Posted on 05/20/2009 4:28:09 AM PDT by GOP_Lady
Sweeping new restrictions on credit-card companies would ban extra fees and fluctuating rates and arm tens of millions of consumers with more information on their debts.
Starting in February 2010, a Senate bill passed Tuesday would ban practices such as charging consumers to pay by phone and sudden surges in interest rates. Payments above the minimum due would be applied to balances with the highest interest rates. Information once relegated to tiny print must be made clearer, and consumers will soon be told how long it would take to pay off a balance if they pay only the minimum due.
(Excerpt) Read more at online.wsj.com ...
You might when credit card companies eliminate the float or cancel rewards programs because of this legislation. This is no different than the housing stuff--the burden has been shifted from irresponsible consumers to responsible consumers, and now we'll have to carry the water for people who chose not to themselves.
Your unexpected expenses are not that much different then mine have been over the years. I’ve used credit cards for over 30 years and never fallen into such a debt trap. When a particular credit card issuer would notify me that it was unilaterally changing terms (and this did happen at least twice), I would respond by canceling the card and moving to a different issuer. My credit rating was such that I never had trouble moving to a better deal.
Unsurprisingly, the article doesn't understand the finer points of credit card merchant agreements, or, perhaps, the Senate doesn't understand it either. Either way, no surprise.
There is no prohibition to a merchant offering a cash discount to a person that chooses to pay with cash instead of a credit card. It must be advertised as a cash discount. What is prohibited, on the other hand, is charging an additional fee for use of a credit card. While it is two sides of the same coin, the credit card companies see it differently.
Incidentally, there are a lot of these rules that get completely ignored. For instance, a fairly common practice among smaller merchants is to have a minimum charge for credit card use--this violates the terms of the merchant agreement and if the credit card companies found out, the merchant could lose its ability to accept credit cards.
I have had numerous problems with a credit card company that I have(Read Bank of America). Once, in spite of making a payment online on time, the computer system said it would not take my payment “at this time,” thereby forcing me to schedule a later payment and it became late. If one wants to argue a ridiculous notion of “should have sent it earlier,” well no, I shouldn’t have, that’s why there is a due date in the agreement, although I eventually resolved the problem, it was a mess to sort out.
Additionally, my rate was raised without my knowledge, and no indication was given on my bill that my rate would increase. (This was later, not related). Then, because the rate was almost doubled, the interest put me over my limit, further raising my rate and giving me an “over the limit” fee, which took hours to resolve. These credit card companies have ridiculous practices, and there are all kinds of other stories I could tell. I moved to cash about 2 years ago, paying off my last card (I inherited about 10 when I married 1.5 years ago, they were closed first).
I will happily never use one again, probably in the direst of emergencies, medical rates are lower anyway, and I have found in the meantime I can live without a vehicle easier than I can pay down usury-like interest rates, which can vary on a whim. Want more stories, I’m full of em’.
In my opinion this is not a bad thing, but the law of unintended consequences may or may not be in play. If the effort is to socialize, you may well see quite-intended consequences.
They have had the ability to rewrite your agreement every year. Given to them by the same dufers like Dodd and Schumer who are stumbling over themselves to reach a microphone and claim credit for fixing it.
Credit card companies & banks are the new mafia.
Stay with small local banks and run like hell from chase, wells fargo and citibank.
This is correct. It violates the terms of the agreement to have either a minimum charge or a credit card fee, but often goes unreported.
The credit card industry has no business complaining. Their methodology has been anything but straight forward- which has resulted in an image that they actively try to trick their customers and then hit them with super high interest rates. That’s called usury and it’s immoral.
You probably are. I’ve had several accounts over the years. Discover is the best. BoA and MBNA were the worst.
Exactly correct. Damned if you do and damned if you don’t with the FICOs.
“Senate bill passed Tuesday would ban practices such as charging consumers to pay by phone”
I would like to see them banning the practice of charging for ONLINE payments. Good grief - they don’t even have to touch the 1,000’s of payments processed daily - it’s just “a file” to process. My mortgage company charges $10 for a payment from an account that is not with them. They don’t have any retail outlets in my state. I’ve had a car loan with them that I now can pay online for free. Go figure!
For smaller merchants, these are usually mom & pop establishments I don’t mind the minimum purchase. I understand the reason, the purchase has to give them a minimum profit.
I know this may sound silly, but I LOVE Capital One.
They’ve given me a great interest rate for YEARS and their fees are low.
I second the BOFA. I think also, while people theorhetically should be, they in reality are largely uneducated as to the consequences of using credit and practices utilized by these thugs. I take responsibility, but they’re no saints.
I’ll have to look into them ;)
It was a hard lesson that I have never forgot nor forgiven.
I hate to dissent, but I fail to see how it matters. Running a business (manager), I know that 3% is 3%, whether it is on $10.00 or on $500.00. My family was also in business for about $100.00 years. If one’s profit margin isn’t wide enough to cover the fee at $3.00, I find it unlikely to do so at $100.00. I may just be ignorant, but I have never understood the philosophy.
In all sincerity if someone cares to explain their logic behind it, I’d be open, but I’ve never been able to figure it out.
I am so grateful I no longer have any credit cards that I carry a balance on! FREEDOM ROCKS!!
All the dollar signs, sheesh. Our business was open for about 100 years. ::sigh::
I’ve been with Capital One for at least ten years, and they only raised my interest rate ONCE (the rate really was too low).
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.