New Credit Card Rules Have Banks, Consumers Bracing

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.

Read the whole story here.

Comments

[Hdaryl01]

Revolt. Now. Or, accept the status quo and don't complain when this continues to happen.

What does the banking or "financial services" "industry" produce? Nothing. Nada. Zip. Zilch. Rien. The baking industry is a parasitic intermediary that exhibits "industry" only inasmuch as it can create transaction costs, and extracts them from consumers. It creates, designs, produces, mines, harvests, manufactures, develops, etc. nothing. Nada. Zilch. Zippo. It survives like a leach or tick that sustains itself by sucking the life blood from other active, producing organisms. It adds no positive value. And, it created the very mess we find ourselves in.

Think about it. The US government produces dollars. These are not backed by gold anymore, or any other tangible measure of value. Dollars are backed by the full faith and credit of the US Government, by the people, for the people. The people and their institutions, public and private need to save, spend, and invest dollars. The US Government guarantees the vast majority of all loans, deposits, pensions, etc. Now, we need to further "bailout" our economic system due to the folly of the "financial service institutions". How have we chosen to do this? By "bailing out" the "financial service institutions"......credit is not flowing........auto makers are closing...........unemployment is rising....AND we have given them at least $2 Trillion! And, countless rate cuts. And, money supply increases.

What if we let the financial institutions die for their folly. Apply free market principles....And, eliminate the middle man?

[ShawnGrey]

I hope they make those monsters pay. They have been cheating the American people for years and then have the nerve to ask for a bail out.

[list1955]

What's sad is that Citibank after they took our money from the bailout sent out a notice.In microscopic print this notice says after Dec 1 the rate will go up another 8.99%.So they took our taxpayer money to hold theirselves over plus raised our interest rate so that it is now 24.99%.We pay twice for their mistakes which is a joke.I closed mine as I find that amount of interest outrageous in these times.

[VivaZapata]

but didn't Bush urge us to go out and spend after 9/11 and didn't Bill Clinton say we have to spend our way out of this mess? how can we do it now that it's harder to spend what we don't have?

[dandypuddin]

I wonder how many people mistakenly pay their credit card bill(s) before their mortgage payment. Hopefully, no one.

[VivaZapata]

actually, there was a study a year ago that showed people would rather make the minimum payments on their credit cards than make their mortgage payments. this might be simply a case of we-can't-afford-to-make-the-mortgage-payment-anyway.

[doublels]

When I was of age to get a credit card...1971...I just about had to give up my first born child...that I didn't even have yet....to get a Penney's card. I think it should be more like that today. Credit card companies are loan sharks...pure & simple. Ridiculous interest rates, fees, change up on rules. Good to hear somebody is doing something about it.

[Hdaryl01]

No one has done anything yet......there's been a lot of talk........for a long time.......but the Credit Card companies have only become bolder, meaner, less flexible, and prone to changing the rules, increasing fees, adding and increasing late charges, adding and increasing over limit charges (which is really cool when they drop your limit the month before, and the next month's interest puts you over your new, lower limit, which in turn leads to an overlimit fee, AND a "reassessment" of your credit risk due to your balance relative to your new lowered limit, which in turn leads to a massive interest rate increase on this card.........and thanks to universal default other cards....), reducing billling cycles, taking longer to process payments (sometimes due on Saturday or Sunday), yada yada, yada. If it weren't true, and the consequences for consumers real, it would be comic. Who would believe that in the United States, our government protects, condones, and bails out this indentured servitude. All we get is the Bankruptcy Reform Act, and Mandatory Arbitration.

I'll believe it when I see it.

[tazmodious]

I'm not against credit cards though I feel credit card companies are taking advantage of people, especially the young, the old and the poor. It is way too easy to obtain a credit card. Credit card companies set up shop on college campuses and they target elderly people and the poor with those fake "checks" they send in the mall.

People do need to be more cognizent of their purchases utilizing credit, but credit card companies need to be reined in and not be allowed to take advantage of people either with misleading advertisments, mass mailing, those "fake" checks and college tours. Credit companies bank on the fact that people make mistakes and poor decisions. We should not be helping credit card companies take those kinds of advantages.

Furthemore, people should be forced to earn credit and credit cards. If this means that many credit card companies will go out of business, then the US will be a better country for it.

[vippy]

There would not be such a business with credit cards anyway had the American Worker been
paid more of a living wage instead of the intermittent or parttime jobs, which seems to take over
the fulltime jobs these days in order to get out of paying the benefits.

[FogBelter]

I'm pretty sure these regulations are the least of the Credit Card Industries worries. If the US Economy goes off the cliff and mass default of unsecured consumer debt follows ... this industry, and the Banks that back it, are history.

[olephart]

I just have one word for you, bailout.

[NoOneSpecial]

Here's an interesting question.

Since "the people" are the ones who owe the credit card companies for giving them easy-access loans, shouldn't the credit card companies at least be somewhat justified if they are rescued with "the people's" money?

What say you?

[ThePeacemakers]

Do any of you remember the story during the election about Cindy McCain and John McCain's credit card debt?
They had 0% interest and were more than a month behind.
So, if this is true, we're subsidizing the credit card abuse by the wealthy .

[Betsy]

I remember that story. The balance due was over $100,000. Their FICO scores should have taken a hard hit.

[unite4change]

Didn't you know, they only change FICO scores for the have nots.

[ThePeacemakers]

The main missing rule:

Cap the ceiling on interest rates that can be charged to comsumers to max 20% (and they can still make out like bandits, the greedy bastards).

[unite4change]

It needs to come down more than 20%.

[wagthedog1001]

Credit card companies are immoral. Every major religion has laws against usury. They issue cards freely to kids and then get them upside down on payments holding them captive for the duration. Classic case of the rich keeping their foot on the poor.

[spinns17]

i have no problem here .i dont use them.

[3dtrix]

I am never late with my credit card payment.

I am never over my limit.

My credit card company does not charge me an unreasonable interest rate, has never changed my rate, or hit me with unreasonable charges or fees.

I have never had cause to be displeased with the service or policies of my credit card company.

I do not have a credit card.

[RoloTomassi]

Given the previous statements, the last one was the only logical qualifier.

[wm1066]

So how do you travel without a card? Most hotels demand you use a card and you need a card to rent a car. But I agree, I only use my card when I have to. The Companies have gotten to much power and they are killing themselves but they can't see that.

[degenerate1991]

Use a debit card; it works just like a credit card, except you don't borrow the money.

[joeyka]

lol

[Ramirez]

Good points. I'm in the exact same boat, except that I use credit cards all the time.

[ProudNeoCon]

Unfortunatly banks are going after people who can afford it the least. People who do not use credit are in much better position to negotiate. For example, every time bank tried to charge my account or credit card I woudl threaten to take my bussines somewhere else. And they always folded. Why? Because I never owe them anything. I do not need them they need me... So who a the end gets hurt - they guys who max out their credit cards...When will people wake up that credit is bad...

[RoloTomassi]

Credit isn't bad as long as you use it appropriately--as a means of cash flow and liquidity. Unfortunately, there are millions of Americans who could not survive--literally--if not for credit cards; those people are the folks who have cronic medical issues. Unless you're making a high five to six-figure salary each year, it is virtually impossible to keep up with insurance deductibles, co-pays, hospital and medication costs without a means of credit to float through heavy peaks in medical bills.

[who38]

Do you want to guess how many of those people are in favor of socialized medicine or universal health care? Not many.

[olephart]

I had two major operations and three other procedures in 2006 and 2007. My share of the costs were about $30,000. This was spread over 4 hospitals. All I had to do was simply talk to the accounting people and set up payment schedules. I paid no interest and no fees. They were delighted that someone would just pay them on a regular basis with no hassles.

[Southrnbelle]

It's about damn time!!!!

Credit card companies are the "Loan Sharks" of the 21st Century!!!!!!!!!!!!!

[OlskoolDem]

I'll believe it when I see it on my statement.