Credit reform means new era for college students

Rebecca,

While I completely agree that carrying guns in National Parks shouldn't have been part of this bill, I am however extremely glad that they will again allow guns in the National Park. Where I live I am almost completely surrounded by a National Park. I spend much time in the mountains, and used to carry a pistol. There are lots of bears, and mountain lions in the areas that I typically hike and fish. Plus I don't like being in the middle of nowhere, and running across other people that may be armed, when I am not...

I agree, unrelated amendments always piss me off. Make it a standalone bill or stfu please.

We've been discussing this silly amendment here. The discussion has been....informative.

yeah kinda crazy.. we instantly bailed out thse companies.
we gave citigroup more money than it would have cost to buy them outright.. all mostly instant..
yeah the credit card rules ahve to be slowly implimented over years?
I dont get it.
basically it is saying.. your screwing people, you have become dependant on screwing people, you have a coupel years to wean you off of screwing people.

can you imagine we did this with mass murderes.. yeah next year you can only kill 10 and the year after 8

It also wouldn't prevent lenders from finding new ways to drain customers' bank accounts or keep consumers from spending money they don't have

This makes perfect sense. How do you stop people from spending money they don't have? There should be some personal accountability on the part of the consumer in acknowledging that credit cards are not the equivalant of free money.

The best way to prevent cc lenders from draining your bank account with extra charges is to either not use your credit card, use it only in cases of emergency, or to spend only what you can afford and pay it off every month. This is simple.

The change to the overlimit fee system makes sense since even the most fiscally responsible consumer could theoretically have their limit lowered and they over-spend without their knowledge; but protections for people who egregiously abuse the credit system are unnecessary.

I agree that it's unfortunate that the legislation did not cap interest rates, but if you practice fiscal responsibility, you don't need to worry about interest rates.

While this bill does do some nice things the elimination of interest rate caps in the final version really grinds my gears. Hardly surprising, given the stranglehold the finance industry has over many in Congress, but it still sucks.

but if you practice fiscal responsibility, you don't need to worry about interest rates.

not true.. ask your family and friends.. guarentee you will find someone whoes interest rates went up even thouigh they have never missed a bill, simply cause under the new system they have "too much credit"

There should be some personal accountability on the part of the consumer in acknowledging that credit cards are not the equivalant of free money.

thats why they like to target minorities as they first start college.

minorities cause theyare more likely to be poor and have a hard time paying their monthly bill.. you do know credit card compnaies love the poeple who cant pay the most.. they make the lion share of their money from fees?
last on a dollar and they cahrge you $50 for beign late.. all free gratis and didnt even have to laon you anything to add it to your bill.
yeah they are soo concerned with making sure people are responcible that they give yopu checks with your credit card to pay you bills with,
mean while th gop does everything in it's power to keep thye public as uneducated as possible.

yeah Just be respincible you remember how it was in college..and the reasopn teh drinking age is 21? isnt cause kids cant be responciblle and make responcible decisions about something like drinking right?

the credit crisis has nothiogn to do with the poor.. they dont have enough credit to be a problem.

I seem to remember this package of reforms being sold as a package to help those who can least afford the added costs and high interest rates levied by the credit card issuers. It looks like those who can lest afford it have been overlooked again. Congress should be so proud of themselves. Give the bankers another bonus for their fine work of keeping the recession going. If you want change, you have to make changes.

JB: can you do me a favor and hit the spell check button before you hit the post button? While I agree with what you have to say most of the time the last half of the post above was almost unreadable. Thanks

I've had experience with a CC company charging me an over the limit fee because a fee they imposed on me put me over the limit. Give me a break.

The other thing that is missing from this bill is a requirement that the companies set up the payment system so that if you pay the minimum due every month the balance will be paid off in a set amount of time, say 5 years. The way it is now if you pay the minimum the balance will never be paid off.

... but if you practice fiscal responsibility, you don't need to worry about interest rates.

So NOT true

From Frontline:

» Even if you make your credit card payments on time, the credit card bank can raise your interest rate automatically if you're late on payments elsewhere -- such as on another credit card or on a phone, car, or house payment -- or simply because the bank feels you have taken on too much debt. This practice is called the "universal default" clause and increasingly is becoming a standard clause in credit card agreements

That would be why Capital One just recently sent letters to the huge majority of their card-holders indicating their interest rates are going up in 2010. Even people I know who pay their full balance every month got one of these letters. Because of where we work (this particular person and I), we are able to run credit checks. Wow, if I only had her scores...

» There is no limit on the amount a credit card company can charge a cardholder for being even an hour late with a payment. In 1996, the U.S. Supreme Court in Smiley vs. Citibank lifted the existing restrictions on late penalty fees.

I know nothing about the particulars of this case and I don't feel like researching it, but in my eyes, this is another example of the goverment putting big business ahead of the consumer.

» It's important to read the fine print on your credit card agreement. Not many people do, however. Even credit card executives and consumer advocates admitted to FRONTLINE that the last time they read their own contracts was years ago and the credit card agreement is difficult to understand. Tucked into the fine print that people so often ignore is a clause that allows the company to change your interest rate (APR) at any time, for any reason, as long as they give you 15 days' notice.

CCBigWig: 'My husband forgot my birthday and so now I'm having a really bad day' CCBigWig: 'Just go raise someone's interest, it'll make you feel better'

» There is no federal limit on the interest rate a credit card company can charge. If you've ever looked at the return address on your statement, you may notice your credit card issuer is located in a state such as South Dakota or Delaware. That's because these are the states that have either weak or no "usury laws" meaning there is no cap on the interest rate that is charged.

I guess that's why those payday and car title loan places get away with charging the 300%+ interest rates. Can you say legal loansharking?

There's also a blurb in my profile about an incident with GE Money, who lowered my limit (despite my having paid more than the minimum on time (sometimes 2ce) a month) to a credit line BELOW my balance, then turned around and charged me an over the limit fee. Even if all the other 'unfair' (to put it lightly) practices of credit card companies are something I, as a consumer, should be responsible for understanding and avoiding to the best of my ability... that little practice was just down right dirty. But surprisingly, legal. I guess that's why the big banks consider the consumer to be peons; although maybe it would be more logical to call us @!$%#onz...

JoulesBeef,

I give your post 4.4 two thumbs up!

thats why they like to target minorities as they first start college.

They target all college students, regardless of race.

The Senate voted overwhelmingly on Tuesday to rein in credit card rate increases and excessive fees, hoping to give voters some breathing room amid a recession that has left hundreds of thousands of Americans jobless or facing foreclosure.

If Congress really wanted to help Americans, they would have capped max interest rates and made the bill kick in sooner.

but if you practice fiscal responsibility, you don't need to worry about interest rates.

not true.. ask your family and friends.. guarentee you will find someone whoes interest rates went up even thouigh they have never missed a bill, simply cause under the new system they have "too much credit"

There should be some personal accountability on the part of the consumer in acknowledging that credit cards are not the equivalant of free money.

thats why they like to target minorities as they first start college.

minorities cause theyare more likely to be poor and have a hard time paying their monthly bill.. you do know credit card compnaies love the poeple who cant pay the most.. they make the lion share of their money from fees?
last on a dollar and they cahrge you $50 for beign late.. all free gratis and didnt even have to laon you anything to add it to your bill.
yeah they are soo concerned with making sure people are responcible that they give yopu checks with your credit card to pay you bills with,
mean while th gop does everything in it's power to keep thye public as uneducated as possible.

yeah Just be respincible you remember how it was in college..and the reasopn teh drinking age is 21? isnt cause kids cant be responciblle and make responcible decisions about something like drinking right?

the credit crisis has nothiogn to do with the poor.. they dont have enough credit to be a problem.

Let me clarify. When I say fiscally responsible people don't worry about their interest rate, I'm referring to people who use their credit cards correctly- they pay them off every month. When I was in college I paid my credit cards off every month, I never spent more than I could afford to lay down cold hard cash for; and, these are the same principals I practice today. My interest rate could be 30%, which it isn't, but I wouldn't care because I only spend what I already have. Simple economics really; fiscally responsible people reap all the benefits of the system- reward points, gift certificates, cash back- without the negatives of late payments, over-limit payments, and interest.

I think you're trying to scapegoat the credit card companies when the real problem and responsibility lies in people believing that it's everyone else's fault when they do something stupid. Take responsibility for your actions, use your brain, and then maybe credit card companies, or anyone else, won't be able to take advantage of you. When you use your credit card you enter into a contract to pay back that money at the interest rate they specify, which is why I agree with legislation that would not allow people to be charged increased/extra interest on old purchases for being late once, since that to me is a violation of the terms of your original agreement- I pay this much for this much borrowed. But, limiting the amount of interest and well-state, pre-stated fees, is IMO government hand-holding. We don't need any more hand-holding, we need to learn to stand up on our own two feet.

It's not a medium or long term loan, it's a month to month short term loan. I think this is part of the reason people get so confused then upset.

The bank isn't lending you say $1000 for 6 months they are lending it to you until the end of the billing cycle at which time it's due. They then will (usually) allow you to obtain a new loan until the next billing cycle (usually a month) for the new amount plus extra charges up to some risk imposed limit. When interest rates go up they aren't violating any loan agreement because the loan is only for the month in question.

Credit card accounts aren't indefinite period loans at a variable interest rate, they are short term loans that get rolled over. The rate from loan to loan can vary. If you think about it in this context it explains nearly every one of the 'bad' practices talked about. The lack of understanding on consumer's part (and lack of desire to educate on lender's part) leads to the conflict and abuse of the whole thing.

I totally agree, Apples and Kyle, that people need to be better informed about credit cards, how they work, and how to use them properly. But it's not that simple... when you have so many people who aren't finishing high school, they are not going to understand how to be financially responsible.

The other problem is that almost everything is moving online.. from buying airline tickets to paying your bills. If you don't have the plastic, you get charged even more fees. I mentioned above that there are more options available now, like prepaid credit cards, but they also have high fees. And if you buy a Visa gift card to use online you are not working towards improving your credit score.

many many people have had their rates risen or credit cut.. and havent been late on a payment for over 2 decades.

about 10 years ago my wife and I had a semi-big purchase to make. We had some of the money necessary to make the purchase, but not all of it. Stupidly enough (we were late 20s at the time), we thought a 1.0% annual introductory rate on a card was a better idea than a 6.5 or 7% home equity loan (or waiting another year on the purchase). We were confident we could pay off the balance in less than a year, so we opted for the card.

After 3 months of paying the balance off at $800-$1100 / month, our rate was raised to 33.99%. We called and the company said they did an inquiry to our credit and reassessed our rate. So we did some checking - there was no negative activity. In fact, aside from that and our car loan (both in good standing) there was no activity at all. So we called back. We got the same excuse again.

So we went to see a credit counselor and found out something very interesting: when the banks extend this money, they assume you're going to pay it off at the minimum due every month. And they build a revenue table for every cardholder. Those who fail to make payments suffer the harsh consequences - however, those that show over-diligence in paying off the balance are knocked as well. And if they risk losing the expected revenue one way, they'll get it another - namely raising your rates and stonewall your efforts to fight it.

It was a pain in the ass - but we ended up getting a line of credit for like $3500 (if I remember) for the balance and closing the card. That experience calloused me to the banks indefinitely.

They're the scourge of the earth. Unfortunately, Americans have grown complacent and stupid enough to depend on them. And now we have to resort to the largest body of imbiciles in this entire country to "rescue" us from the dreaded bank. The whole thing kinda makes me sick.

We never carry a balance on our cards but, one time the mail was late getting our bill to us and we had to pay the $39. fee.

I called the day I received the bill and told them that I just received it and was more or less told, too bad, so sad, you have to pay the fee, we aren't responsible for the post office. Paying it on line wouldn't have helped either. Didn't matter that we were never late or ever carried a balance on the card.

I paid the freaking $39. and promptly canceled the card. They tried to get me back but too bad, so sad for them.

I think with the way this seems to be working out, our credits cards are all going to get canceled and it will be nothing but checks or cash for us from now on.

For example, the Senate bill requires those under 21 who seek a credit card to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default........ Amazing.. you need parental approval for a credit card, but in our country it's not required for an abortion!!!!

... Amazing.. you need parental approval for a credit card, but in our country it's not required for an abortion!!!!

Oh hush, up. You can make that argument for anything.

Amazingly you need parental consent for a credit card, but not to serve and die in the military.

Amazingly, you need parental consent for a credit card, but not to run over someone with your car on your 18th birthday.

Amazingly, you need parental approval for a credit card, but at 18 you can be given the death penalty....

Go to the appropriate forum to voice your bigoted, anti-women views you troll.

Apples... Don't even begin to talk to me about serving and dying in the military, I'm a disabled veteran of the Vietnam War. I know what dying is about, and more importantly because of that experience the value of life.

The only way the minority party can get their pet projects passed - As they say, "timing is everything."

CONGRESS IS waterboarding the American people...This is Soo weak ---they caved to the Banks again......Call them and tell them to focus on what the PEOPLE WANT --Not on their lobbyist buddies!!!!!.800.828.0498

Lobbying is now completely out of control with Corporate America and lobbyists owning Congress. There are now 40,000 registered lobbyists in Washington with bags of money making whores of our legislatures. We should eliminate corporate lobbying except by real persons (as opposed to entities like corporations and governments). As long as we continue to accept 'corporate personhood' as a valid declaration, there is no recourse. It gives Wal-Mart, AT&T, GM, etc. the same rights as actual living, breathing human beings - all the privileges of citizenship without any of the responsibilities or consequences for their failure to act responsibly.

The federal government/bureaucrats are beholden to the lobbyists in Washington who are paid by foreign governments and local and foreign corporations and any other freeloading organization with an agenda not remotely aligned and often at odds with the taxpaying US public. And do you know who benefits from the corporate lobbyists? One would think the stakeholders but that’s not the case. Its top management. And that's a whole other issue.

"There are now 40,000 registered lobbyists in Washington with bags of money making whores of our legislatures. "

As if that were not enough of a disadvantage for John Q. Public, a signifigant number of lobbyists are former congressional representatives, senators, or the staff of same. It does help to have an inside track when you're already on the inside. Try as you might, this is one monster that you can't wish away. To overturn this practice, people will need to organize petition drives, referendums, and perhaps a constitutrional amendment. To begin with you might try to find one senator to support it. lol. Remember when Al Gore needed just one senate vote to prevent the coronation of George W.? : )

Bile and spite. What else? Unless mebbe he's on the take?

NAAAAH!

I'll go take a look brb