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May 30, 2009Senator Evan Bayh made a stop in Fort Wayne last Wednesday to hold a dialog regarding the recently passed credit card bill and what it will mean for consumers. One of the hottest topics was the credit card industry’s assertion that responsible credit cardholders will be the ones getting penalized because of the practices of bad credit cardholders once the bill becomes active.
According to Sen. Bayh, the regulations included in the credit card bill are specifically designed to protect and help out credit cardholders who have been hit by high interest rates and fees because they have had to rely more on their credit cards when the economic crisis hit. The senator told reporters stories about people who saw such incredible interest rate hikes, some from 0% to 29%, just for missing the payment deadline by one day. Many of those experiencing such high interest rate hikes belong to the middle class and, according to Sen. Bayh, they were “getting ripped off by credit card companies”.
With the new law in place, credit cardholders who regularly pay off their credit card bills will be protected from interest rate hikes. Credit cardholders will also have more time to examine their bills, as credit card companies will have to mail the bills 21 days before they become due. In the past, the ruling was 14 days. Notifications regarding interest rate and fee changes will also have to be given to credit cardholders 45 days before they are to take effect.
The legislation will obviously provide protection to credit cardholders who are having problems with their bill payments and are keeping their credit cards active by paying only the minimum amount due. In the past few years, credit card companies have been making a lot of money off these kinds of customers – customers who do not default but who try to keep their credit cards active by paying the minimum amount, which does not really subtract substantially from their debts. This is going to end when the credit card bill becomes active.
Critics are therefore saying that because of the large loss in profits from bad credit cardholders, credit card companies are going to turn to good credit cardholders to make up.
“That is not going to be allowed to happen,” Sen. Bayh said.
He cautioned the credit industry from punishing good credit cardholders and said that should it happen, Congress will probably revisit the law to penalize such practices. He also said that the situation is not likely to become reality. Since the credit card industry is very competitive, a credit card company that penalizes good credit cardholders will probably lose their customers to another credit card company with a better offer.
Discover Bank is now issuing prepaid credit cards for the teenage set, with the proper parental control locked in. This practical approach of Discover is being received warmly by parents who understand the convenience of credit cards for teenagers but who also are wary of the financial responsibilities that it carries. With prepaid credit cards, parents get the best of both worlds.
According to industry experts, credit card debt is one of the leading financial problems that many Americans are facing today. The economic crisis that began last year has resulted in massive unemployment, rising interest rates and an ongoing economic instability which the U.S. government is still trying to contain. All of these things mean only one thing to the common American, they are now struggling to make ends meet and every “cash drain” has to be plugged. One of the biggest drain that most Americans have to deal with is credit card debt.
Like any problem, to begin fixing your credit card debt problem, you first need to determine how big the problem is. Unfortunately, some people are not very clear about the details of their credit card debt. Understandably, some people find rummaging through all the fine print and the mathematical confusion that credit card bills carry to be too daunting. However, you will never truly understand why your monthly payments are as high as they are unless you understand the details of your credit card.
According to industry insiders, the average American family owns at least one credit card. Credit cards are very convenient when it comes to payment. They can even be lifesavers in situations where there is no cash immediately available. However, credit cards can be deceptively convenient when it comes to purchases. So much so that most credit card owners find themselves surprised by the amount that they have to pay after they’ve gone through a spending spree.
The bill aims to limit fees and rate hikes of credit cards in an effort to protect debt laden consumers. The bill was first pushed and approved in the House of Representatives at the end of last month. Support for the bill in the House of Representatives was impressive, passing with a vote of 357 to 70. Furthermore, the bill also seems to have the support of President Obama who expects to sign the bill into law by the end of May.
It’s difficult to track exactly how many debt collection cases for defaulted credit card debt are filed because they are filed along with all civil cases through the prothonotary’s office. Capital One, a credit card company known for lending money to individuals with less than perfect credit histories, have filed a large number of cases. In Lancaster, Pennsylvania, of 255 cases filed during the first three weeks of April, Capital One filed 45% of them (a total of 114). Neither the attorney representing most Capital One lawsuits in court, Paul Klemm, nor Capital One representatives returned phone calls from reporters regarding this issue.
he could pay for the meal (in cash), he discovered that he had forgotten his wallet at home. He called his wife to bring him some money – and suddenly a new idea was born. A credit card that could be used at multiple locations and not require someone to have cash on them. Previously, retailers had their own credit cards and made money out of the loyalty of the cardholders, since the cards could only be used at their locations.
alongside technology and suddenly identity theft can involve a stolen Social Security number used for filing false medical claims or applying for mortgages. When you swipe your card at the ATM, gas pump, or in the RedBox for your next video rental, how do you know there isn’t a fake front added to the swiper – capturing your credit card number and pin?
interest rates higher than they are currently and decrease available credit across the board. It is painfully clear that consumers and their financial well being is not a point of concern for banks. That realization on it’s own is enough to anger Americans who have lost jobs, homes and their life savings in the last year. Now when you remember that many big banks have received bailout money to support their business, it is almost unbelievable the lengths they are willing to go to avoid regulation. While bank executives and government officials argue over unfair practices consumers remain at the mercy of the credit card giants. To offer consumers some level of protection, Senate Chris Dodd and Senator Chuck Schumer have proposed an immediate credit card rate freeze. The House of Representatives is also considering legislation (Credit Cardholders’ Bill of Rights Act) which also contains provisions which prohibit credit card practices that punish responsibly customers.
card issuers including American Express Co. and Bank of America Corp. to review credit-card policies for fees and interest rate limits, the Canadian government Prime Minister Stephen Harper is responding to consumer groups and lawmakers who insist the banks should have lower rates, and more information for consumers for understanding how the credit cards work. Namely, consumers should know clearly what their interest rates are, and not be faced with interest rate increases for unknown reasons.
surprised to learn what they fear most. Beyond the concerns of war, acts of terrorism, and health crisis on the rise, it a legitimate fear of credit card fraud. Research conducted in early 2009 indicates that as many as 68% of the 1,000 respondents surveyed have a greater fear of being the victim of credit card fraud and having someone access their credit or financial information than of any other problem currently spotlighted in the world today.
there was nothing they could do to help!” William Brewer of Oklahoma says.
