How we pay with plastic will change Monday with new credit card rules

[UpInArms]

Source: The Plain Dealer (Cleveland.com)

mean colossal changes for the 180 million people nationwide who have credit cards -- and even millions who don't.

If you pay with plastic:

-No longer will banks arbitrarily be able to change the interest rate on your balance.

-No longer can they confuse you by changing the date your monthly payment is due.

-No longer can they cut your credit limit, allow you to go over it, then charge a penalty.

<snip>

-Interest rates can't be raised on existing balances.

In the past, the interest rate on your balance could be changed pretty much at the blink of an eye. On a $9,000 balance, the $75 a month you paid in finance charges at 10 percent jumped to $217 a month if your rate was raised to 29 percent.

There was nothing you could do about it except pay off the card or transfer the balance. Now, rates can't be raised on existing balances unless you're more than two months behind on payments or you had a teaser rate that expired. However, if your rate is tied to an index rate, such as prime rate, then your rate can increase by the same number of points the index rises.

Read more: http://www.cleveland.com/business/index.ssf/2010/02/how_we_pay_with_plastic_will_change_monday_with_new_credit_card_rules.html

---

very good article - gives a great comprehensive list of the things that can no longer be done to consumers

[Cass]

1. The due date rule is a good one...actually they all are.

But the changing due dates bit me a few times in the past. Glad to see this reined in.

[Tesha]

14. Even our credit union played the "due date" game.

After literally YEARS of it being 9:00 PM on the 10th of the month,
it suddenly jumped backwards by five days a couple of years ago.
And now it fluctuates unpredictably between the 4th and the 5th.
So after getting burned, we now pay attention.

(Lately, our credit union has been turning into a pretty bad deal
in quite a few ways, so we're starting to consider moving on.)

Tesha

[asjr]

2. They will find a way.

[glowing]

3. And it shouldn't have had a year before the rules were applied.. The banks already

raised the limits to 30% and soaked it to their customers knowing these rules would take effect.

[xxqqqzme]

30. Yep, having a deadline just gave the

banksters a 'get it done date'. All my credit cards(1) or merchant cards(3) raised their rates to the max over the summer of '09. My chase card, thankfully, is almost paid off. I have charged nothing for over year. I was glad I had it last year when my dad died but unexpected expenses are why I had the card in the first place. As soon as it is paid off, I'll go w/ a card from my credit union.

[dkf]

4. Why would someone stay with a company that did this stuff anyway?

I really don't get it.

[pattmarty]

6. If you use plastic, what choice do you have? Me, I have never..............

.............had a credit card, I use a debit or cash. AND, my family's total income NEVER was over 65k/yr. I hate it when some whine over their credit card %'s. You don't like it, get rid of the fucking bloodsucking cards. Even with the new law, they are still getting away with "legal murder". Personally I liked the Bernie Sanders proposal of MAX 15% and quite a few other changes that would control these bloodsuckers.

[SoapBox]

33. We have vendors that require payment up front...

I will just add, that as a small business, we have many (many!) suppliers of stuff that we need to produce a final product for our customers...that require payment up front.

If we have set a production due date for the customer, we cannot wait 1-2 weeks for a check payment to travel to the vendor and then for the product to be shipped back to us...We call for the order, pay with CC and in most cases the supplies are shipped in 24 hours or less. Many of these companies don't even allow COD.

So...we are kind of stuck, from a business aspect...of course, there is my post further down and shows what happened as a result of this situation.

[pattmarty]

37. I should have stated from a strictly personal choice. I realize that..........

..........there are certain business constraints that require instant payment and also certain other cases. From a strictly personal use, I believe that anyone using a credit card (especially nowadays) is nuts, ill informed and yep, stupid. You can use a debit card for really nothing, when you open a checking account (which I still think is one of the "best buys" out there) at a local bank or credit union. If you are normal careful you will not incur any "special" fees or the dreaded overdraft fees. I am now retired and never in my whole fucking life, even combined with my wife's income made over 65K. I have made some "financial" mistakes throughout my life, but not the credit card thing.

[dkf]

41. Is there no way to get a line of credit instead?

Or to hold a cushion of cash?

Credit Cards must surely be the most expensive way to finance anything.

[Lars77]

27. Don't all of them do it? nt

[dkf]

40. My credit union has NEVER raised my rate, nor any of my fees.

In fact, they have eliminated my annual fees, and increased my credit limits, even when I didn't want it to be raised.

When I went to the credit union to take out some cash, they offered me a credit card at a LOWER rate. I think I'm paying like 6% or something. Actually I don't know because I pay it off so I'm not tracking it.

[rasputin1952]

5. Easy way out...

$1.99 scissors.

[rgbecker]

7. There are those that say Obama hasn't accomplished anything.

I say: OOOOBBBBAAAAMMMMAAAA!

[FreakinDJ]

8. The Banks were given so much power under the Bush Admin

it is going to take time to real them in. Making too abrupt a change in policy/regulations can topple an already fragile recovery

[pattmarty]

11. Is that sarcasm or are you really fucking serious? If it were up to me..............

................I would nationalize ALL banks over a certain size and STRICTLY regulate all the fucking others. I think the "fragile" recovery is already in trouble.

[hatesthegop]

15. Are you crazy?

I would nationalize everything and then tax the shit out of the rich (individual income over 350k and family income over 750K) and that would include income from investments, stocks, rental, royalties etc. and I would tax churches but give them deductions for charitble work!!!

[pattmarty]

18. I have been called "crazy" from time to time. Ya can't "nationalize"........

.......everything. Then you would have "true Socialism" and it would never come to pass. I agree with the church thing (that is one of my latest bitches, they don't pay taxes) and am ok with the individual/family, stocks tax thing. Look at some of the more liberal European countries, how they tax, what the results are, and how content the citizens are. Oops, forgot about "free" education/trade school from K-16. I always describe my political beliefs just to the right of Marx. (Not fucking "Groucho" either:crazy:)

[liberalmike27]

22. You say socialism like it's a bad thing

The good thing about laissez faire capitalism is, when it fails, it always has socialism to back it up.

I don't know about nationalizing all the banks, but some fairly severe regulations are certainly called for.

We all need to reexamine everything we've been told, including all the "words" we are taught to hate. It's the brainwashing I always talk about. The only people who really fear socialism, who know what it means, are some very, very rich people. For most everyone else, we'll either notice an improvement, or the same.

If you're in your forties, especially late forties, you're likely making as much as you'll ever make. If you are not already a multi-millionaire, you'll never be, and you should vote accordingly. In a country with one in five unemployed, a private system that has failed its population miserably, we should examine exactly where along the continuum of Socialism<>Capitalism we are, and perhaps shift a bit left. The real insanity is shipping jobs away, with anti-protectionism (Of America, and its workers) for decades, then acting surprised when we've got a 20 percent unemployment rate. You can believe the rich, who control everything, the seats of power at the top, know that was the eventual result.

The people that think all of this just happens by coincidence haven't bothered thinking about it, just a little bit. This was planned, and you can bet your local ditch-digger didn't set it into action.

[booksenkatz]

25. Reccing for this ^^

The best post I've seen here in a long while. Well done!

[pattmarty]

29. Did I SAY Socialism is a bad thing? I said it would never come..........

..........to pass (in this country). What the fuck, is today "confrontational Sunday" or what? Jesusfuckingchrist, "beat me up, I'm a liberal", why don't ya?

[Jackpine Radical]

24. Goddam socialist--

Move over. I'm right beside you.

[nimvg]

19. That's Why...

...it'll never be up to you.

[pattmarty]

38. Yep,

[pattmarty]

9. Yeah, and??????????? By the way, I am one of "those".

[goclark]

16. +1

[leftofcool]

10. Yet Elizabeth Warren has already stated they have found a way around 8 of the new rules.

[pattmarty]

12. Jeez, I wonder how they could have done that so easily and quickly?

:sarcasm:

[salguine]

13. It sounds good on paper, but the way things work in America today, I suspect

the banks will still do all this stuff anyway, and nothing will be done about it because there's no oversight or supervision that amounts to anything any more.

[Bette Noir]

32. The bank I have my credit card through was driving me crazy

with a three-week billing cycle that was hard to keep track of. As soon as the new law was passed, they switched to a more reasonable schedule, in accordance with the new rules. As much as I hate to say anything nice about BofA, they seem to be cooperating with the spirit of the new rules.

[Bluenorthwest]

17. Milquetoast 'reform' by medicore minds

a picture of what they would do with health care, half measures favoring the money.

[warm regards]

20. I particularly like the one that forbids them from changing interest rates on existing balances.

The fact that they can do so now seems a little like loan-sharking.

[varelse]

21. Sending a Democrat to the White House to back up the Democratic majority in the Legislature

has paid off.

[Hawaii Hiker]

23. Obama needs to bring this up constantly come election time

This credit card reform act is profound, & really helps the consumer, this was desperately needed...

[olegramps]

26. Just great. Not. They stood by and allowed the Banks to raise the interest rates to usury levels.

I am not impressed in the least. How can banks justify interest rates of 23%. I have always payed off my credit cards at the end of the month, but I can sure imagine being in a bind and needing something and being stuck with usury rates. Fuck everyone in congress that allows this to happen. There should be federal laws determining allowable interest rates. Until the congress stepped in an overrode state laws, states had usury laws. So now they have to notify your that they are going to raise your rate from 23% to 90%.

[latebloomer]

28. Bill Maher had a woman on his show Fri nite

Can't remember her exact title but she's the overseer of TARP in the Congress or something like that. She said that the banks have found a way around almost every one of the new regulations. She also said you would not believe the constant daily barrage of bank lobbyists in Congress.

on edit- oops, I see leftofcool already posted about this hours ago. Her name is Elizabeth Warren.

[SoapBox]

31. Just got the "we're increasing your rate" letter

...yup...I knew it.

We have a State Farm CC that is used for business purposes. I've been WARNING (read that as screaming at the employees and managing partner) that our staff needed to contact me if they were making large product purchases...but, they didn't listen and ran it "over limit" again (the 3rd time in 6 months).

SO...State Farm sent out a letter that they are raising the rate from about 10% to "20.99% PLUS the Prime Rate"...looking at at least 30%?!? And, "The PENALTY Pricing APR will remain in effect for a MINIMUM OF 6 MONTHS. Your account will be reviewed monthly AFTER 6 months...The Penalty Pricing APR (Get this!), will remain in effect for a POTENTIALLY INDEFINITE time period and will apply to ALL outstanding balances on the account."

I have 3 State Farm insurance policies...guess what I will begin shopping around immediately.

This whole thing feels criminal.

[gtar100]

34. I'm dismayed at all the crooked methods these people use to fraudulently steal money

Two-cycle billing (charging interest on average daily balance over last *two* months); cutting credit limits then allowing customers to go over the new limit then charging fees; etc...

How could *anyone* go over their credit limit if they weren't allowed to do so in the first place? Using a debit card only, I can't overdraw my bank balance. Zero is zero. It's a disgusting game they are playing. You could have a $10,000 limit but they won't decline any charges that take you over that because they can charge you $39 if you do. The credit companies could put the safeguards in place but they don't. It's a game and a very cynical game with terrible consequences on people.

These are people using people. It is a person who thought up the idea, a person who implemented it, and a person who got taken by this game. It flies in the face of this feigned "love of country" we hear so much about from so many people, in particular from the "conservative" camp. The screed is about how important economic freedom is, but in practice it's all about using people as cash cows without any sense of welfare for them or the community in which we all live. If anything screams that corporations are not persons, this is it. Nothing could be more anti-human than to simply use a person without concern for the consequences.

[girl_interrupted]

35. Elizabeth Warren: Shortcomings Of Credit Card Reform Show Need For CFPA

Elizabeth Warren: Shortcomings Of Credit Card Reform Show Need For CFPA



The credit card reforms enacted by Congress and signed by the president last year are set to take effect on Monday. Unsurprisingly, credit card issuers have already found several ways to get around the reforms.

Harvard professor Elizabeth Warren, chairwoman of the bailout oversight panel, said on Thursday that the shortcomings of the credit card reforms show the need for an independent agency that protects consumers from the financial industry.

Warren described a new credit card trick to get around new restrictions on arbitrary interest rate increase and "hair trigger" rate increases for barely-late payments.

"Last week, somebody showed me a letter from their bank that raised their interest rate from 9.9 percent to 29.9 percent -- not because the person had done anything wrong or failed to pay, just a rate increase -- but then gave a so-called 'rebate' back to 11.9 percent," Warren said. "So now the company can impose its 29.9 percent rate increase anytime it wants because that is the actual rate on the card. In other words, this issuer has just figured out a way to slide slightly over from the rule of the CARD Act and avoid the intent of the rule in order to go back to the practices that Congress has deemed abusive." The fed gave us obvious protections against a couple of provisions but they should have given us a big hammer and they didn't."

http://www.huffingtonpost.com/2010/02/18/elizabeth-warren-shortcom_n_467295.html



Another "bonus" of the Credit Card "Reform" Bill that was attached to it: "New law allows loaded guns in national parks " http://www.msnbc.msn.com/id/35484383/ns/us_news-life

[girl_interrupted]

36. Credit-Card Fees: the New Traps

Credit-Card Fees: the New Traps
Law Allows Some Aggressive Lender Tactics to Continue

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 biggest new tactic may be one of the oldest: raising rates. As long as credit-card companies inform you ahead of time and don't make any sudden rate changes, they are mostly free under the law to charge whatever they want. They can raise the rate on new purchases made as long as they provide 45 days notice that they are doing so.

Card companies also plan to collect more interest by switching customers to variable-rate cards from fixed-rate cards. Variable rates, which are linked to an index like the prime rate, are low now. But they give the companies more flexibility to collect a higher rate in the future as long as they alert customers to the terms now. Many card companies have already sent out notices that change the terms of the card contract to a higher or variable rate.


Cardholders should expect to see more fees for extra services, such as requesting a year-end itemization of all your purchases, paper statements or getting extended warranties on purchases. "You're going to see a lot more tricks in terms of fees," said Robert Manning, author of "Credit Card Nation" and founder of the Responsible Debt Relief Institute.

Banks already are reaping more fees on overseas transactions. Not only are they raising foreign-exchange transaction fees—the cost customers pay for purchases made in foreign currencies—but they are expanding the definition of what qualifies as a foreign transaction.


Avoiding such fees is sure to get trickier. Only about 20% of U.S. credit cards currently have an annual fee, according to industry statistics. But that number will likely rise because most direct-mail card offers are for premium cards loaded with reward programs—but also fees. Plain-vanilla cards that don't have any annual fees (or rewards programs) represented just 11% of mail offers in the fourth quarter, according to Mintel Comperemedia, which tracks credit-card mail offers. J.P. Morgan's Chase card unit and American Express are among those that have recently introduced new cards with annual fees.
http://online.wsj.com/article/SB10001424052748704804204575069374130248754.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+%28WSJ.com%3A+What%27s+News+US%29

Another "bonus" of the Credit Card "Reform" Bill that was attached to it: "New law allows loaded guns in national parks " http://www.msnbc.msn.com/id/35484383/ns/us_news-life

[drmeow]

39. "You have to remember,

these companies aren't making these changes because they wanted to," he said. "They've been dragged kicking and screaming, and they're not really happy about it."

My response to those companies - "In the immortal words of Darth Cheney, 'Go f**k yourself'!"