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Savvy credit-card users have forced J.P. Morgan Chase to pony up more in rewards payments than the bank originally projected. Buried in an otherwise positive second-quarter earnings report Friday, in which the bank announced a record $8.32 billion profit, was the admission that credit-card customers were redeeming points faster than anticipated, resulting in a $330 million charge. “This is maybe larger than we have seen over the course of the last several years,” said Marianne Lake, the chief financial officer, during a conference call with reporters. “We do pretty regularly review our rewards liability in light of evolving consumer behavior.”...

If you have bad credit in the new era of credit card regulation, be prepared to pay -- dearly -- for the privilege of using credit. That's the message underlying recent credit card offers that feature jaw-dropping interest rates of up to 79.9 percent. The sky-high rates may be a sign of things to come in the market for so-called subprime credit cards as issuers who lend to the riskiest of borrowers try to figure out how to stay in business and comply with the new credit card reform law. "We need to price our product based on the risk...

NEW YORK — For Citibank credit card holders, there is one way to escape the bank's rate hikes currently under way: Meet a monthly spending requirement. Those who meet the spending minimum — in some cases $750 a month — will be able to get a rebate on their total interest charges for that month. The rebate could cover some or all of the interest rate hike. Customers also need to make payments on time to qualify for the rebate. Without giving specifics, Citi said the monthly spending requirements and interest rate hikes will vary depending on the cardholder's credit...

As if hyperactive Washington politicians haven't already grabbed enough power by taking over banks and car companies and trying to control everybody's health care, now they are getting closer to centralized bureaucratic control of the entire consumer credit market. Pending legislation to create a superpowerful Consumer Financial Protection Agency (CFPA) would take an ax to financial freedom and significantly increase consumer costs. That's not what most people would call "protection." The bill already has made it through the House Financial Services Committee, chaired by Rep. Barney Frank, Massachusetts Democrat. It is expected to reach the House floor shortly after Thanksgiving....

The Political Gap That Divides Generations Susan Fikse, Issue Number 24, July 2009 Kim is a 25-year-old Christian, a nurse who graduated from Calvin College in Grand Rapids, Mich. She voted for President Bush in 2004 and characterizes herself as pro-life. With just that information, it would be easy to categorize Kim as a conservative Republican. But in November, she cast her vote for Barack Obama. She was not alone.Survey data shows that while fewer than a quarter of white evangelicals between 30 and 64 supported Obama, that number increased to a third for white evangelicals under 30. Kim’s reasons for...

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years. Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit. Banks are expected to look...

Advanta to cease new credit card lending Advanta plans to cease new credit card lending as it battles losses; shares fall On Tuesday May 12, 2009, 10:20 am EDT SPRING HOUSE, Pa. (AP) -- Advanta Corp. said late Monday it will shut down its credit card lending operations next month as it battles surging loan losses. Shares tumbled more than 6 percent, losing 7 cents to $1.06 in early trading Tuesday. Shares have dropped 88 percent over the past 12 months.

(RTTNews) - A bill to crack down on what consumer advocates call unfair and deceptive practices in the credit card industry is poised to pass the Senate as early as this week. Sen. Chris Dodd, D-Conn., Chairman of the Senate Banking Committee, said although consumers have an obligation to pay their bills, they also have rights that need protecting. "When credit card companies engage in deceptive practices that are designed specifically to trip up the consumer … then [consumers] feel deceived and want change, and that's what we're attempting to do here," Dodd said at a press conference Tuesday. Dodd,...

This week, with his pronouncement that “credit is the lifeblood of a healthy economy,” President Obama reiterated what has been one of his most common themes in diagnosing our economic problem. The president has relied on this bedrock belief to propose policies that place the restoration of credit as the highest priority. However, despite his seemingly earnest intentions, the president and his economic advisors have misdiagnosed the ailment. Savings, not credit, is the lifeblood of a healthy economy. When not used properly credit can be like a cancer that sickens an otherwise healthy economy. What everyone seems to have forgotten...

One of the biggest causes of the financial crisis was that Americans were borrowing (and spending) more money than they could afford to pay back. So how are credit-card issuers reacting to consumers' attempts to live a more financially responsible lifestyle? They're threatening to cut their credit cards off if they don't spend enough. Loretta Maxwell of Troy, Mich., thought her credit score of 790 buffered her against most of the fallout of the credit crunch. When Chase (JPM) closed her $6,000-limit card in December without warning after two years of inactivity, she called to fight it. She was unsuccessful....

WASHINGTON (Reuters) - The U.S. credit card industry, harshly criticized for imposing surprise fees and interest rate hikes on consumers, may face a day of reckoning on Thursday. The Federal Reserve is to vote on credit card reforms that may bring some relief to customers who face a variety of ways for being hit with late fees, universal defaults, shorter payment periods and confusing payment allocations for different balances. Credit card users likely also would see easier-to-read tables in their monthly statements as a result of the changes. The new rules, which were proposed earlier this year, are expected to...

Credit crunch for consumers As card issuers hike rates, consumers forced to work harder to protect credit By Andrea Coombes, MarketWatch Last update: 1:36 p.m. EST Nov. 23, 2008 SAN FRANCISCO (MarketWatch) -- As credit-card issuers raise rates and fees and lower credit limits, consumers face higher-cost debt -- and more work maintaining their credit score. In some cases, banks' former darlings -- consumers who paid consistently and on time but let their balances ride -- now are being hit hardest, asked to stomach higher interest rates and fees or try their luck with different card issuers. For instance, some...

NEW YORK – Cash or credit? For more Americans, who have already maxed out their credit cards or are just trying to manage their spending better in the tough economy, the answer is increasingly the old-fashioned one. Retailers like Wal-Mart Stores Inc., Target Corp. and J.C. Penney Co. are noticing a marked shift away from credit cards in favor of cash and debit cards. A big factor is less credit available as major card issuers cut spending limits and raise fees even for customers who pay their bills on time.

You've got to love the banking industry. As our friends in the financial sector were passing the hat among taxpayers last week for $700 billion in bailouts to cover their crappy mortgage investments, they were simultaneously condemning the House of Representatives' passage of a "Credit Cardholders' Bill of Rights," which aims to crack down on some of the industry's more troublesome practices. The legislation -- HR 5244 -- would, among other things, end card issuers' self-proclaimed right to change interest rates at any time. Instead, a 45-day notice would be required for any increase. It also would give cardholders more...

[C]onsumer credit became so pervasive that paying cash became passé. Want a new $32,530 Dodge Ram Crew pickup? Take a lease. Sick of your old house? Get a 100 percent mortgage and trade up. Face lift? Round-the-world cruise? New PC? Three-hundred dollar sushi dinner at Nobu? Whip out that plastic. It was this behavior—the endless willingness of lenders to lend and borrowers to borrow—that kept the consumer economy humming uninterrupted from the early 1990s, straight through the brief recession of 2001, until the credit meltdown of 2007. But many of the lenders who extended credit recklessly are now acting like...

The people who created this country built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence. Benjamin Franklin spread a practical gospel that emphasized hard work, temperance and frugality. Millions of parents, preachers, newspaper editors and teachers expounded the message. The result was quite remarkable. The United States has been an affluent nation since its founding. But the country was, by and large, not corrupted by wealth. For centuries, it remained industrious, ambitious and frugal. Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what...

The Web sites may not look quite as polished and the eligibility requirements may give you pause, but when it comes to low fees and generous rates, credit unions match banks head-to-head. It's not that you'll find drastically better deals at credit unions, but their products should be among the options you consider when searching for savings and checking accounts, CDs, small-business, mortgage and auto loans, and credit cards -- particularly now, given that credit unions in large part sidestepped the subprime crisis. Consumers should "include credit unions in their comparison shopping," said Greg McBride, senior financial analyst with Bankrate.com....

There is definitely a shift from cash to credit cards worldwide, just as there was a shift from renting to home ownership based on the wide availability of mortgages, but is only a matter of time before this comes to a screeching halt. Visa (V) and MasterCard (MA) get paid a fee which is equal to a percentage of each transaction, and have no credit risk. Mortgage brokers have no direct credit risk either and they get an upfront fee when the transaction closes. If a borrower defaults, mortgage brokers do not lose a penny. The losers are those who...

NACS is endorsing proposed legislation that addresses credit card interchange fees. U.S. House Judiciary Committee Chairman John Conyers (D-MI) and Representative Chris Cannon (R-UT) are expected to introduce the Credit Card Fair Fee Act next week. "As entrepreneurs and businessmen, we want market-based solutions to our issues. The Credit Card Fair Fee Act is the free-market solution to the battle over interchange rates," Richard Oneslager, NACS chairman, told NACS Daily. NACS issued the following Action Alert to retail members on Thursday: The most important action you can take in the short term is urging your representatives in Congress to support...

Bank of America abruptly notified cardholders in good standing their rates would skyrocket if they didn't opt out fast. Is BofA greedy or needy? Credit-card issuers have drawn fire for jacking up interest rates on cardholders who aren't behind on payments, but whose credit score has fallen for another reason. Now, some consumers complain, Bank of America (BAC) is hiking rates based on no apparent deterioration in their credit scores at all. The major credit-card lender in mid-January sent letters notifying some responsible cardholders that it would more than double their rates to as high as 28%, without giving an...