Yesterday the House passed a bill to move up the effective date for credit card reform to December 1st, from February and August 2010.
In May, President Obama signed into law a credit card reform act to crack down on the way credit card companies raise fees and interest rates. The reforms were scheduled to roll out in 3 parts over 12 months.
What congress wanted to do was lock in a ban on interest rate hikes on existing credit card balances. In other words, Congress wanted to help credit card holders trapped in a never-ending cycle of debt just in time for the holidays.
I like many of you have some credit cards. Fortunately I've been able to pay off the majority of them, cut them up, but still allow the account to remain active. If you cancel the accounts outright, it affects your credit rating. You would think that being a responsible credit card holder would please the credit card issuers, but that is not the case at all.
Over the last 2 months every credit card issuer have sent me a letter detailing changes in my credit card terms. The interest rates have all risen to over 20%. The default interest rates are all nearly 30% if you miss a payment or are late on a payment. If this isn't predatory, then I'd like for someone to tell me how this is justifiable behavior.
What the credit card companies are doing is taking advantage of the time between when the reform act was signed and when it would go into effect by pushing through even more interest rate and fee hikes. In other words, they are trying to offset the coming reforms.
I personally believe this is immoral behavior that only hurt the most vulnerable of American citizens and line the pockets of the the credit card issuers. That is why I don't understand why top Republicans oppose this act.
This is an issue where Republican opposition is hurting average Americans and small businesses alike. The Credit Card Fair Fee Act is the type of legislation that any member of Congress should be supporting regardless of party.
This brings me to Senator Richard Shelby, the highest- Ranking Republican on the Senate Banking Committee. Yesterday I listened to the Senator as he made every excuse as to why this act shouldn't be enacted.
To paraphrase the Senator, "Credit care issuers need more time. They need time to change their software. They need time to notify the credit card holders. It needs further review. Etc., etc., etc."
Well I don't believe the Senator is being sincere. I believe his pockets are being lined by those in the banking industry. I believe that this is another case of the Republicans just saying "NO". I believe this another case of the Republicans opposing the President just for opposition's sakes. I believe the GOP really doesn't care about the plight of average American citizens.
Once again, I believe this is an issue where Republican opposition is hurting average Americans and small businesses alike. The Credit Card Fair Fee Act is the type of legislation that any member of Congress should be supporting regardless of party.
What is your opinion? Am I overreacting? Is this just more of my liberal slant seeping out? Or are you satisfied with ever increasing interest rates and penalties being imposed on average American citizens by what I consider "Predatory Financial Institutions"?
P.S. Why do banks and credit card issuers allow your accounts to be overdrawn in the first place? Is it because they earn billions of dollars collecting overdraft fees? Ummmm!
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Comments: 114
It's more than obvious to me that those whom wield the greatest political power have forgotten where they came from, the people whom voted for them and the promises they campaigned upon.
In other words, they now feel that they are better than us. They've grown accustomed to the good life of being wined and dined by the lobbyist and others whom line their pockets.
We know that the mantra of most of the Republican party is business before citizens. I'm sure a few dems have the same mantra.
Guess who has very good credit and who has average credit?
Despite having no credit cards, I have a very good credit rating. I have always heard if a person doesn't have credit cards, they can't build a credit rating. That's crap.
repugnicons and many Dems will never desert their corporate masters just for the voters.
That way we could buy our government back.
I also got notices that all my interest would be going up, IF I had a variable rate. Fortunately, last year I took all those "4.99% until it's paid off" checks and swapped accounts around until I had all guaranteed rates - the highest is 8.99%, and most are less than 6%.
I'm gonna Facebook this.
You are like me. I've managed to climb out of ever increasing credit card debt by cutting them up and consolidating the rest at a low interest rate of 5% from my credit union.
Thank you for posting this article to Facebook. Please send me your Facebook user name and I will invite you to be a friend there. All others I'd ask you to share this on Twitter if you have an account.
It's important to know what's really going on politically here in the United States. Maybe we can foster a change. Hopefully we will be able to do just that.
One of the few victories for us that they didn't succeed.
I think GOP hates average American Citizens is not exactly the phrase you are looking for.
Unfortunately what I think we are seeing is a way for Americans to continue to remain in debt, the credit card companies make the money from interest, and they often rely on low introductory rates to lure people in for 6 months or a year and then slap them with a rate higher usually doubled to tripled what the introductory offer was for.
Ok, this is about the banks and finance companies making money, nothing more nothing less. These people have guaranteed salaries, and without fail (BOTH parties) seem to remember to vote themselves a raise, and spend millions of dollars on new planes so they can travel in luxury.
I think right now the GOP is trying to define itself, but all i can see them doing is committing political suicide.
While there are things that the GOP does and votes against, I agree with, there are probably just as many things that they are doing that I don't agree with.
Would you like to pass the shovel to the GOP or shall I?
Mooch
(Independent Conservative)
Is there any way that the GOP is looking at this as the government regulating banking? Because if they look at it that way, they are looking at is as a further push to socialism, and not really helping.....its more control given to the government to regulate something else.
Just my last thoughts.
mooch
Hi Mooch.
If they don't hate the Average American citizen, then why to they condone seeing them remain in debt?
Don't they realize that there are people like me who've decided that this will never happen again? How is this nothing more or less than making money when I no longer use their credit cards?
If this act is not approved, right before the Christmas season, then the Gop is doing nothing less than committing political suicide.
Neither you or I need to pass the shovel to the Gop. They are slowly digging their own graves as we speak.
So nice hearing from you again.
Your friend.
Lloyd
Truthfully I think that whatever the reason they are doing this just to 'spite' the democratic party and probably not thinking of the overall consequences.
I quit associating with the GOP, and they got an earful from me about what they are doing....believe me they got an earful.....I got a beautiful form letter and these issues will be brought up to the chairman type crap......
Mooch
People like Clark Howard have been talking about this for years, and trying to get people to react. Some did most did not.
I don't remember how, but Clark once told how when paying off your card, you can cancil it and the Companies cannot affect your credit. The Key that I remember is you have to pay it off first.
He does say there is a good way to keep one card though. Put it in a ziplock bag with water, then freeze it, then if you have to use it, you have time to think about it, as the water thaws. LOL
Reform needs to be done, but from what I have seen so far, I have little doubt there is likely something wrong with this bill. So far the Democrats has screwed up every bill Pelosi has written for Obama.
The credit card companies made it so easy for those unable to manage their finances to get into debt.
Reform is needed and I can't understand why any politician would be opposed to it.
My point is that with what I have seen of the bills written so far, and have not seen this one yet, there have been so much pork, and so little to actually deal with the issue at hand, that I feel that could be the reason.
I need to look this bill up and see what it actually says.
"The credit card companies made it so easy for those unable to manage their finances to get into debt."
This is one area Clark Howard talked about, personal responsibility, and Credit card company baiting, on the one hand you need to be responsible for your actions, and on the other hand these companies should have regulation that would restrict them from baiting the people to get in over their heads. Both need to work together.
This Administration wants to control everything, and that is not good either.
"This is one area Clark Howard talked about, personal responsibility, and Credit card company baiting, on the one hand you need to be responsible for your actions, and on the other hand these companies should have regulation that would restrict them from baiting the people to get in over their heads. Both need to work together."
Once again I agree with you. However, human tendencies must be considered and bought into the equation.
You and I both know that with the ability to purchase anything from a 6-pack of beer to paying your telephone bill with a credit card, that many people will jump on these unsolicited credit card offers in a heartbeat, without thinking about the consequences of their actions.
Although you may believe that the Administration wants to control everything, I believe this is something that's in the best interest of the average American citizen.
House Financial Services Committee Chairman Barney Frank, D-Mass., was the other sponsor of the bill.
The House passed the bill 331-92.
Maloney said credit card companies "brought this on themselves".
What are they going to do about it.
Coffin: $2000
Flowers: $500
Stiffing the credit card company: Priceless.
get more cards, get more !!!
Go Ruth!
All the Lone Sharks throughout the world would be proud of that credit card company. Sounds like organized crime to me.
So, let's see if I have this right: Lots of time is needed to decide to reign in unfair and anti-competitive behavior of credit card companies but we should be in a hurry to give a carte blanch to our recently appointed military commander on committing more young men and women to possibly die in the line of fire.
Take time protecting bankers and credit card companies but spend blood freely?
It's nothing more or less than political posturing. When the GOP opposed anything they need more time. When they support something they want it done right away.
One would think that they are the Majority Party. They fail to accept the fact that they are the Minority in both the House and the Senate.
Go figure!
I only bank at a Credit Union and if I have to charge large items, such as auto repairs or household things, I use my revolving Home Equity loan at 4.5%
I see banks exactly as I see insurance companies. They have only their stock holders to keep happy and the only was they can do that is to rip off the little guy. Credit Unions are entirely different and my money is just as protected. Why would anyone go to a bank? If we all got rid of them, imagine how quickly they'd change their terms.
Thanks for the helpful tips. They were very valuable.
The banks feed on people that can ill afford their product.
The profit is in the fact than people don't really understand what they are getting into.
Banks love it when you can only pay the minimum payment.
And that sadly is how people that have no business having a credit card or a mortgage get into so much trouble.
But in m's pea brain it ain't her problem so screw em'.
Such a Christian thing to think.
"If you can't afford something, don't buy it. "
Can't afford health care then don't get sick.
Parents need to start teaching their children the consequences of being in too much debt, Don. Then people start needing to be responsible. It's not the government's job to bail anyone out - not individuals, businesses or local governments. They are not our keepers.
And credit card companies only prey upon people who allow themselves to be preyed upon. Credit cards are not a necessity.
Marilyn have you tried to book an airline ticket lately? Have you tried to rent a car lately? Have you tried to make hotel reservations within the last 20 years?
Obviously not! Because if you have, you would understand that having a credit card is a necessity.
It is all about controlling your spending.
Once, when a car company refused my debit/credit card, I purchased a prepaid Visa just for that purpose and they were fine with that.
No one has to have a credit card.
Because they find themselves in this predicament doesn't mean that the credit card issuers should take advantage of them.
They should give credit cards only to credit worthy individuals. They should stick firmly to the the credit card limit. They should never, ever allow the card to go over the limit.
And they should stop the predatory practices of doubling or tripling the interest rates if the credit card holder is 1 day late with their payments.
Hi Marilyn.
I agree this is the best option for those with the means to have money deducted from either their saving or checking account. But you must admit that many people don't have the resources to make hotel, airline and car reservations via a debit card.
It's only human nature to use a credit card for emergency travel if the resources are not there. Does that mean that the credit card companies should take advantage of those who don't have the resources to book these types of reservations?
What I have done, I have done by watching my spending, an d regulating what I could.
With the credit card companies, one of the issues they have in baiting, is that when someone does good in paying, they keep raising their limit, making it much easier for them to get in over their heads.
If they are elegible for a raise in limits, then the card company should have to review their situation, and then set it in accordance to their free income, not their pay off history. This would stap a lot of the over soending and emergency issues that has arisen.
I agree with you on this Dan. I'm truly amazed at how many of my credit cards that initially began with $500 to $1000 limits now have limits up to nearly $4000.
Fortunately, like you, I've watched and regulated my spending. If I were to ever max out my credit cards I would never be able to make the monthly payments.
So your assessment that limits should be set in accordance to the individual's free income is something we both can agree on.
We all need to take more responsibility for how we manage our money, but we also need to curtail the benefits that allow businesses to abuse their customers (e.g., your credit card example, insurance companies dropping you from coverage if you try to use your coverage, etc.).
David the Republicans believe that people should fend for themselves until they themselves are in need of liberal policies such as unemployment insurance, social security, being paid time and a half after working 40 hours per week, etc., etc., etc.
And, Lloyd, conservatives don't want anyone bailed out - not individuals, businesses or local governments. Each needs to learn to be responsible. And our federal government needs to re-read the Constitution to find out what they are and are not supposed to be doing.
In a perfect world, your vision of a free market would be utopia, however we haven't reached that point yet. Because of this, the only institution that can regulate our Capitalistic, free market system is our Government.
It's best that we work with our Government in making things better for all of us as opposed to fighting their efforts.
Average American citizens just don't have the resources available to contend against the lobbyists and special interest groups whom have unprecedented access to the powers that be.
Actually that's not the way things always work. Consider poker. Sometimes one player who's not as skilled as one or more of the others wins everything. Consider agricultural commodities. Sometimes the best run farms can be wiped out by a natural disaster.
Regardless, we've never had Adam Smith atomistic capitalism in the US.
Hi Nippy.
Please tell me more of this Adam Smith type of capitalism you speak of. Never heard of him before.
Bad businesses will die if we let them.
now they don't want us to read 2000 pages of fine print re: Healthy 'Futures' Act, in fact making it impossible with only a few hours total read time!
We Are Smart enought to Know that what the 'promise' is, IS IMPOSSIBLE!
1. CASH: You'll be saving more of your hard earned money because you'll be paying less interest and fees to your credit card company.
2. Communication. Your credit card company will now have to do the following:
Effective 8/20/2009 they have to give you 45 days notice of a rate change so you have time to pay it off or do a balance transfer.
3. If you are 21 year old or younger, being approved for credit cards will be tougher. You will now be required to prove you can repay the credit card, or you must have a parent or guardian promise to pay off your debt if you default.
These are just common sense solutions. It really doesn't take reading 2000 pages of fine print to understand that this act is in the best interest of average American citizens.
I do believe what credit card companies do to people is comparable to those payday loan places. Credit card companies hit up vulnerable people, students are a favorite target, and then own them.
I ditched my credit card about 2005, That is when they began adjusting the interests rates up, but were adding big limits.
Insane.
I agree with you. Credit card companies are very predatory. They take advantage of America's most vulnerable people without ever considering the consequences of their actions.
Still defend the policies that sold us to Communist China.
I don't think they are stupid, but I do think many feel that we live in a world that is fair and balanced. They believe that any misfortune was bought about because of bad decisions. They refuse to acknowledge that just one family illness can lead to financial ruin.
Maybe they live in a perfect world, but the majority of average everyday American citizens have yet to find their own Utopia.
That is the only reason they have come up with "death panels" and more weird stuff.
IM a Goldwater republican and this is what the GOP should back.
This Act prevents a person from committing or engaging in an unfair, deceptive, or abusive act or practice under federal law in connection with any transaction with a consumer for a product or service. I agree.
This Act ensures the appropriate and effective disclosure or communication to consumers of associated costs, benefits, and risks. I agree.
So in conclusion I feel the Consumer Financial Protection Agency is a good idea.
What is your opinion?
I have my doubts about it because I am concerned that it would create a new bureaucracy without providing real regulation, and will take away power from existing federal agencies that are already charged with consumer protection, including the Federal Trade Commission.
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This Act ensures the appropriate and effective disclosure or communication to consumers of associated costs, benefits, and risks.
If it takes away power from existing federal agencies, then so be it. It's time that the welfare of the American people take priority.
I never hear Republicans complain about unemployment compensation. I never hear them complain about the 40 hour work week. I never hear of them refusing social security. I don't see them declining the use of Medicare.
They only pick and choose what part of the liberal agenda that they disagree with, spread mis-truths and cloud the fact that we are better off for the efforts of the Democratic Party.
Credit cards are good to have in case of an emergency.
"(Sec. 5) Prescribes the contents of credit card price and availability information which the Board of Governors of the Federal Reserve System (Board) must collect and make public semiannually.
Requires the Board to report to Congress annually on estimates of the approximate, relative percentage of income derived by the credit card operations of depository institutions from designated sources, including interest rates and fees imposed upon cardholders."
Why does any business have to report to Congress about what they are doing? To report to the treasury board and Congress is way out of line, this is not Russia or China.
"(Sec. 6) Prescribes a standard for the initial issuance of subprime or "fee harvester" cards (accounts requiring first-year fee payments in excess of 25% of the total amount of credit authorized).
Prohibits payment of any such fees (other than late fees or over-the-limit fees) from the credit made available by the card."
Subprime, isn't that what cause this last crash in 2008? Subprine should be banned all together.
"(Sec. 8) Requires the Board to prescribe regulations implementing this Act within six months after its enactment. "
Doesn't the Government screw up enough without getting back into the banks again like the did under Clinton, which caused the 2008 collapse... I swear, refusal to learn from history is one thing, but to repete the same mistakes this soon is shear stupidity. No wonder the Republicans are fighting this. Yes there are some good ideas, but some very bad ones too.
Come on Dan. If you don't know the answer to your own question, then we live in different countries.
You've seen how these businesses behave if left unregulated. Their predatory behavior immediately kicks in.
And as far as all the Sections of the bill you've refereed to, I have to say that I agree with each and everyone of them.
They all are aimed at helping average Americans and small businesses alike.
Could you please elaborate on:
"Why does the GOP hate average American citizens?"
.
"They Don't Really Care About Us."
Could you please elaborate on:
"They Don't really Care About Us?"
.
Right now the left wanr\ts to put faith in the Democrats, and they are laughing at you all the way. Do you actually think they give a rats ass about the people? If they did, they would listen to what the people have been saying, but they are doing what they want, and you people are supporting them blindly. You are taking us down a road that we'll never recover from.
If both sides don't wake up, America is gone. With Obama, Pelosi, Snow, Reid, and the rest of the idiots in office, we have a lot is trouble coming our way.
Spoken like someone who's never BEEN anywhere else! LOL And, it's a nice slap in the face to every one of our European Allies!
Could you please elaborate on:
"They Don't really Care About Us?"
Yes I can.
The Republican Party could care less that the majority of bankruptcies filed in the United States are due to medical costs. They refuse to acknowledge that just one illness in the family can ruin a lifetime of work.
Because those senior members of the Republican Party benefit from the best tax-payer funded health care available in the United States, they could care less about providing that same tax-payer funded health care to those American citizens with pre-existing conditions. Those people are basically collateral damage, left to die a slow painful death.
I could go on and on and on, but I believe you get my drift.
They Don't Really Care About Us!
The word socialism and liberalism has been so overused that it no longer has the desired effect.
Our allies in Europe, Australia and Canada would never substitute their Universal health care and subscribe to the nonsense we call health care experience here in the United States.
With doctor visits costing nearly $100 per visit and non-generic prescription drugs costing $100 or more for a 30 day supply, the average American citizen cannot afford to get sick.
Yet Republicans rail against preventative medicine.
Go figure!
What makes you believe that the Republican Party couldn't care less that the majority of bankruptcies filed in the United States are due to medical costs??
What has given you this impression??
"They refuse to acknowledge that just one illness in the family can ruin a lifetime of work."
How have they refused to acknowledge that just one illness in the family can ruin a lifetime of work??
"Because those senior members of the Republican Party benefit from the best tax-payer funded health care available in the United States, they could care less about providing that same tax-payer funded health care to those American citizens with pre-existing conditions."
So, you're saying that because they have health coverage, that is the reason you believe they couldn't care less about providing that same tax-payer funded health care to those American citizens with pre-existing conditions??
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