Alpha Consumer

Today, Credit Card Reform Begins

By Kimberly Palmer

Posted: August 20, 2009

Starting today, credit card companies are required to begin doing business a little differently: First, they must inform their customers at least 45 days in advance of any interest rate hikes, compared to the previous 15-day requirement. If a customer doesn't like the change, then he can close the account and pay off his balance at the original rate. Secondly, credit card companies are now required to mail out bills to customers three weeks before the money is due, rather than two weeks.

These requirements are just the beginning of the more sweeping changes that will go into effect in 2010 as part of the credit card bill passed earlier this year. The law limits the circumstances under which credit card companies can raise rates, requires card companies to pay off customers' higher-interest debt first, and makes a slew of other changes, as well.

While consumer advocates have welcomed the reforms, the banking industry has warned that they will force credit card companies to raise interest rates and fees in advance of the law's implementation, and in fact, there is some evidence that has already happened. (See: "Credit Card Bill Already Affects Consumers.")

For the roughly 50 percent of consumers who pay off their balance each month, most of these changes don't much matter. They aren't affected by interest rate hikes and for the most part, they avoid fees. The reforms are really designed to protect consumers who are struggling to pay off their debts and, until now, have been at the mercy of lenders who could choose to raise rates and other fees at their discretion.

For a complete overview of the changes the credit card legislation will bring, read: "Credit Card Bill Poised for Passage."

Have the reforms started affecting you already? Do you welcome today's changes, or are you worried about the rate and fee hikes taking place in advance of the full implementation of the bill?

Financial institutions are the mob

When did financial institutions tell government what can and can not be done? Isn't the government supposed to function as an extension of the masses and not the highest bidder? What a shame. 

The financial companies have replaced the mobsters of yesterday. The Feds and IRS brought down the mobs that terrorized the masses, now they need to hunt down the ringleaders of the financial companies. The ringleaders need to be audited as individuals and monitored for illegal activity and then brought down hard to set an example for anyone else who wants to behave in a similar manner. 

What is the weapon of choice? Credit reports. Let's make the masses think that credit reports are more important than customer loyalty, employment history and stable payments. What?!!! The worst part is that we bought into it out of fear!!! Sound like a weapon, huh?

Who created credit reporting companies anyway? They are not my friends. I consider them the weapons of the fin companies that I must handle with diplomatic coldness and cutting demands.   

Has anyone tried to correct the CRAs when they have wrong information? It's a full time job! I know cause I was unemployed and ended up spending at least 5hrs a day dealing with it for over 5 months!

When did I give them permission to collect my personal identity and my private financial history? When did say it was ok for them to profit off my personal and private data? I haven't received a check from them for all the money they made off of me. They sell it to companies that will take more data from me and give it to them and take my money too. 

Does anyone see what's up?

Consumer/American/angry of NV @ Nov 11, 2009 09:32:07 AM

Concerned American wanting to take a stand

I do not run a giant corporation as do the credit card corporations, however if I ran my business by scalping my customers by raising my prices whenever I deemed it necessary like the credit card companies do to their customers when they jack up their interest's rates then I would soon work myself out of business and would loose all my customers to other companies that are more forgiving and loayal to their customers.

It seems to me that when economic times get tougher it is then that larger corporations need to get tougher within the boundaries of their own business and not keep trying to carry on business as usual by demanding that their customers come up with the extra capital needed to cover their losses. We as businesses that sale our services or supplies (whether large or small businesses) need to show the same respect and consideration that is expected when purchasing services and/or supplies. Each and every business should look hard at the image they are portraying to their customers and the public. If we demand our customers to pay interest rates that are greater than the national interest rates on homes and mortgages then we should be ashamed of ourselves and be honest for we are no better than a LOAN SHARK! Shame on the Credit Card Companies who demand their customers to stay in-debted to them and do not work with their customers. Customers who have struggled through hard times and were forced to increase their credit card limits but have continued to pay their monthly bills and are now trying to pay down their debts. When a parent abuses and neglects their children and takes advantage of their children by working them into a poor state of health, do we not as a public demand that justice be served on that abusive parent? Then why shouldn't we as a public demand that the credit card companyies be held accountable for their dispicable business practices and unfair acts of against their customers?

Wake up America! We are the abused children and we are letting the credit card companies be the abusive parent! How much more credit card abuse can we take before we become sickened to the point of financial death? Pay off your cards and do not use them. Let's boycott credit cards and force them to respect us!

M. Scheppler of TX @ Sep 10, 2009 09:32:56 AM

Credit Card house cleaning

I recently got my free annual credit report and reviewed all of my open accounts. There were cards that I had not used in years. When I had received new cards from those same companies, I had never activated them yet there they were, still open.

As a result of the legislation, I've been getting a lot of small print disclaimers and change of terms from credit card companies. I get out my magnifying glass and any credit card company that tries to change my low-interest fixed rate account to a variable, I call and cancel that account. At this rate, perhaps the only credit card I will have is with my credit union who, at least, uses larger font and clearer terms.

Wise up credit card companies!

Kathryn of CA @ Sep 04, 2009 09:29:25 AM

Add Your Thoughts
About You

advertisement

Alpha Consumer

Alpha Consumer

Kimberly Palmer, senior editor for U.S. News & World Report, writes about how to save money, avoid scams, manage debt, and be a savvy shopper. Send your personal finance questions to her for expert money advice.


Alpha Consumer Podcast iTunes icon

advertisement

Best of Alpha Consumer

When Young People's High Hopes Create Despair

Twenty-somethings trying to replicate their parents' wealth get off track.

Life on $7 a Day

Buying in bulk and planning ahead are among the money-saving techniques.

Can You Afford a Baby?

If you're of a certain age and life stage, then you might be asking yourself: Should I have a baby? First, you may want to consider the costs.

advertisement

Subscribe

U.S. News Digital Weekly

A weekly insider's guide to politics and policy — in a multimedia, digital format. 52 issues for $19.95!

U.S. News & World Report

6 months of U.S. News & World Report's print edition for only $15. Save up to 67% off the cover price!