Of course, we'll all be a lot better off if we have no credit card debt, but for those who have struggled with it you'll probably be interested in the new credit card holder "bill of rights". Maybe I'm naive, but I'm surprised there were not even any informal rules or ethic governing credit card companies. It's too bad the government has to legislate this kind of thing. This is from an article written by money expert, Ron Lieber.
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First, let’s lay out the things we know will change because of the new legislation. The bill is chock-full of new rules, which will take effect at various points in the year after President Obama signs the final legislation.
¶There are new restrictions on when card companies can increase the interest rate on balances you’ve already run up. The bill says that banks generally must wait until you’re 60 days late in making the minimum payment before applying a penalty interest rate to your existing debt.
While an earlier bill in the House of Representatives suggested less strict rules, House members have agreed to adopt the Senate version and intend to vote on it on Wednesday. On Tuesday, senators voted 90-5 in favor of the measure.
¶Card companies will have to give 45 days’ notice before raising their interest rates. There’s also a notice requirement for any significant change to a card’s terms, which may keep companies from surprising customers who have been saving their loyalty points for years with huge alterations in rewards programs.
¶Banks must send out your bill no later than 21 days before the due date. They cannot send it with, say, 14 days to go, hoping that you won’t get a check to the bank in time to avoid a late fee.
¶If the card company gets your payment by 5 p.m. on the due date, it’s on time, according to the new rules. No more of this early morning deadline nonsense, which led to late fees for payments that arrived with the afternoon mail. Also, no more late fees if the due date is a Sunday or holiday and your payment doesn’t arrive until a day later.
¶Let’s say you’re paying different interest rates on the debt on a single card — one for a cash advance, another for a balance transfer and a third for new purchases. Now, when you make a payment over the minimum balance, banks will have to apply it to the highest-interest debt first. I bet you can guess how some banks used to handle this sort of situation.
¶Banks will need your permission before allowing you the “privilege” of spending more than your credit limit and paying a fat $39 fee for that privilege. The card companies should be ashamed that they needed a law to make this “opt in” requirement a reality.
¶If you’re a student, it will become harder to get a credit card. No one under 21 can have a card unless a parent, legal guardian or spouse is the primary cardholder. Students with their own income can submit proof and ask for an exception to the co-signer requirement.
The senators, in an apparent endorsement of helicopter parenting, also require written permission from the parent, guardian or spousal co-signer for any increase in a card’s credit line. You can read all the gory details through links to the Senate bill.
¶Hate gift cards? Me, too. There will be some helpful new rules regarding those absurd dormancy fees, which punish people who let the cards sit around before using them.
Under the Senate’s rule, retailers and others that issue Visa, MasterCard, American Express or Discover gift cards or certificates will have to print explicit dormancy fee information on the card. Sellers of the cards will also have to inform the buyer of the fee. That’s a smart twist, since the gift giver can then become aware of the noxious nature of the fee — and elect to give cash or some other gift.
The bill also bans expiration dates on gift cards and certificates any sooner than five years after the card’s original issue date. And the retailer or card issuer will have to print the terms of any expiration date in capital letters in at least 10-point type. Call it the fine print rule.
It will be fascinating to see which retailer or card issuer has the nerve, after having free use of your money for five years, to tell you it will lose the money altogether if you don’t use up their gift card. I dare them to try.
So will credit card companies kill reward programs or drastically scale most of them back? Of course not.
“If you strip away the reward component of a credit card, it’s essentially a commodity,” said Rick Ferguson, editorial director at the loyalty marketing company LoyaltyOne. “The reward is what gives it its personality. It works from a branding perspective as well as a mechanism to influence customer behavior and consolidate spending on a particular card.”
That last part is crucial. People who spend a ton generate fees galore from merchants, and that money helps the card company stay in business. So you may soon see card companies giving away more goodies or lowering annual fees for people who hit certain spending thresholds each year. American Express already does this on a number of cards.
Also, keep in mind that you may have more control over what the card companies do to you than you may think.
If you don’t like the new fees and other things that banks will soon be testing as they grapple with their new economic reality, then make some noise. Send a note to me at rlieber@nytimes.com, so I can write about the latest foolishness — or consumer-friendly twist. At the very least, all of our complaints to the higher-ups at the banks may help persuade the companies to head in another direction.
HISTORY
A Little History:
Our story begins in Pocatello, Idaho, circa 1972, when the lovely Debby Christensen agreed to a first, though fateful date with admirer, David Croshaw. Long story-short, he bade her follow him, and they went arm-in-arm to the Logan, Utah temple for establishment of an eternal family unit, Generation 1, on May 23 1973.
From their first blissful summer in Salt Lake City, educational pursuits took them to Provo/Orem, Utah, birthplace of Leslie and Rebecca, and to San Francisco/Oakland California, birthplace of Colin and Matt. Then, for establishment of livelihood, expansion of the tribe with Abby and Dana, and for raising/unifying of Generation 2, it was back to the roots in Pocatello for a rewarding sojourn.
In time, driven by a raging, but commonly shared sense of adventure and independence, one-by-one, Generation 2 escaped the homeland to distant regions of the country and the world, each ultimately developing their own tribal expansions by pairing with worthy mates and initiating Generation 3.
Now sensing fulfillment of their purpose in Pocatello, Generation 1 has also left those roots and transplanted to Cascade Idaho, from which base, they anticipate more abundant contact with The Posterity, Generations 2 and 3, in the future. That contact however, awaits fulfillment of a call to LDS missionary service in Vancouver, British Columbia, Canada, wherein they hope to help the state of the world by sharing the love of Jesus Christ.
So now, including Generation 0 (Grandma and Grandpa Christensen) home base includes Yuma, Arizona, Pocatello, Idaho, Cascade, Idaho, Vancouver, BC, Fort Lauderdale, Florida, Spokane, Washington, Boise, Idaho, Los Angeles, California, back to Boise, Idaho, and on and on (Generation 3+) to infinity.
Our Mission Statement:
This is the blog of our eternal family unit. Initiated years ago, it served well as a journal, but even more so, as an archive of our personal interaction. It was a gathering place, a confabulation instrument, a unifying force for four generations of widely dispersed and progressively prolific posterity, and their valued associates. Though it served these purposes well for many years, it eventually took a back seat to new-kids-on-the-block, Facebook, and Instagram, and was sadly forgotten.
We now move to resurrect this blog with an added functional purpose of archiving the missionary experiences of Generation 1, of their movements and activities as they participate with The Gathering of Israel in the land northward. In so doing, we hope that via their own comments and posts, this blog will again serve to gather and unify the posterity and their friends.
As in the past, that the young and vibrant may know the old and tired, that enduring bonds may be fostered and maintained, that experience and encouragement may be openly shared, that posterity may embrace truth, and that hearts may be knit together, we must resist detachment despite our geographic divergence. We shall do so here.
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17 comments:
What great information. Thanks for sharing, Les. I think we could all use a little more financial intelligence in our lives. :o)
Have any of you ever tried calling the company of a credit card you've had for a long time and asking if you qualify for a lower interest rate? I've gotten one of my cards down to HALF of what it once was, just because I do this every so often. (Although it shouldn't matter, because we're all paying off the balance every month anyway, right? Right?)
Okay, I know my view won't be very popular, but I just have to add my two cents. I myself have had problems with credit card debt, and I know just as well as anyone how evil and scheming credit card companies are. But, I am going to make this philosophical argument. I see this most recent move by congress as a symptom of the greater problem that is increasingly becoming the federal government. Is it the role and purpose of the federal government to protect us from ourselves? I feel that they are increasingly seeing that as their role. I feel like they don't think that the general American population is smart enough to deal with things like evil credit card companies on our own. I feel like they think we are a bunch of schmucks who are too dumb to realize when we are being taken advantage of. But even if we are, is it their job to protect us from ourselves? The government is, again, telling us that we are not completely responsible for our bad decisions.
I feel like it kind of takes away our free agency. Those who use credit cards irresponsibly consciously make that choice. When will we ever learn to stop doing this if it isn't a little painful? Why does the government feel like they need to make using credit cards easier for us? People need to see and feel the hard cold reality of spending beyond their means, and those who go overboard and use them irresponsibly need to be treated harshly, their credit scores lowered and their ability to use credit cards taken away. The market will take care of this. But if the government steps in, like they have, it will just make it easier to spend on credit, making the problem even worse.
I KNOW that the credit card companies are unethical and try to take advantage of consumers. My answer to that is STOP DOING BUSINESS WITH THEM!! (and I promise that I know that there are certain situations where using them is unavoidable, but that isn't what I am talking about here). If everyone would try to live more within their means the credit card companies would basically be put out of business. Believe me, I have felt the pain of excessive credit card debt. Every single charge made was done by my own hand. I have worked very hard in my life to gain control of this and finally feel like I have a grasp on the reality of my financial life.
This isn't just about this recent meddling of the government in the credit card business. It is about freedom. Every time the government pushes it's boundaries a little more and inserts itself into the private sector we lose a little bit more of our freedom. But I feel like people aren't thinking critically about this. I feel like so many young people of today see the government as an entity that is there to help and protect them, not to ensure their freedom, which is what the founding fathers originally intended. Okay, I'm getting off my soapbox...
Rush Limbaugh, I mean Dad, I mean Becky...I understand your point and I respect it. I agree that the federal government is getting too big and paternalistic in many ways, but I actually do believe that the purpose of government is to serve and protect its citizens.
As an American citizen, I would like my government to protect me from horribly unethical business practices. The only way I can seek recourse against such companies' hanky-panky, is if there is a law in place that allows me to do so. Otherwise officially, they aren't doing anything wrong...just innocently taking full advantage of our capitalistic society.
I understand that we have personal responsibility for our actions, I agree completely. If people have debt, it's their fault and no one else's, and they should be responsible for taking care of it. (Although, I think it's been proven recently that very few people in America are governing themselves well. Topic for another day.) But for example...did you know that you have to pay your bill before 10am or you're charged a late fee? I didn't, and I think it's beyond ridiculous that I would even be expected to know that. What other businesses function that way? To deal with the different moral beliefs that exist in any one society, we as individual citizens, are expected to abide by laws that protect us and those who surround us. Why should businesses, be any different? (Now...if you're libertarian or an anarchist, you'll feel differently, of course.)
By the way, I knew this would be controversial. Can't wait to hear what dad has to say. ;-)
I agree with both sides. I am glad the government is stepping up to change unethical fees and things like that, which are designed to take advantage of the consumer.
At the same time, it makes me so mad when the government steps in to take away conseuences to peoples bad decisions. Take for example mortgages. First they allowed people to get into bad loans that there is no way they can afford, then they step in to save them from the consequences of not being able to pay their house payments. This penalizes those of us who pay our payments on time every month by not providing us with the same benefits. This kind of thinking encourages irresponsibility in spending.
By the way did anyone else catch the whole Obama, Notre Dame thing? I love it. A group had their own graduation ceremony to protest his belief that we all need to change our thinking (ie. abortion) just because it's 2009. I guess his platform of change meant conform.
Okay, first of all, I don't even listen to Rush Limbaugh :) And maybe the credit card thing isn't the best example of the point I am trying to make (the mortgage thing is a better example, Colin). I agree that there need to be regulations on things like the late fee after 10 am (that has never happened to me, but I'm sure it does happen and it is beyond ridiculous). However, I feel like when congress takes something like this on they overstep their bounds and put in a bunch of restrictions that don't need to be there. They throw everything in, including the kitchen sink. Politicians have no idea how to practice any restraint. If left unchecked they would grow government into some sort of tyrannical rule.
This is, however, a situation where government feels like they need to protect us from ourselves. I agree that credit card companies are slimy, unethical and manipulative. But does that take away our responsibility to read the fine print and figure this out on our own? I'm sure that all of these slimy things they do are in the fine print, so they aren't being outright deceptive. If they were, it would be a different story. The government doesn't think we are smart enough to figure this out on our own, so they are doing it for us, thus taking away our personal responsibility. The whole paradigm of the country is subtly shifting. We,well not me, are starting to see government as some paternalistic entity that should be responsible for doing this hard work for us.
I was just kidding about Rush Limbaugh. You're nothing like him. For one, you're cute. For another you're nice. ;-)
I know what you're saying, but I still think there have to be some limits on what is acceptable and what's not. (By the way, I agree 100% with you and Colly on the mortgage situation.)
The government's been doing the same thing for eons. This is not new. One example not related to credit cards: if we're really all that smart, why should we have speed limits? I know what's safe, so why should anyone tell me how fast I can go? Maybe it's because I think I can drive safely at 90 miles an hour, and someone else believes 60 miles an hour is safe. You can see it as the government trying to protect us from ourselves, or you can see it as the government trying to protect us from all of the irrational people (businesses) out there.
I'm just sayin'....
i think the kind of protection the government should provide is physical protection--policemen, firemen and the military. i think this has been going on for eons, but it has stepped up by about 2000%. i also personally think it is terrible that we penalize people for smoking. have you heard about the fat tax? i think obama has strong ulterior motives for all this that is going on. he is even attempting to disallow doctors to deny performance of abortions for moral reasons. this is way, way, way out of control. our freedom is in extreme jeopardy. mom (not dad:))
mom again---i want to add that i think credit card companies are evil. the whole concept of something for nothing started a long time ago in heaven. there is something really immoral about a company that is able to prey on high school students. credit cards bring ruin to many individuals and families. avoid them like the plague!!!
I agree 100% about the physical protection, mom. That is all the protection I want from my government...
I think Obama should be penalized for smoking. Do you think he is allowed to smoke in the White House?
He has penalized himself...federal tax on a pack of cigarettes is $1.01. He actually signed the bill for the increase in March. (Maybe that's what you're talking about anyway.)
I'm going to post something a little more positive in just a minute.
One last comment, and I'm dropping this...what about the kids who have to breathe their parents' second hand smoke. Where's the protection for them?
My brother and I have serious respiratory problems from smoking parents. Our celings were yellow, goodness only know what color our alveoli and lung epidermal cells are. When I got really sick when my mom was here, she sat down, rubbed my head and said, "it is all my fault" I said "well, I forgive you." That is terrible though, that we had that for so long, not to mention how we must've smelled every day.
I am glad the vampires have legal blocks now, I think it is important. I have never had credit cards, but I have seen them ruin a husband and almost another husband. They are evil. I will never have them. Ever.
As for mortgages- the people who got in over their heads are homeless or in another less-desirable place. It was the banks who were bailed out, not the mortgage-holders. Getting a re-fi on a mortgage is no walk in the park, that is for sure. And we have never been late on a mortgage payment ever.
I'm going to comment here at the end, so probably no one will read it. I will have to submit this comment in two parts because the blog is telling me that comments have to be less than 4097 characters. Sorry this is so long, but if you're interested in all of this comment, look to the next one also.
Actually, I can see the argument on both sides. I can remember as a child, feeling safe because our government required food and drug manufacturers, and manufacturers of any products for that matter, to be honest in their labeling, and to make safe products. But, I don't think such regulation is being consistently enforced any more, unless some official in the government has a vendetta, or a politcal debt to pay. The system is corrupt, and as a result we see many inconsistencies and it is difficult to feel safe. For instance, if you buy vitamin suppliments manufactured in the US, you may be getting dirt in a capsule.
I believe it is appropriate for the government to generate laws to protect young people (all people for that matter) from charlatans who would steel from the innocent. That type of activity should be illegal, and there are many, many schemes, otherwise legal, which do that. Credit card companies come close to that, with one exception: The interest rates being charged are published in advance, and people who take on that debt do so with their eyes open. Most logical humans would not agree to take on debt at uch high interest rates, but new young adults are not always logical, and may not fully comprehend what they are getting into. I believe CC companies know that, and the fact that they market agressively to that group does make them guilty, in my mind, of taking advantage of the innocent. Yet, the "innocent" are adults, capable of cognition, and at some point they have to accept accountability for their actions. If you can look beyond the pain of those "innocents" however, I suspect that ultimately the free market punishes such agressive tactics as the CC companies lose millions in default.
(Continued...)
(Continued from comment number 14)
So, I can see value to the arguments on both sides. I suppose that is why it is a controversial topic, and there is debate (14 responses to this post for instance.) That being said, I do believe in the free market system, and I agree that the government is way too involved in our lives, that there are way too many regulations which give them way too much power, and it is definitely getting worse. The federal government now essentially owns the US auto and banking industries. The more I see, the more I believe that such a takeover of financial power is the intent of the current administration, and to pay for it, they intend to steal (tax) the wealth that motivated Americans have worked so hard for. That is contrary to the laws of our land (the Constitution,) and therefore, although legal, is just as criminal as the illicit actions of the credit card companies.
It is very difficult to maintain patriotic allegiance to such a government. When I was a kid, and I had the distinct impression that our limited government had our best interests at heart, I deeply respected the American way and was proud to be part of it. I don't feel that way right now, and I can't imagine that many people do. When such is the case, we tend to look for ways to skirt the system. Some rationalize cheating or disobeying what they see to be fallacious laws. This makes the intrusive government even more tenacious about intrusive regulation, and so it ramps up, ultimately leading to socialism/communism/or whatever other force-isms you can think of, with we, the people, being robbed of more and more of our agency. Force is not the Lords way, although the its source does go back to our pre-earth life. It is still with us, and will be until the end. It is part of our test, and we must be valiant about resisting it with our yet-allowable free speech. There is much organized resistence, and we can make a difference by supporting good causes. Ultimately the balance will shift back.
By the way, for what it's worth, I have found that Rush Limbaugh, who has made a life of studying conservatism and free enterprise, is usually on the right side when gauged against the standard of agency. He may be flamboyant, and people love to hate him, but he is usually right. If you test him by listening for a couple of weeks, you will find this to be the case.
Dad
Dad, that was a great comment. I enjoyed it and didn't feel like arguing back. Might be a first!
Rush Limbaugh might be a true conservative and a defender of agency, which I can appreciate and respect, but as a person (based on some of the decisions he's made for his own life) I'm not sure I respect him so much.
I did read your Comment David, the whole thing, well, ok, maybe I started thinking about a turkey sandwich about 3/4 the way through the second part, but it is interesting to read what makes everyone tick and their feelings on these topics.
I've thought a lot about all your comments. And given my career field feel I could probably write a 20 page paper on my thoughts on this topic, but I won't.
Suffice it to say, I am pro-credit and credit cards, and anti-credit mismanagement on the part of consumers and lenders. The government intervention is a double edge sword for me in its involvement, but I would rather have them involved than leaving lenders free of regulation.
And on that note, David, I doub't anyone will see this comment, but that is ok.
Jason
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