Senate passes credit card overhaul bill

[Jeff7181]

I can see it now...

Joe Blow: I want a credit card yo!
Bank: No, you're high risk and we can't make up for you potentially defaulting by charging other high risk people higher rates.
Joe Blow: That's not fair! I'm telling!
Government: Banks, you must extend credit to anyone that asks.
Bank: Here's your credit, Joe.

2 months later

Bank: Hi Joe, you owe $8,232 this month.
Joe Blow: Damn yo, I can't pay that!
Bank: Government, Joe and thousands more like him can't pay, we're going bankrupt. I can haz monies plz?

 

[feralkid]

Originally posted by: Mxylplyx
I agree completely with this bill, but will be sad if they reduce my benefits, as I am one of those industry deadbeats that uses my card for everything and pays it off every month, and enjoys a $500-600 check every year. AMEX is making a killing from me through merchant fees. If they try to take it away, I'll move to another card or cash if I have to. I'm really doubting that card companies are going to reducing benefits that much as many media outlets are now reporting. The days of extreme profits in the CC industry are now gone, and any attempts to hold on to them is just going to backfire and drive away business.

I sure agree with you there.

Earning a small, but solid percentage from each and every purchase we make should be a viable business plan, right?

 

[manlymatt83]

This is bullshit. As someone who has revolving debt which I'm paying off, I still pay my bill on time and think the companies are very fair to me. And I expect to get my rate increased if I pay late, and I also expect to get a fee if I go over the credit limit. The only thing I don't like is "random rate jacking" for no reason, but other than that, I think this is bullshit.

 

[jpeyton]

Originally posted by: Jeff7181
Bank: No, you're high risk and we can't make up for you potentially defaulting by charging other high risk people higher rates.

This legislation doesn't prevent banks from raising rates on people who default on their loans. What on earth are you babbling about?

Originally posted by: manlymatt83
This is bullshit. As someone who has revolving debt which I'm paying off, I still pay my bill on time and think the companies are very fair to me. And I expect to get my rate increased if I pay late, and I also expect to get a fee if I go over the credit limit. The only thing I don't like is "random rate jacking" for no reason, but other than that, I think this is bullshit.

You might want to jump off the bandwagon, since this legislation still allows banks to charge late fees, over-limit fees, and increase interest rates on people who default on their loans.

 

[LegendKiller]

Originally posted by: manlymatt83
This is bullshit. As someone who has revolving debt which I'm paying off, I still pay my bill on time and think the companies are very fair to me. And I expect to get my rate increased if I pay late, and I also expect to get a fee if I go over the credit limit. The only thing I don't like is "random rate jacking" for no reason, but other than that, I think this is bullshit.

As the poster above said, it doesn't prevent them from raising rates. It prevents hair-trigger defaults.

What other loan do you have where a "default" rate goes into effect in a 1-day delinquency? I know none. My student loans are 30+, mortgages are 30+, cars are 30+. Yet, somehow, these guys are able to get away with 1. Then, on top of that, they change the due date on a whim. Why? To make more people 1 day late.

They play a game, it's called "fuck the consumer as much as possible". They love it because they make shit-tons of money doing it.

What I just love about CC companies is that they have a completely open-ended contract on their side, one which they can manipulate at the drop of a hat. However, on the other side, they expect people to not manipulate that contract and even lobbied the government with billions of dollars to make that contract stronger on their side while making it weaker for the consumer.

I worked for a CC company in securitization, I funded the assholes. I quit at exactly 365 days after I started. Why? I was disgusted by their business practices.

 

[StageLeft]

There are three likely scenarios with this bill:

1) Through sly dealings or sleight of hand the CC companies ultimately find loopholes/make a mockery of the law and not much changes
2) CC companies take their lumps and see substantial revenue reductions/downsizing. It also becomes, for obvious reasons, much harder to get a CC or have much of a line unless your credit history is excellent
3) extension of 2, but at the same time they put more of a squeeze on those with good credit, so that everyone gets "screwed" if they're a customer

IMO I think 2 is great and there is a silver lining in 3. The country simply does rely on too much credit at the personal level and I believe people do themselves a disservice continually using credit cards for everything, even if they think they're doing well to save up airline points or buy an Ipod after spending $30,000 on their card. The thing is ridiculous. The more credit card lenders get hacked off at the knees and shrink, the better we all are for it. I would love to see them so raked over the coals that businesses start as a common thing giving us the discount if we pay with cash. That will truly be a broadside to CC companies then.

 

[StageLeft]

Originally posted by: Sacrilege
If you guys hate credit cards and banks so much, may I recommend:

payday loan providers
The Rush Card (TM)

http://www.washingtonpost.com/...?referrer=emailarticle">Read the article and weep about how The Man is keeping inner city poor from getting the supermarket bonus card.</a>

Link fixed

Outside the ACE check-cashing office on Georgia Avenue in Petworth, Harrison Blakeney, 67, explains a hard financial lesson of poverty. He uses the check-cashing store to pay his telephone bill. The store charges 10 percent to take Blakeney's money and send the payment to the phone company. That 10 percent becomes what it costs him to get his payment to the telephone company on time. Ten percent is more than the cost of a stamp. But, Blakeney says: "I don't have time to mail it. You come here and get it done. Then you don't get charged with the late fee."

Blakeney, a retired auto mechanic who now lives on a fixed income, says: "We could send the payment ahead of time but sometimes you don't have money ahead of time. That's why you pay extra money to get them to send it."

Blakeney, wearing a purple jacket, leans on his cane. He has no criticism for the check-cashing place. "That's how they make their money," he says. "I don't care about the charge."

Sigh.

 

[Jeff7181]

Originally posted by: jpeyton

Originally posted by: Jeff7181
Bank: No, you're high risk and we can't make up for you potentially defaulting by charging other high risk people higher rates.

This legislation doesn't prevent banks from raising rates on people who default on their loans. What on earth are you babbling about?

Originally posted by: manlymatt83
This is bullshit. As someone who has revolving debt which I'm paying off, I still pay my bill on time and think the companies are very fair to me. And I expect to get my rate increased if I pay late, and I also expect to get a fee if I go over the credit limit. The only thing I don't like is "random rate jacking" for no reason, but other than that, I think this is bullshit.

You might want to jump off the bandwagon, since this legislation still allows banks to charge late fees, over-limit fees, and increase interest rates on people who default on their loans.

It prevents banks from raising rates for a year. That's ridiculous. In 3 months I could destroy my credit and become high risk.

It also prevents banks from raising rates on existing balances that are past due by less than 60 days. Also ridiculous. If your payment is late, it's late. You signed a contract that says if your payment is late, your rate goes up and you pay penalties. Even still, if you call the bank and ask, they'll usually remove the late fees and sometimes even return your interest rate to what it was originally.

There's a couple good points, such as not allowing people under 21 to get a line of credit without a cosigner or proof they can afford the line of credit being extended to them.

There's also some useless things, such as requiring the bank to explain how long it will take to pay off the balance and how much interest will be applied if making only minimum payments.

Seriously? It's called personal responsibility. Read the terms before applying for a card and don't count on the bank holding your hand.

 

[RyanPaulShaffer]

I am neutral on this bill. On one hand, it's a nanny law because people are irresponsible and lazy and don't even bother trying to take responsibility for their own actions. On the other hand, credit card companies are pretty unscrupulous and will flaunt any tactic they can to make a quick buck.

My only worry is for those of us who are responsible and have good credit. I'm especially worried about the possibility of being charged interest immediately. I pay off my credit card on time each month...why should I be punished because other people are irresponsible?

Then again, this is modern America...where the responsible many suffer because of the irresponsible few...

 

[BoberFett]

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

 

[coloumb]

Hmm..I wonder if I should refuse to pay my credit card bills now?

 

[RyanPaulShaffer]

Originally posted by: BoberFett
If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient a**holes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

:laugh:

Gah, the forum ate my original response for some reason. Anyway, what I basically said was that I don't want to go back to using checks/check cards. There is too much benefit for being responsible with credit.

 

[RyanPaulShaffer]

Originally posted by: coloumb
Hmm..I wonder if I should refuse to pay my credit card bills now?

Unfortunately, if you've ever been responsible, it won't work. You only get a free ride if you are continually irresponsible and lazy.

:roll:

 

[StageLeft]

My only worry is for those of us who are responsible and have good credit. I'm especially worried about the possibility of being charged interest immediately. I pay off my credit card on time each month...why should I be punished because other people are irresponsible?

You won't be punished; you'll just stop using your card, right? That's what I've done. Free yourself from the plastic.

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

Use debit, I use it for all now.

There is too much benefit for being responsible with credit.

There really isn't, actually. The rewards you think you get you're paying for with elevated prices anyway. There is a little consumer protection here and there but living in a continual cycle of debt and credit is really a bit silly for something as simple as gasoline or a meal. Credit cards are a completely needless, in most cases, middle man. Those entire companies and their "services" are between you earning money and paying it to somebody giving you something you actually want, and you are paying for it

 

[RyanPaulShaffer]

Originally posted by: Skoorb

My only worry is for those of us who are responsible and have good credit. I'm especially worried about the possibility of being charged interest immediately. I pay off my credit card on time each month...why should I be punished because other people are irresponsible?

You won't be punished; you'll just stop using your card, right? That's what I've done. Free yourself from the plastic.

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

Use debit, I use it for all now.

There is too much benefit for being responsible with credit.

There really isn't, actually. The rewards you think you get you're paying for with elevated prices anyway. There is a little consumer protection here and there but living in a continual cycle of debt and credit is really a bit silly for something as simple as gasoline or a meal. Credit cards are a completely needless, in most cases, middle man. Those entire companies and their "services" are between you earning money and paying it to somebody giving you something you actually want, and you are paying for it

???

I pay my entire balance every month. I never pay a cent of interest because I don't carry any debt on credit cards.

I'm confused...did you read my post?

 

[Mursilis]

Originally posted by: RyanPaulShaffer

Originally posted by: Skoorb

My only worry is for those of us who are responsible and have good credit. I'm especially worried about the possibility of being charged interest immediately. I pay off my credit card on time each month...why should I be punished because other people are irresponsible?

You won't be punished; you'll just stop using your card, right? That's what I've done. Free yourself from the plastic.

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

Use debit, I use it for all now.

There is too much benefit for being responsible with credit.

There really isn't, actually. The rewards you think you get you're paying for with elevated prices anyway. There is a little consumer protection here and there but living in a continual cycle of debt and credit is really a bit silly for something as simple as gasoline or a meal. Credit cards are a completely needless, in most cases, middle man. Those entire companies and their "services" are between you earning money and paying it to somebody giving you something you actually want, and you are paying for it

???

I pay my entire balance every month. I never pay a cent of interest because I don't carry any debt on credit cards.

I'm confused...did you read my post?

I'm confused as well, because I'm like this poster - I don't pay interest or annual fees, and I enjoy the perks, which have totaled into the thousands for me over the years. I would really hate to stop using credit cards.

 

[spacejamz]

Originally posted by: Mursilis
I'm confused as well, because I'm like this poster - I don't pay interest or annual fees, and I enjoy the perks, which have totaled into the thousands for me over the years. I would really hate to stop using credit cards and subsidizing all of these bastards who cannot pay their bills.

Fixed...

 

[RyanPaulShaffer]

Originally posted by: spacejamz

Originally posted by: Mursilis
I'm confused as well, because I'm like this poster - I don't pay interest or annual fees, and I enjoy the perks, which have totaled into the thousands for me over the years. I would really hate to stop using credit cards and subsidizing all of these bastards who cannot pay their bills.

Fixed...

Uhhh...double WTF towards the "Fixed".

We don't pay fees or interest...how are we subsidizing people? The minute the card companies try to make us pay fees or interest that we shouldn't pay, we'll ditch them in a heartbeat.

Some of the posts in this thread seriously make me boggle.

 

[Special K]

Originally posted by: Skoorb

There is too much benefit for being responsible with credit.

There really isn't, actually. The rewards you think you get you're paying for with elevated prices anyway. There is a little consumer protection here and there but living in a continual cycle of debt and credit is really a bit silly for something as simple as gasoline or a meal. Credit cards are a completely needless, in most cases, middle man. Those entire companies and their "services" are between you earning money and paying it to somebody giving you something you actually want, and you are paying for it

The problem is you need to keep a relatively high limit of credit cards because they are factored heavily into your FICO score, which is used to set rates on insurance, mortgages, etc.

 

[BoberFett]

Originally posted by: Skoorb

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

Use debit, I use it for all now.

Negative. Debit cards are a good way to find yourself penniless while you try to convince your bank that those charges aren't yours.

 

[jpeyton]

Originally posted by: Special K

Originally posted by: Skoorb

There is too much benefit for being responsible with credit.

There really isn't, actually. The rewards you think you get you're paying for with elevated prices anyway. There is a little consumer protection here and there but living in a continual cycle of debt and credit is really a bit silly for something as simple as gasoline or a meal. Credit cards are a completely needless, in most cases, middle man. Those entire companies and their "services" are between you earning money and paying it to somebody giving you something you actually want, and you are paying for it

The problem is you need to keep a relatively high limit of credit cards because they are factored heavily into your FICO score, which is used to set rates on insurance, mortgages, etc.

Unfortunately you're somewhat correct, and FICO needs to be overhauled as well. It's nothing more than a debt score, and penalizes people who are completely free of debt and only spend what they earn. You could be a multi-millionaire who pays cash for everything, and have an average FICO score. You could have several credit cards with tiny balances that you pay off monthly and have an average FICO score.

To get a good FICO score, you need to consistently carry a arbitrary level of debt (not too high or low relative to your limits) over a period of time. It forces you to buy into the bullshit consumerism and overspending that plagues our society today.

 

[Carmen813]

Ah credit cards. I can't wait till I get a job that pays something decent so I can pay off those debts and be rid of the things forever.

 

[jpeyton]

Originally posted by: BoberFett

Originally posted by: Skoorb

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

Use debit, I use it for all now.

Negative. Debit cards are a good way to find yourself penniless while you try to convince your bank that those charges aren't yours.

You're half correct; running your debit purchases as debit transactions (with a PIN) isn't ideal.

You can run any debit purchase as credit (with a signature) and you're protected like any credit card.

 

[Special K]

Originally posted by: jpeyton

Originally posted by: Special K

Originally posted by: Skoorb

There is too much benefit for being responsible with credit.

There really isn't, actually. The rewards you think you get you're paying for with elevated prices anyway. There is a little consumer protection here and there but living in a continual cycle of debt and credit is really a bit silly for something as simple as gasoline or a meal. Credit cards are a completely needless, in most cases, middle man. Those entire companies and their "services" are between you earning money and paying it to somebody giving you something you actually want, and you are paying for it

The problem is you need to keep a relatively high limit of credit cards because they are factored heavily into your FICO score, which is used to set rates on insurance, mortgages, etc.

Unfortunately you're somewhat correct, and FICO needs to be overhauled as well. It's nothing more than a debt score, and penalizes people who are completely free of debt and only spend what they earn. You could be a multi-millionaire who pays cash for everything, and have an average FICO score. You could have several credit cards with tiny balances that you pay off monthly and have an average FICO score.

To get a good FICO score, you need to consistently carry a arbitrary level of debt (not too high or low relative to your limits) over a period of time. It forces you to buy into the bullshit consumerism and overspending that plagues our society today.

You don't need to revolve a credit card balance from month to month, if that's what you meant by "consistenly carry an arbitrary level of debt", but you are correct that a good "mix of debt" (i.e. several credit cards, a car loan, student loans, mortgage, etc.) is good for one's FICO score.

What I find more problematic is the impact of credit limits vs. credit utilization on FICO scores. Let's say I have a credit card with a $4k limit, and charge it up to $2k each month, but pay it off in full. I would technically be better off with a $16k credit limit and/or multiple credit cards since my % utilization would be lower.

I shouldn't have to open more credit cards than I need just for the sake of boosting my FICO score.

 

[Special K]

Originally posted by: jpeyton

Originally posted by: BoberFett

Originally posted by: Skoorb

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

Use debit, I use it for all now.

Negative. Debit cards are a good way to find yourself penniless while you try to convince your bank that those charges aren't yours.

You're half correct; running your debit purchases as debit transactions (with a PIN) isn't ideal.

You can run any debit purchase as credit (with a signature) and you're protected like any credit card.

Although debit cards with a VISA/MC logo afford consumers the same protection as a real CC, the problem is that the funds are immediately withdrawn from your bank account and are gone until you get everything sorted out with your bank. This can lead to overdraft and late fees for any bills that are normally paid out of your bank account.

At least with the CC, you never have to actually pay for any of the fradulent charges.