling into a black hole.
these assholeshave been F*#King the american people for 30 years. when will the people who get elected start looking out for the worker, in 2 years. this just gives them to bump interest to 25 or 30 points, and they will. costco card sent out letters, as of jan 1,2009 the interest will go to 24.99%,just because they CAN. Am I wishing they will do something. after the last 8 years, I can see just where the congress is and its not with the American worker.
of you get blank checks in the mail from credit card companies? I am tired of this crap and I certainly hope my mailbox doesn't ever get ripped off.
and usually stuff them back in the "no postage required" envelope and mail them back to them. At least it costs THEM something that way.
and ask them to knock it off with the blank checks.
All it took for me was one phone call and they have never done it since.
I have hearing problems, and find it hard to understand their agents when I talk to them on the phone. But they usually leave me alone when I make them pay for the return of their "cheques".
But I had to get my kids out of hock. They got cards and believed the bullshit and started accumilating debt. Thank God I inquired because I noticed they had quite a few things that I knew they could not afford on their salaries. They finally fessed up and I paid off their card and now they have quite a collection of all the cards they have cut up which they have received since then. I may make a collage out of it one day. "Ode to debt".
I hate those things. I make sure I shred or burn them but I too worry that they could end up in the wrong hands.
My latest credit card statements came with a "new" user agreement. If you miss a payment (even minimal) with my Visa or Capital One cards now, your interest rates automatically increase 5% per annum. How can they change the user agreement after being binded by a previous one? I find it odd.
None of this gives me any incentive to return to using a credit card. They can still charge anything they want, and they can still raise your rates without justification. No thanks.
Want to know who decides what's "unfair" and "too much"? The same assholes who gutted the bankruptcy laws to protect banks and screw consumers.
I'm from the government and we're here to
fuckhelp you.This is the usual government/industry BULLSHIT! Since there is no cap on the already outrageous interest rates these dirtbags charge, they will simply drop the fees and raise the rates. You are not stupid enough to believe that when the government raises taxes or levies fines on the oil companies that they actually PAY them, are you? Hell, no...it's just politics as usual so their buddies in congress LOOK like they are doing something, and the dirtbags raise the price at the pump and toddle off to the bank as usual.
2010!? WTF!? Weeeeeeenies
If federal regulators think rules need changing, then the rules should take effect at the earliest opportunity. If double cycle billing should not be allowed, it should not be continued for another year.
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