Posted on 01/21/2009 11:34:59 AM PST by BGHater
There's a simple solution to all the flapdoodle about rapacious credit card issuers: Pay your bill in full each month.
This avoids interest charges and builds a solid credit rating while using the bank's money interest free for about a month.
But this is America, land of the perpetual victim, where no one bothers to review a credit card's disclosure statement.
New credit card regulations take effect in July 2010. Representative Carolyn Maloney of New York has reintroduced the Credit Cardholders' Bill of Rights, which offers the same reforms and would become effective 90 days after President Obama signs the bill into law; the proposed plan could effect such issuers as MasterCard (MA), Visa (V) and Capital One (COF).
The changes, the most significant in about 30 years, affect how banks market and bill credit cards. Here's what you need to know:
* Higher interest rates on a current balance will be permitted only under specific conditions such as the expiration of a promotional rate, late payment or a variable rate. Interest rates on new transactions can be increased only after 45 days' advance notice.
* There will be no more universal default, nor raising interest rates based on a customer's payment history with utility companies or other credit issuers not affiliated with the bank issuing the credit card.
* Payments will be due at least 21 days after the bill is mailed or delivered. Credit card issuers will no longer be able to set early morning deadlines for payments.
* When a different interest rate is applied to various balances, payments will be applied first to the balance with the higher rate or divided proportionally.
* Customers exceeding their credit limit will no longer be hit with a fee if a hold has been placed on their account. This routinely happens to customers who reserve a hotel or rental car when merchants place a hold on the account for the entire amount to be billed several weeks or months in the future.
* Finance charges on a balance due will be computed on charges in the current cycle rather than going back to the previous billing cycle. Double-cycle billing hits customers who pay their balance in full one month, but not the next.
* Terms will be disclosed in plain English.
The new rules sound great, but may have the unintended consequence of forcing those who manage their credit well to subsidize those who don't. This could mean higher interest rates for everyone.
Still, some people refuse to understand this bit of folk wisdom: If you haven't got it, don't spend it.
At age 55 I agree with your solution.
At age 30 I would have hated it.
That’s why I only have one CC; I’ll never open another one to pay one off.
Once an income is established, I’ll fully pay off my CC bill in one fell swoop.
I pay my bill every month on time....
....my Amex card gives me back around $1000 a year for the past 4 years or so.
I have no problem with credit cards so I hope nobody f***s with the system.
You are oppressing me. Help! Help! I'm being oppressed!
Actually ... this stuff makes sense. Credit card companies stretch the bounds of contract law in their favor.
I’ve long wondered why a credit card company could legally change the interest rate on a purchase I’ve already made. Once I make the purchase, shouldn’t the credit contract and interest rate be set? A credit card company should not be able to unilaterally change the interest on the money they’ve already loaned me.
SnakeDoc
>> If you haven’t got it, don’t spend it.
But, the corrollary would be, if you loan it to me at 12% ... don’t later unilaterally demand 18%.
SnakeDoc
This is the rotten part of credit card lending. They raise rates just for the hell of it even when payments are on time.
This is one of the few reforms that is needed. Some of the shadier companies were sending statements out so late that even if the card holder mailed the payment back the following day, it would arrive late. Not everyone banks online.
Otherwise I see two side effects: CC holders will not issue as many lines of credit or as much credit (not necessarily a bad thing given recent events), and the interest rates they charge will be higher overall. Since I pay my bill off in full every month, not a big deal.
But I’m a consumer, a Customer! And I live in Highlands Ranch!
I intend to spend it even if I won’t ever have it, and it’s your job to help me. Or I’ll file a complaint!
“Still, some people refuse to understand this bit of folk wisdom: If you haven’t got it, don’t spend it.”
The problem with people who have huge credit card debt isn’t the interest rates but the fact they spend far more than they earn and then end up in a position where they can’t pay off the cards no matter what the interest rate. These new rules will not do anything to keep dumb people out of debt.
Why should curbing shady practices such as raising interest rates w/o warning to to undisclosed rates of interest,
disclosure of terms in clear language, or manipulation of
due dates result in higher cost to anyone else?
It shouldn’t cost anyone more to force the CC co’s to adhere
to commonly recognized fair practice. Car loans don’t
have this problem.
Forget about credit cards. My house payment is due the first. Do I have to pay it or not?
Sure, I'll deny my wife the medication she needs. Or maybe I'll just walk the 10 miles to work when our only car breaks down.
I'd love to have enough money to pay everything upfront but in a single income family that's not always going to happen. We always get caught up again relatively soon but we need some credit from time to time. I'd just like the card companies to honor their commitments the way I honor mine.
I carry only enough cash for an occasional cup of coffee and use my card for just about everything. I have paid $13 in interest over 7 years and buy almost no checks at the bank. Credit cards are great.
Good. The banks have been squeezing the due date closer to the date they mail the bill. It would be nice if they could hit my gas company on this because their grace period is impossible to meet if you don't catch your mailman at the door and then have him wait for you to write a check to mail that day.
The 8 am due time is a scam too because they are essentially setting the real due date before the printed one. This is especially true when the put the due date on a Monday holiday so the real due date is the Friday three days earlier.
I like the revised bill - taking effect 90 days after signed. The banks can change their systems to suit THEM, so there’s no reason they can’t change them to suit the CONSUMER!
You didn't vote for Obama (presumably), so you not only have to pay for yours, you have to pay for someone else's and a couple the bank foreclosed that are worth less than their loan values.
The credit card companies commit fraud because they do not have the authority to lend their credit. They never told you that there is no money, and, in fact, YOU are actually giving THEM a loan!
They conceal these facts every time they send out an illegal credit or charge card. All commerce operates without real money. House Joint Resolutions 192 (HJR 192) of June 5, 1933 forever changed our way of life when the government replaced real money with “Debt Instruments.”
You are paying the banks and credit companies interest on money that doesn’t even exist! Charging interest on something that doesn’t exist violates federal and state usury laws.
Federal law also prohibits most banking institutions from lending their credit. Any contract that does not have the authority to be created and then ratified is illegal, and therefore void.
Non-disclosure and concealment of the entire terms of a contract is illegal, and is one reason why a contract can be considered fraudulent and void
You do have a right to discharge this debt and get your life back. Just stop paying the unsecured debt and work out something like a dime on the dollar with the “bank” which wasn’t supposed to loan you “credit” when they are willing to make a deal with you. It’s legal and if you know someone in the banking industry, he/she can explain what procedure to follow. Or, like me, you can pay someone to do it all for you. And like me, go forward paying cash only.
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