A long overdue bill regarding credit card fees was passed on Tuesday by the Senate and is expected to be signed by President Obama.
Here are some of the bill's key provisions:
- Starting in 2010 charging consumers who pay by phone would be banned.
- Sudden surges in interest rates would also be banned.
- For consumers, it would clarify the cost of big ticket items by forcing consumers to recognize how much they are paying in interest.
- Card companies would also have to provide information on consumer counseling and debt management.
- Consumers would not face retroactive interest rate increases unless payments are 60 days overdue.
- Even after 60 days, the consumer can get his old rate back by making on time payments for six months.
- Double cycle billing is also banned. Under the present rules consumers who are late can be assessed interest on a prior month's balance.
- Issuers must send bills 21 days before the due date and provide 45 days notice before changing the terms on a card.
- The new rules still allow card companies to raise interest rates on consumer's future charges.
While the bill is helpful, it failed to attack the main problem -- interest rate charges. Lobbyists must have leaned on Senate members because a provision to limit interest rates to 15% failed to gain support.
So, where are we? Yes, the changes are helpful but they did not get at the heart of the problem -- the interest rate charges. Sad to say that banks still have an open ticket to charge whatever interest rated they choose.
Do you think banks will raise credit card interest rates before the 2010 deadline?
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Reader Comments (Page 1 of 1)
5-20-2009 @ 8:03PM
clikdawg said...
Well, there's some of your "meaningful" financial legislation -- and what it means is that the Gummint intends to extend every courtesy imaginable to the loan sharks: If the now-banned practices are so egregious as to need banning at all, the only reason to delay banning them until 2010 is to give ample time for other egregious practices to be initiated to take their place ... at which point the whole charade can begin anew (Unless you figure in a possible bail-out of the CC Industry -- the legislation is then necessary to make it appear that Congress is "cracking down" in advance of givin' up the booty).
Face it: All the current generation of financier/governists know how to run are shell games and ponzi schemes. Assume any announcement, initiative, or legislation involves one of the two and you can't go far wrong ...
5-20-2009 @ 11:42PM
Iridium said...
This bill is a phony piece of garbage made to give Obama a nice TV moment.
"I'm for all of you Americans struggling everyday. I say to congress, pass a comprehensive credit card bill by the end of the month."
What a frickin joke. This bill doesn't have a single pro consumer detail. The closest thing would be a lock of current interest rates on old balances.
Everything else is still allowed. Raising rates for no reason, jacking up fees, creating adjustable interest rates.
Way to go congress, you should have just stayed at home. The little people will cheer though. Thier hero Obama will get on TV saying, "I did what I set out to do. I have stopped the egregious practices of the credit card companies. I have fought and won a victory for you."
The dogs will eat it up. The sad truth is America is too dumb of a country to realize what is being taken away every day Obama is in office. In 5 months he has proven himself to be the worst president in history. A president so damaging that it will take decades to undo what he and his allies have done.