Armed Polite Society
Main Forums => The Roundtable => Topic started by: Desertdog on February 21, 2010, 01:58:29 PM
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You need to get rid of long term CC debt and pay off the CC each month. Getting rid of the CC debt can be hard, but if you can, get a bank, CU, or home loan with a fixed interest rate so that the rates don't skyrocket later.
Federal Credit-Card Law to Create New Traps for Consumers
The Wall Street Journal
http://www.foxnews.com/politics/2010/02/21/federal-credit-card-law-create-new-traps-consumers/
A new federal credit-card law that takes effect Monday could erase billions of dollars a year in fees and interest charges paid by consumers. But card issuers are already deploying new tactics that could prove costly for even the most cautious cardholder.
A new federal credit-card law that takes effect Monday could erase billions of dollars a year in fees and interest charges paid by consumers. But card issuers are already deploying new tactics that could prove costly for even the most cautious cardholder.
The law made some important changes. Card companies must now tell customers how long it would take to pay off the balance if they only make the minimum monthly payment. Customers can only exceed their credit limit if they agree ahead of time to pay a penalty fee. And unless a cardholder misses payments for more than 60 days, interest-rate increases will affect only new purchases, not existing balances.
Banning these and other profitable tactics is expected to cost the card industry at least $12 billion a year in lost revenue, according to law firm Morrison & Foerster. This has sent the industry scrambling to find new sources of revenue. So get ready for higher annual fees, higher balance-transfer charges, and growing charges for overseas transactions.
"There are countless fees that can be introduced and rates can go through the roof," says Curtis Arnold, founder of U.S. Citizens for Fair Credit Card Terms Inc., a consumer-advocacy group.
Consider the new offer from Citigroup Inc. The bank will give cardholders a credit of 10% on their total interest charge if they pay on time. That sounds enticing, except that if you don't pay on time, your interest rate is 29%.
The new regulations, dubbed the Credit Card Accountability Responsibility and Disclosure Act of 2009, couldn't come at a worse time for banks, which have been trying to rebuild balance sheets hit hard by the collapse of the housing bubble and the recession. Now, their credit-card operations are getting pounded by a downturn in spending and sharply higher defaults as unemployed Americans and other cash-strapped customers stop paying their debts. Last year, Bank of America Corp. and J.P. Morgan Chase & Co. suffered combined net losses of $7.8 billion in their credit-card operations, and this year will bring more red ink unless there is a miracle rebound.
The banks could be hurt further as consumers try to clean up their finances, especially high-cost credit card debt. The average American was running a credit-card balance of just over $5,400 at the end of 2009, down about $200 from five years ago, according to TransUnion, a Chicago-based firm that tracks credit data. In such an environment, consumers may push back against new card fees or jump to a rival issuer determined to compete by keeping fees low or nonexistent.
Click here to read more from the Wall Street Journal.
http://online.wsj.com/article/SB10001424052748704804204575069374130248754.html?mod=WSJ_hp_mostpop_read
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The law made some important changes. Card companies must now tell customers how long it would take to pay off the balance if they only make the minimum monthly payment. Customers can only exceed their credit limit if they agree ahead of time to pay a penalty fee. And unless a cardholder misses payments for more than 60 days, interest-rate increases will affect only new purchases, not existing balances.
They've already been proactively raising rates in anticipation.
Brad
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They've already been proactively raising rates in anticipation.
Brad
And changing due dates. And I have one card that has now added a statement fee. So if they have to send me a statement I pay a fee plus interest. :facepalm:
The gov did a bang up job on this one too. Now we will have to bail out the credit card companies.
jim
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I have cards that have cranked down on the due date so that it has gone from a month (or 25 days) down to two weeks -- from the date of the statement, not from when I receive it.
God help people who are forced to use credit cards and not pay them off immediately. As usual, the government's attempts to fix what they had previously allowed to be come seriously messed up has only made things worse.
29 percent? I'm old enough to remember when an interest rate that high was considered BY STATE LAW to be usurious. State law doesn't say that any more, but as far as I'm concerned it's still usurious.
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Wow, buying something you can't afford is a bad idea? Credit card companies try their best to screw their customers? Fed.gov's meddling makes things worse for the very group they claim to be helping?
I'm just shocked...
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Yeah, my citibank card jumped to 24%. My parents card did the same. Both cards have never missed a payment, theirs has never, not once in the life of the card for more than 25 years has carried a balance past the payment due date. Mine does not have a balance on it anymore. Good luck ever seeing another dime in interest from me. As soon as I figure out how to get some cash out of the travel miles they can suck it. There is no way I will pay the new crazy annual fees on the card and on the rewards program, let them collect merchant fees from my purchases, and "reward me" in travel miles that become harder and more expensive redeem each year.
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Thank god I only use USAA. They're not changing much, which is nice.
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My parents have had a Visa for decades. They have always paid the balance off each month so they never paid any interest. They received a notice that they would have to start paying a yearly fee because of this so they dropped it like a hot potato. Glad we retired all of our CC debt last year then closed all but one. Guess I learned something from them after all, finally sunk in.
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Credit card companies try their best to screw their customers?
Try this one on for size: my company switched to a Visa payroll card - essentially a debit card that they direct deposit to. I generally pull most of my paycheck over to my regular bank account on payday, leaving a bit on the payroll card as a backup.
A couple weeks ago, I had around $110 on the card, and needed some gas. Even at current prices, the Blazer only holds $43 worth from totally dry, $35 when the needle bottoms out. No luck; apparently the minimum auth amount is now something over $110 - the clerk had no idea what the amount was. To add insult, Citi/Visa/somebody (not the station) charged me a $0.50 decline fee. So now I get to pay them for the privilege of not getting gas because I didn't have an arbitrary, undisclosed amount well over what I needed to spend on the card.
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Try this one on for size: my company switched to a Visa payroll card - essentially a debit card that they direct deposit to. I generally pull most of my paycheck over to my regular bank account on payday, leaving a bit on the payroll card as a backup.
A couple weeks ago, I had around $110 on the card, and needed some gas. Even at current prices, the Blazer only holds $43 worth from totally dry, $35 when the needle bottoms out. No luck; apparently the minimum auth amount is now something over $110 - the clerk had no idea what the amount was. To add insult, Citi/Visa/somebody (not the station) charged me a $0.50 decline fee. So now I get to pay them for the privilege of not getting gas because I didn't have an arbitrary, undisclosed amount well over what I needed to spend on the card.
That sounds like a great deal for Visa and not so great for anybody else.... it is a hassle for you to deal with transferring cash to a checking account. I imagine Visa makes a metric ass load of cash on the merchant fees on folks who use that card for all of their purchases including bills.
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Is it possible for Congress to really be so stupid as to believe corporations are simply going to eat the loss of revenue without passing it along to their customers?
I'm pretty sure they know exactly what happens and they just don't care what anybody (with over a double digit I.Q.) thinks because they think their are enough socialist/Marxists/liberals/progressives idiots who just want to "stick it to the man" and get a free ride, that they will continue to get voted into office.
I think the paradigm is shifting a bit now, but I hope everyone doesn't just kick back to bask in the glow of the Scott Brown win in Mass. thinking the "Republicans are back baby!" then get their (and ours) ashes handed to them in the next couple elections.
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My parents have had a Visa for decades. They have always paid the balance off each month so they never paid any interest. They received a notice that they would have to start paying a yearly fee because of this so they dropped it like a hot potato. Glad we retired all of our CC debt last year then closed all but one. Guess I learned something from them after all, finally sunk in.
I should also mention that even if you have the money ready and waiting to pay off your credit card debt in full, that can still be a fun journey. They'll hang up on you, tell you the wrong amount, say you overpaid, say you underpaid, all kinds of crap. Anything to keep that card open...
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I should also mention that even if you have the money ready and waiting to pay off your credit card debt in full, that can still be a fun journey. They'll hang up on you, tell you the wrong amount, say you overpaid, say you underpaid, all kinds of crap. Anything to keep that card open...
don't call anyone. Do it all online. I'm currently in the process of doing all this, and hope to be done in the next few months. Here's hoping!
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I should also mention that even if you have the money ready and waiting to pay off your credit card debt in full, that can still be a fun journey. They'll hang up on you, tell you the wrong amount, say you overpaid, say you underpaid, all kinds of crap. Anything to keep that card open...
Yeah. I dealt with all of the hassles with the 30% interest and related problems on my personal credit card accounts earlier in the decade, before Congress went through the motions of nipping at the hand that feeds. I quit using my cards and paid off all of my CC debt, but several of my accounts still exist. At least I haven't received any statements for non-usage, yet.
29 percent? I'm old enough to remember when an interest rate that high was considered BY STATE LAW to be usurious. State law doesn't say that any more, but as far as I'm concerned it's still usurious.
Most states still have usury laws that limit the interest one can charge to well below 29%. Like around 10%, and maybe a little higher with a written agreement. BUT, there is usually an exception (loophole) for revolving credit (credit cards). Failure to understand this anomaly in the application of a standard of fairness is what gets a lot of people in trouble. Even though there is fine print somewhere way down in that credit card application that says the bank can retroactively increase the APR for any reason it can come up with, or no reason at all, most folk assume there is a reasonable legal limit for interest that can be charged, since it's that way for everything else. The banks like to whine about how the market must be free to control itself and that regulation of interest they can charge is bad. That sounds all fine and dandy, but it really doesn't work that way. When banks are paying 1% or less, then turning around and charging us 36% to borrow the same money, it has nothing to do with the market. Industry practices have, and as pointed out in the title of this thread, will continue a systematic control of the consumer that effectively minimize any potential consumer benefit of the market.
BTW, I sent a letter to Sen. Hutchison a few years ago regarding the credit card interest rate issue. Her response to me was basically that everyone with credit card problems was irresponsible. I can assure you that she will not be getting my vote for governor (not that she'll win the primary, anyway).
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don't call anyone. Do it all online. I'm currently in the process of doing all this, and hope to be done in the next few months. Here's hoping!
I think I have a spare 28.8 modem, if that will shave a few weeks off the process.
You really should get broadband, though. I can manage most transactions in under a minute.
:P
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I try to bank exclusively with a local private credit union.
Financial institutes, like lawyers, add nothing to the economy. At best they increase efficiency. And I think we can agree we are well past that 'at best' point.
That both are now viewed as the careers to enter to make wild money shows how sick the system has become.
Our best bet is of course to elect honest folks with basic intelligence.... :facepalm:
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Financial institutes, like lawyers, add nothing to the economy. At best they increase efficiency. And I think we can agree we are well past that 'at best' point.
That both are now viewed as the careers to enter to make wild money shows how sick the system has become.
I think this ought to be emphasized.
If someone makes "wild money" after producing some useful product, they have likely managed to create wealth in the economy 100-1000 times what they made in "wild money."
If someone is making "wild money" as a transactional agent, likely they are reducing the net wealth in the economy. Any increase in efficiency is lost as they take their slice.