Credit Card reform

It's here. If you haev good credit and pay your bills on time get ready to be screwed. Your now paying for all the irresponsible CC holders.

I'm a firm beliver in the power of CC's. I can honestly say I would not be in the postion I'm in today w/o the skilfull leveraging of credit cards.

I was checking my credit cards this morning. I have one card with a 25k balance/100k limit...the rate is locked. My other daily cards carry no balance...all the purcahse APR rates sky rocketed to 21.99% Crazy!

My credit score is right at 800.

"I would not be in the postion I'm in today w/o the skilfull leveraging of credit cards. "

Can you elaborate on that?

^^^^^ Yeah, I would love to know.

If you haev good credit and pay your bills on time get ready to be screwed. Your now paying for all the irresponsible CC holders.

How are we paying for irresponsible CC holders?

when I first gradutaed college I was able to get credit cards with limits in the 40-60k range. I was also getting low interst , no fee balance transfers (basically free cash advances if you knew what you were doing) I was able to get thousands of dolalrs to buy and sell everything from cars/boats/guns/ even a piece of land, lol.

I made decent money doing it untill the offers started drying up and limits got reduced.


Manzo, banks still need to make money...all the irresponsible people paying late and racking up huge fees can no longer be charged these fees. Now APR's will shot thru the roof untill banks can find loopholes in the new reform.

Buying and selling things when the economy was good.... Isn't that how we got in this mess?

But if you charge and pay off at the end of the month like you should then there is no change.z

The thing is, the government bailed the banks out by giving them Millions to help people, but what did the banks do, the held on to the money and invested it, made enough to pay the government back in some cases and now they are hanging on to their money with an Iron Fist. Why do you think the economy keeps getting worse. The bail out did not do what it intended to do. I know in AZ which was really hit hard because of the housing mess, the government said there should be X percent of home mods done by now, I think the number was somewhere in the 70% range and guess what, AZ has done about 18% of where they should be. Why, because there is no regulation. Banks would rather forclose than modify a loan. The whole bail out was basically smoke and mirrors to help banks, not the people. Oh well, the rich get richer and the middle class are now drilled again. Sorry for the rant, but it is just not right.

"Banks would rather forclose than modify a loan."

True story. Or they sell on a short sale and the ban actually makes money on it becasue both the FDIC and whatever form of mortgage insurance they had both pay out for losses.

^^^^ Its even hard to get them to do a short sale anymore.

I am closing my mortgage business because the government has made it almost impossible for people like me to do a mortgage. They are making it so banks are the only ones that can fund a loan so they can make back the billions in bailout money taxpayers like me and you gave them.

The economy is only going to get worse.

The bail out did not do what it intended to do.

I'm surprised!

A month or so ago, I saw a special about the credit cards. They interviewed a guy from India who came over to this country 20 years or so ago and went to work for a large bank. Chase I think or maybe another large one. Anyway, he invented the fees that everyone has grown to love. (Sarcastically speaking) If you late one day, you pay. If you go over your balance, you pay. It was a real money maker for the banks. Here's the thing, I wish I could remember his name, but I think it was on Frontline, but he actually invented the 0% interest introductory rate. He's retired now, and living the good life, so he spoke very candidly. He said that everyone will eventually miss that payment, or be late a day, and that's when they have you.

Here is what gets me: When I make the payment on the 18th, but it was due on the 16th, and the bill shows my payment towards my account because it was billed on the 20th, it cost me $35. Sometimes I call, sometimes I don't. Here's what was cool though. I asked my wife to make the calls one month. I felt I had a good argument, but wanted her to feel my pain. Anyway, getting rid of the late fee was as simple as using the menu. She never had to speak to an operator!

When this change was about to take place, they interviewed a credit guru on the local radio morning drive. He stated that you cannot call and simply cancel a card, like in retaliation of a new, higher rate, as that lowers your credit score. So, they have you now and for several years until you rebuild your score. So what do you do, besides never use them?

Right now, I am in the process of paying everything off as quickly as possible.

Cancel your card and don't worry about your score?

pay off your cc every month and you have zero issues. if you are carrying a balance, then you bought something you could not afford. that is why we are in the mess we are today.

I could be wrong, and usually am, but I think in the new credit card leg. there was something about the CC companies can no longer charge late fees unless you were over certain number of days late. I thought I heard that somewhere, but could be wrong. Also alot of companies used to raise your rate if you were late paying another lender. Chase was terrible about this and B of A got me because I was 2 days late on pmt due to the fact that another company changed my billing cycle. Anyway, supposedly CC companies can no longer raise your rate if you are late paying another lender. We'll see. The banks and CC companies are still paying Lobbyists Millions to try and get their way.

tomothy, not worrying about your credit score is ignorant. credit greases the wheels of life. Having good credit makes life much easier and cheaper.

adirbikingdad, I know the piece on frontline...my old consulting company was mentioned on it. they invented the software that routes higher dollar pmts before lower dollar pmts so banks could charge overdraft fees.

Trian, agreed paying off balances monthly is ideal, but in the instance it does not happen, having to pay obscene amounts of interest for a person deemed to be low risk is ridiculous and counterintuitive.

Sam, i'm still curious.
How were you able to get credit cards w/40-60k limits right out of college?

^^ I have no idea. I was shocked. I had clsoe to 200k in avaible credit on a few diff cards I used at the time. My credit was mediocre...maybe 720? Makin 45k/yr.

My guess prolly the same reason banks gave 500k mortgages to people making 35k.

Other than the 25k on one CC, I'm CC debt free. the 25k is at 6% but being used in a project tht's gonna gross me 10-12%. I'll pay it off when the money is returned. ( nothin is guranteed, but it's calculated)

I dont' know why I even have a CC with a 100k limit still, lol.

Now 12 years later making a tad more than 45k, lol, I still have 2 of the cards...the limits are well under 20k on both.

Sam, I was trying to remember, was it a guy in Texas that started that movement? To stack the checks and run them through in the order that would make the banks the most money?

train, in a perfect world, you are correct, but wants sometimes get in the way of what is right and the needs sometimes get in the way of what people can afford. I wish I could do things all over and I would have no debt and my house would already be paid for, but that is not the case. My debt is not bad compared to most, but it bugs the heck out of me. I can take care of it in a year if I work hard and don't lose focus. I cannot see how folks could have 60K in CC debt, just pay the balance and sleep at night.

We got the Chase letter today, my rate is not going up. The biggest change I saw was that they could no longer charge you an overlimit fee, unless you agreed to it. However, they could add whatever you were over to your required payment.

I got that same letter from chase today too.

"Or they sell on a short sale and the ban actually makes money on it becasue both the FDIC and whatever form of mortgage insurance they had both pay out for losses"

PMI insurance would cover the bank down to 80% loan to value. Any losses beyond that go straight against loan loss reserve. FDIC has nothing to with it. In foreclosure auctions, the bank is only allowed to recoup the mortgage amount, interest due and legal fees. Anything beyond that goes back to the owner.

(Message edited by psudy on February 24, 2010)

Here is the nuts and bolts of the new act.


CARD Act explained
The Credit Card Accountability Responsibility and Disclosure Act (CARD Act)
of 2009 was passed by Congress and signed into law on May 22, 2009. The
CARD Act is comprehensive credit card legislation that aims to establish fair and
transparent practices relating to the extension of credit under an open-end consumer
credit plan.
Because most elements of the bill go into effect on Feb. 22, 2010, it is necessary
for you to destroy your current applications. We will send you a new supply of
applications soon.
Below are the major provisions of the Act.
APRs
• APRs cannot be increased during the first 12 months of a new account
(unless the account goes 60 days delinquent).
• A promotional APR must last at least 6 months.
• Eliminates “two-cycle” or “double-cycle” interest calculation billing
method. Note: We discontinued this billing method in May 2009.
• Prohibits raising interest rates arbitrarily on existing balances except when:
a promotional rate is ending, the Prime Rate used to calculate the account
variable rate increases, or if the account goes 60 days delinquent.
• Bans universal default, in which cardholders' interest rates are raised
because of their ratings with other creditors.
Fees
• Prohibits overlimit fees unless consumer opts-in to allow transactions to go
through instead of being declined. Note: We have discontinued overlimit
fees and accounts will not be allowed to go overlimit. We are not contacting
cardholders to opt-in.
Grace Period/Payment
• Statements must be sent out no later than 21 days before the due date.
Note: We made this change in May 2009.
• Payments must be credited as “on time” if the payment is received by
5 p.m. on the due date or delivered in person to any branch of the issuer
during open hours.
• The payment due date must be the same date each month. If the due date
falls on a Saturday, Sunday or legal banking holiday, then payments
processed the next day cannot be considered late.
(continued on back)
800-327-3483
Grace Period/Payment (continued from front)
• Any funds in excess of the minimum required payment will be applied to the debt
with the highest APR first.
Change Notification
• Requires 45-day advance notice of any significant changes in credit card terms,
including changes to APR or fees. Note: If the cardholder does not accept the
new terms, they can keep the existing terms, but the account is closed to new
purchases.
Terms
• Issuer cannot open a new account or increase a credit line without considering the
consumer’s ability to repay the account.
• New information is displayed on the statement letting cardholders know how long
it will take to pay off a credit card balance if only minimum payments are made
each month.
• Statement will also display the total cost in interest and principal if only minimum
payments are made each month.
• Requires the public posting of the issuer’s credit card agreement.
• New layout for disclosure of account pricing on applications and other documents.
• Affinity contracts and program details with colleges and universities must be sent
to the Federal Reserve Board for review.
Protection of Young Consumers
• Credit cards cannot be issued to people under the age of 21 unless they have an
adult co-signer or show proof of reasonable means to repay the debt.
• If there is a co-signer, the credit line cannot be increased without their prior
approval.
• People under the age of 21 will now be protected from pre-screened credit
card offers unless they specifically opt-in for offers. Note: We do not mail
pre-screened offers to students.
• Issuers cannot offer any tangible item to induce a college student to apply for a
credit card.
Additional provisions involving reasonable fees and gift cards will go into effect in August
2010. More information will be provided when these provisions go into effect.

people who carry that much debt on cc's drive me crazy. I had family members start a business using their cc's a few years back, because they could not get a small business loan. any guesses on what happened??

I think this is the best thing this administration has done to date. I'm all for it.

this specifically...

• The payment due date must be the same date each month.

...has burned us once. We schedule our payments online thru our bank. and typically scheduled to pay them earlier than due date (and for an amount much higher than minimum pmt). and because they have a shorter cycle, eventually our scheduled payment fell after their due date. what an effing scam. yes, partly our fault... but i'm gonna guess that they knew this was gonna happen to a lot of people.

I also particularly like this one....

• Issuer cannot open a new account or increase a credit line without considering the
consumer’s ability to repay the account.

no friggin' duh? (e.g. 40-60k limits on $45k/yr income... no offense)