The new credit card legislation?

[HankB]

. . . With marriage, I find that it is simply not possible to pay off the debt in one month and spread it out a bit. It is tough when you think you have a handle on things and up pops $1,000 in charges in one month....  yep, the wife started using that card....  . . . Suggested to my wife that she have her own credit card in addition to the bank cards that we jointly have.  . . . My thought was to have all of her stuff consolidated on one bill so she can see what she does.... worked for one month.  Three months after the card was issued, the card is max'd

Uh oh.

  . . . and I have to start nibbling away at it so she at least can put gas in her car. 

I've seen this happen before.  (I think the term for this is the "Mink Mad Mary" syndrome, even if no actual furs are involved.) Unless you put your foot down now, believe me, this isn't going to end well. 

[BryanP]

How much spending will just go away because people don't have the will power and self discipline to save?

Zero.  If the money isn't being saved then it is being spent.  It may be spent on smaller luxuries more than larger ones, but it is still being spent.

[slingshot]

I think the legislation may change spending, but they will still spend.  The banks have too much self interest involved to allow that side of their business to go away.  Credit card business is very profitable even if there are defaults.  As with everything, it just depends on how many defaults.  The mortgage "crisis" is the same way.  People got into trouble because of two things:  (1) When the IRS dropped the interest deduction on consumer debt, the borrowing shifted to borrowing against folk's homes.  If you borrowed too much, and with home values dropping in many markets, eventually there is nothing left to borrow or you are upside down on the loans. (2) People bought homes they could not afford due to lax loan practice encouraged by the government buying with adjustable rate loans at low interest rates or buying based on some introductory interest rate.  You throw in the drop in home values, rising unemployment, banks becoming less flexible about loan terms, you have the basis for a building problem.

[Werewolf]

Zero.  If the money isn't being saved then it is being spent.  It may be spent on smaller luxuries more than larger ones, but it is still being spent.

Wrong!

What might have been bought if credit (the card) was available may not be bought at all without it because many won't have the cash and don't have the discipline to save enough cash to make the purchase when they do.

[Marnoot]

Wrong!

What might have been bought if credit (the card) was available may not be bought at all without it because many won't have the cash and don't have the discipline to save enough cash to make the purchase when they do.

If they don't have enough cash to buy a big-ticket $X item, it will have been because they spent $X over time instead of saving it. $X spent in a trickle over time isn't much different than a single $X purchase.

[Werewolf]

If they don't have enough cash to buy a big-ticket $X item, it will have been because they spent $X over time instead of saving it. $X spent in a trickle over time isn't much different than a single $X purchase.

$X spent on buying value meals is way different than $X spent on 1000+ manufactured goods.

One employs a few pimply faced teenagers and a 30 year old trekkie to manage them while the other keeps a large factory employing hundreds or thousands who pump their annual salaries into the economy running.

[K Frame]

This new legislation won't change how I do things at all.

Between the 401K and my personal savings accounts, I put just shy of 40% of my gross pay into some sort of savings every month.

Even with savings of that level I still use credit cards, simply because it meets my ends towards how I prefer to manage my life financially.



Speaking of credit cards, the interest rate jumps have started. I just got notice from my Chase Amazon card that they are raising my interest rate. But, not by much. It's going from 9.9% right now to 14.9% in July.

I rarely carry a balance, and I get reward points, so I figure I'll stick with it. Unless they start trying to charge an annual fee.

[CNYCacher]

$X spent on buying value meals is way different than $X spent on 1000+ manufactured goods.

One employs a few pimply faced teenagers and a 30 year old trekkie to manage them while the other keeps a large factory employing hundreds or thousands who pump their annual salaries into the economy running.

You could have quietly backed out.

[grislyatoms]

I will simply pay attention to which companies hose me and which don't. I will pay off the hosers and direct my business to the cards that have treated me more fairly. I'll let the hosers cancel the card for inactivity.

GE closed a card on me with the "you haven't used this card in x months" crap a couple of months ago. So, I payed off my Chevron/Texaco (issued by GE) card and told them if they don't want my business, I don't want theirs, and that I would not use their financial products ever again.

Probably doesn't mean much in the scheme of things but it felt good.

[280plus]

Honestly, a LOT of people are doing the same thing(s) so even though we may all feel like tiny specs in the eyes of big banking I think they'll get the picture. I'm just like you. BOA will NEVER see my business again and it DOES feel good!  I'll teach those bastards!

[grislyatoms]

I wonder what is going to happen when the big businesses who contract to the big cc companies to issue a card for them get wind of folks doing what I (and others, it seems) did?

If I was an exec. at Chevron/Texaco and learned that folks won't associate with my credit card issuer because they are playing games with my customers, I'd be a bit upset. 

[slingshot]

GE Financial is another ripoff credit card group.  I have a Sam's Club card (discover) and their Care Credit (extended financing for health care costs) cards.  I geneally don't use the Care Credit card.  I use the Sam's Club card mainly to get in the door and use either a debit card or checks to pay my bill there.  They are not shy about raising your interest rate at all if you carry a balance and make a payment late.  They do business very much like Chase Bank.  They do seem to dump cards that are not used.  You can deal with them however if you call.