New CC reform in effect! Is it going to really help?

[dscurlock]

Do you think this new reform is really going to help? or just
delay on whats going to happen in the future...?

What is the big deal on being notifed of a rate hike
before it goes into place? regardless of notice, it
will still go into effect, so the only difference is,
your just getting a notice telling you its going
into effect...

nothing has really changed..in my opinion this
is just called the delay reform..fees have not
been lowered, you will now have inactivity fees..

one way or another, I am sure these big cc firms
have probably already found work-arounds to
to this new delay reform...

regardless, in the end, you will still get hit with something...

[ForumReader]

Do you think this new reform is really going to help? or just
delay on whats going to happen in the future...?

What is the big deal on being notifed of a rate hike
before it goes into place? regardless of notice, it
will still go into effect, so the only difference is,
your just getting a notice telling you its going
into effect...

nothing has really changed..in my opinion this
is just called the delay reform..fees have not
been lowered, you will now have inactivity fees..

one way or another, I am sure these big cc firms
have probably already found work-arounds to
to this new delay reform...

regardless, in the end, you will still get hit with something...

Yep, I am certain of that which is why it is important if one has credit cards is be very disclipined with how to use his/her credit cards, read cardholder agreements under a fine tooth-comb manner and use common sense when using credit cards, well same thing as being very discplined. Just a thought, these CC firms are run by humans just like anyone of us. It does irk me when greed plays a role by any firm, banks, credit card companies, you name it and oh yes...

Debt Settlement Companies

I despite these kind of companies like the plague even though they are run by humans

[dscurlock]

I would not be surprised if cc companies strike back with even
higher fees, as there is no limit on what they can set..its
ironic how things work out...laws are setup to help and
protect, but often can hurt also..new law arrives to help
consumers, but ends up hurting them in the long run...
there is nothing in this new law that would stop them
from raising their fees, and adding new ones...

[WhatMoney]

Originally Posted by dscurlock >
nothing has really changed..in my opinion this
is just called the delay reform..fees have not
been lowered, you will now have inactivity fees..

Have you even read all of the new changes effective today? At least five of the changes REDUCE or ELIMINATE fees that existed before the CARD Act. If this law was in effect five years ago, I would have never found this board. It was the very CC banking rules that are now illegal that pushed me over the edge.

While you can always complain about hypothetical "new fees" they may add to keep screwing the consumer, the fact is this new Act is a significant change that makes CC's fairer to the consumer. Why don't you address each of the new changes below, and tell us all why each of them is a waste of time?

If you don't like inactivity fees and annual fees, you do have a choice - switch to a card that does not have them. It's call competition. I dumped a CC card once when the bank started charging a $10/yr annual fee. They lost my business forever for a $10 fee.

Here are some of the CARD Act provisions effective Feb 22 and Aug 22, 2010:

Effective February 22, 2010:

* Credit card issuers will not be able to increase interest rates on existing credit card balances unless the borrower is at least 60 days late on the account. This will eliminate the retroactive rate increases and the universal default clause where credit card issuers would periodically review an account holder’s current credit standing to determine changes in terms and annual percentage rates.

* Credit card issuers will have to provide clear disclosure of account terms before a borrower opens an account. If the account provides a promotional interest rate period, the promotional interest rate will have to last a minimum of six months.

* Credit card issuers will not be able to raise interest rates on new credit card accounts during the first year the account is opened. This rule will not apply if the borrower falls 60 days late on a credit card payment.

* Credit card issuers will not be able to charge over-limit fees unless they obtain the account holder’s consent to accept and process over-limit transactions beforehand. If consent is obtained, the card issuer will not be able to charge more than one over-limit fee per billing cycle. Additionally, credit card issuers will not be able to charge an over-limit fee if interest charges or other fees are the sole reason for pushing the account holder over their limit.

* Credit card issuers will not be able to charge additional payment penalties for accepting payments by mail, phone, electronic transfer, or any other means, unless the payment is processed through an expedited service processor.

* Credit card issuers will face significant hurdles if they try to issue credit cards to consumers under age 21 without an “of-age” co-signer, unless they meet sufficient income requirements to independently repay the debt.

* If a due date falls on a weekend or holiday, the credit card issuer will not be able to penalize mailed payments that are received on the next business day. Payments received by 5 p.m. must be credited the same day.

* Double-cycle billing, a process where credit card issuers use the previous month’s balance to calculate interest charges for the current month, becomes illegal.

* Credit card issuers will be required to apply any payment above the minimum amount due to the highest interest balance first.

* Subprime or “fee harvester” credit cards will have fee limits. Fees on a credit card (other than late fees, over-limit fees, or insufficient funds charges) will not be able to exceed more than 25 percent of the credit limit when the account is opened.

* Credit card issuers will have to include a minimum payment disclosure that explains how long it will take to pay off the existing balance and the total cost in interest fees if the cardholder paid only the minimum amount due. Additionally, card issuers will have to provide minimum payment details and the total cost in interest to pay off the existing balance within 3 years (36 months).

* Card issuers will have to make account terms and cardholder agreements available to their cardholders on the Internet.

Effective August 22, 2010:

* If a borrower’s interest rate is increased due to being 60 days late on a credit card payment, the credit card issuer will have to revert back to the original rate after the borrower completes six months of on-time payments.

* New rules will limit fees on gift cards and stored value cards. All gift cards will require a minimum expiration clause of no less than five years. Inactivity fees on gift cards will be banned.

http://www.creditbloggers.com/2010/0...f-georgia.html

[flyinbroke]

Well, it is all too late for most of us. I think it is great, but not so much that they gave companies two years to "comply". Most of us got screwed long before today because they had a whole two years to do it. To me it is nothing more than political posturing at this stage...most of the cards that changed on me are shut down because of opt-outs, up to obscene rates, or cut to what I owe.

It may benefit those who get cards in the future...when and if they decide to start giving out credit en masse again. These changes should have been done two years ago. A lot of us would not be here today.

[frogger]

Here are some of the CARD Act provisions effective Feb 22 and Aug 22, 2010:

I agree that many of the new rules are great. The big down-side to the situation however is that the cc companies jacked most everyone last month before the new rules went into effect.

Interest rate hikes galore....

[dscurlock]

I am not saying that every reform rule is bad.. I am saying to most, this
reform maybe useless...and is mainly a delay tactic for the consumer...the
consumer is just delaying what is already going to happen in the future...
Even the news stated this earlier...the cc compaines will find other ways
to nail the consumer...they are just not going to lay down and die just
because of a reform...I bet you they are working late to find out what
they can do to take more of your money in other ways....

The moral to this story is...when you push huge compaines, they
tend to push back in other ways...where there is an action, then
normally there is a re-action of some sort, and I am sure it will
not be good to say the least...

[dscurlock]

I agree that many of the new rules are great. The big down-side to the situation however is that the cc companies jacked most everyone last month before the new rules went into effect.

Interest rate hikes galore....

I am looking at a new statement as I write...

New Late Payment Warning: If we do not receive your min
payment by the due date, your late fee will be $40.00

thats just BS!

praise our gov't for this new reform...

of course they are not to blame...nobody is...

What does reform mean? new taxes!

[banca rotta]

The bigger picture in my opinion is the economy. Since this false economy we have had for 25 to 30 years has been pretty dependent on loose credit what does the future hold? 70% of the economy is based on consumer spending and most of that has been with credit.

No more CC usage, no more using the home as an ATM, no pay increases, high unemployment that 70% number is going to fall very rapidly as it's been happening under our noses.

Don't get me wrong I agree with moving away from the credit based consumer economy, but all at once? All I can say is hold on!!!! The roller coaster is at the top about to head down.

[BobMango]

While this "reform" may be good in certain areas, we are all going to get a lesson about unintended consequences. This legislation does not cap rates or fees. It simply provides some limits on how quickly they can be jacked. It does get rid of "2-cycle billing" and universal default, but I guarantee it will cost all of us more in the long run, even those that don't use credit cards.

Since our clown congress is owned by the lobbyists you can bet that they (the lobbyists) wrote this legislation and put in enough loop holes to ensure that their profits would not be impacted. Buckle up boys and girls!

[dscurlock]

The bigger picture in my opinion is the economy. Since this false economy we have had for 25 to 30 years has been pretty dependent on loose credit what does the future hold? 70% of the economy is based on consumer spending and most of that has been with credit.

No more CC usage, no more using the home as an ATM, no pay increases, high unemployment that 70% number is going to fall very rapidly as it's been happening under our noses.

Don't get me wrong I agree with moving away from the credit based consumer economy, but all at once? All I can say is hold on!!!! The roller coaster is at the top about to head down.

its up to the consumer also...some (like me) are savers...some
are spenders..and they just do not stop there...they spend, spend
and spend...and after it is gone, they continue to spend, so they
live for the moment, not the future...much less retirement...if I
did not place limits on my wife, we would have no money...she
wants to live for the now...even in good times, it is still hard to
save money...

I would rather not have to give my soul to credit cards
as a must to live. It is just a temp solution that will
come to an end when there is no more credit to buy food, then
you file BK and blame credit cards, it was their fault...

Its everyones fault...

PS. maybe it was for the best that one of my creditors cut my
limit by $1000 - it was probably the best favor anyone has done
for me...did it hurt them by doing this? sure it did, as they
will no longer earn any type of interest on that money they cut.

[WhatMoney]

I am looking at a new statement as I write...

New Late Payment Warning: If we do not receive your min
payment by the due date, your late fee will be $40.00

thats just BS!

praise our gov't for this new reform...
of course they are not to blame...nobody is...
What does reform mean? new taxes!

My late fee the first time I was ever late on a credit card payment (in 30 years of using them), in 2005, from Chase, was $39. So I wouldn't get too upset that your late fee is only $40, five years later. Chase "only" charged $35 for the over the limit fee, which they also added because the $39 late fee pushed me $2 over my credit limit. This was five years ago! I don't see where it's any worse now - and they can't play the overlimit fee game with the new rules.

Congress took it's time correcting the abuses, but in the end you can thank the government for the "reforms". The CC companies sure didn't do this on their own - regulation is how you prevent abuses. Too bad past administrations forgot that lesson.

I think the tightening of credit card standards is just what this country needs. And the ones who can't pay on time should get hit with the higher fees and interest rates on future purchases for 6 months. Seems fair enough. Or you can just declare BK and live on cash - that works too.

[frogger]

My late fee the first time I was ever late on a credit card payment (in 30 years of using them), in 2005, from Chase, was $39.

Right. They "jacked" your late fee up by $1.00. If you're paying late fees, that should be the least of your worries.

So I wouldn't get too upset that your late fee is only $40, five years later. Chase "only" charged $35 for the over the limit fee, which they also added because the $39 late fee pushed me $2 over my credit limit. This was five years ago! I don't see where it's any worse now - and they can't play the overlimit fee game with the new rules.

And the overlimit fee games have been a game that the consumer ALWAYS lost.

I think the tightening of credit card standards is just what this country needs. And the ones who can't pay on time should get hit with the higher fees and interest rates on future purchases for 6 months. Seems fair enough. Or you can just declare BK and live on cash - that works too.

This is the best of all statements made in this thead. Unless a person can afford it, they shouldn't have a credit card at all. It was not many years ago that a credit card was a luxury that was reserved for the "rich". Now, anyone can get one, even my dog. There has basically been no requirements needed to obtain a card, it was just a way to make a person into an indentured servant.

Goodbye credit cards. I don't need you, and most of the public doesn't need or deserve you either....

[forgotten]

t

I am looking at a new statement as I write...

New Late Payment Warning: If we do not receive your min
payment by the due date, your late fee will be $40.00

thats just BS!

praise our gov't for this new reform...

of course they are not to blame...nobody is...

What does reform mean? new taxes!

And that $40 is DIRT CHEAP compared to what the penalties were before.

Lets say your late fee use to $29 - heck, lets say there wasn't one at all. You were 1 day late and your APR would raise to the default APR.

If you owed $20,000 and had a good interest rate of say 9%, your interest rate is now 30%... So instead of interest of $150 it is $500 a month. That was a $350 late fee EVERY MONTH FOREVER instead of a one time $40 fee.

Now you have to be 60 days late to have your current rate raised.

Real life example... I owed Amex $50k @ 3.9% APR, my interest was $162/mo and my payment was about $650/mo. Well, some things got screwed up on my end and my payment was 2 days late, which threw my account in to default. My monthly interest was now $1250/mo and my payment about $1750/mo! They said they would considering lowering it back after 12 months of on time payments.... So.... total late fee: $13,056!

[UNDERMICH]

One key is that credit cards have no limit on what interest they can charge YOU. Any defualt that happens it will now be delayed, but watch what interest rate will now be used. They will find tune their game .. they will not be making has much in the short term. If they do not they will have to layoff people... go figure.........