Card issuers beating new law Rates, fees raised before deadline

[sisters6]

Source: WPost




Card issuers beating new law
Rates, fees raised before deadline


By Nancy Trejos
Washington Post
Updated: 07/02/2009 09:46:51 PM CDT

WASHINGTON — Credit card companies are raising interest rates and fees seven months before new rules go into effect that will limit their ability do so, much to the irritation of Congress and consumer advocates.

Chase, for instance, will raise the minimum payment required of some of its customers from 2 percent to 5 percent of the statement balance starting in August. Chase and Discover have increased the maximum fee charged for transferring a balance to the card to 5 percent of the amount, up from 3 percent and 4 percent, respectively. Bank of America last month raised the transaction fee for balance transfers and cash advances from 3 percent to 4 percent. Card issuers including Bank of America and Citi also continue to cut limits and hike up rates, which they have been doing with more frequency since January.

"This is a common practice and will continue to be common, because issuers can do these things for really no reason until February," said John Ulzheimer, president of consumer education for Credit.com, which tracks the industry. "It's what I call the credit card trifecta — lower limits, higher rates, higher minimum payments."

The flurry of activity, which the banks say is necessary to shore up their revenue losses, has irked members of Congress, who passed a new credit card law that was signed by President Barack Obama in May. The law, among other things, would prevent card companies from raising rates on existing balances unless the borrower was at least 60 days late and would require the original rate to be restored if payments are received on time for six months. The law would also require banks to get customers' permission before allowing them to go over their limits, for which they would have to pay a fee.

On Wednesday, Sen. Charles Schumer, D-N.Y., once again requested that the Federal Reserve invoke its emergency powers to place a limit on interest rate hikes.

"This is what many of us feared about a law that didn't take effect right away," Schumer said. "It was never going to take this long for the credit card companies to get ready for the new reforms. Instead, issuers are using the delay in the effective date to wring more dollars out of their customers. It is against the spirit of the law, and it is just plain wrong."

................

Read more: http://www.twincities.com/business/ci_12745336

---

And congress knew this would happen but they did not care.

[Joanne98]

1. Thanks to the CONSERVADEMS who voted to let the banksters fuck the American people!

[WriteDown]

23. What exactly did you expect....

when Joe "Visa" Biden became VP? :shrug:

[closeupready]

27. Yup. Also known as the Senate co-sponsor of the Bankrtupcy Reform Act of 2005.

Gotta love his commitment to struggling working people, huh? :sarcasm:

[Hugin]

2. sigh...

ITYS. :eyes:

Oh, and these same people are now working on the "Healthcare Whatever".

Trust them? No.

[Another Bill C.]

3. Join a local credit union

and get a card from them. As a member, you'll have a voice in running the operation.

[Robb]

7. You can try that.

However if you already have credit card, mortgage and car debt, a credit union will not increase your debt load -- even to pay off another.

BofA yanked our chain for the last time, we thought, so we decided to try to have someone else carry our debt. Yesterday, our credit union, with which we have banked for decades, said in order to offer us any of their loan products, they first had to have us as a credit card customer -- then denied the application, since we had plenty already.

So, "join a credit union" is not always an answer. :hi:

[ChiciB1]

43. That's What I Did... My Interest Rate WAS Lower Than Credit Union UNTIL

Chase decided to raise my rate... FOR NO REASON! Just because they could and I was told it didn't matter how good a customer I was!!

So, I got an 8.5% rate with my Credit Union. Sure glad I thought ahead! My card was with Chase and we had a few arguments for sure!!!

[Uben]

4. Of course, the best remedy.....

....would be for Amwericans to quit using credit cards for instant loans. That's not what they were initially set up for. They were to be a convenience for paying bills. You paid a monthly fee for the convenience. When people started using them for instant loans, the banks saw a goldmine in interest payments. If you need a loan, you can shop banks for fixed loans and pay much less than the credit cards charge.
While the banks have surely abused their credit card customers, they did not make those customers use the credit cards for instant loans. That was a choice, and a bad one, by the customer. Why more people don't get fixed loans to pay off these cc debts is beyond me. If they do not have the collateral to obtain a fixed loan, they should never have been issued a card. That, IMO, was the banks fault, and I have no sympathy for them for their stupidity in issuing those cards.

Do you have a high credit card balance? Are you still using credit cards? That's like buying food you know is poisoned!

A lot of people continue using the cards knowing they can't pay them off at the end of the month, and knowing the banks will not give them a loan. In other words, they know they will have to default, so they rack up as much as they can before the card is cancelled. That is theft, plain and simple, and they should prosecuted to the full extent of the law.

[Missy Vixen]

34. I'll speak slowly

Wages have not kept pace with the cost of living for the past 28 years, which created the explosion in credit cards.

We also have ten million people currently out of work, and some of those folks don't qualify for unemployment. The only thing they may have to keep body and soul together in a several-month job search is a credit card.

I know it makes you feel good to tell those who are currently in a desperate situation how they should have done things differently, but there are people who find themselves with a high CC balance for other reasons than being terminally irresponsible.

>That is theft, plain and simple, and they should prosecuted to the full extent of the law.<

Yup. Lock 'em up. That'll solve EVERYTHING. It's been so effective already, hasn't it? :sarcasm:

[Patchuli]

35. You hit the nail right on the head

Don't you hate it when folks just seem to love being sanctimonious to others?

[DebbieCDC]

56. Spot on Missy

[regnaD kciN]

61. Thank you!

:applause:

Why is it, when it comes to consumer debt, that some on this Democratic board do their best to sound like Republicans? Not all (or, I would guess, even most) of those suffering from massive credit card debt are doing so because they splurged on cruise vacations or big-screen TVs. Lots of people are in debt because of medical issues (theirs or a family member's), a lengthy stint of unemployment, divorce, etc., etc. But, just as Republicans portrayed every welfare recipient as driving around in a Cadillac, or pooh-poohed high unemployment rates by pointing to newspaper want-ads and claiming that anyone who really wants a job can easily find one, so, too, do too many Democrats suddenly turn into Horatio Alger when it comes to other people's financial misfortunes. Want to take that "if you find yourself in trouble, it's your own damn fault, so shut up and lift yourself up by your own bootstraps" attitude? Maybe you'd find a better venue at Free Republic.

[closeupready]

38. That is theft in the alternate universe you apparently inhabit, I agree.

But that is not theft in the real world. I mean, I am not a lawyer, but IMO, in the real world, that is, at worst, being a deadbeat, which is nothing to be proud of, but is not theft, and not a crime. Sorry if that upsets you. Shrug.

[Uben]

63. Upset? No.....

....disgust maybe. If you need asistance, you do it the way everyone else does, you swallow your pride and apply for it. I've been there, laid off three times in the eighties. I stood in line and signed up for assistance, stood in line for gov't handouts, and sold belongings to feed my family. I didn't run up my credit card debt because I knew I could not pay it. Credit cards were never meant to be a "last resort". By definition, a deadbeat is someone who fails to pay off debt, a lazy person, a sponge. If you think that is more honorable than thief, that's your business. Taking someone else's money with the intent to defraud, no matter how you frame it, is thievery. Was Bernie Madoff a deadbeat? No, he was a criminal. He took other people's money with no intention of paying it back.

[closeupready]

65. In a very few cases, people would be

borrowing without any intent to pay back. That is borrowing in bad faith, and it's disgusting, yes. Though, it's kind of difficult to see why someone with sufficient credit to borrow from a credit card company would be willing to destroy that credit rating for the relatively minor amounts cc companies lend.

But in almost all other cases, people really believe they will pay it back (and some will indeed do that), or will find a way to pay it back, if not immediately, then later, even if an outsider looking that person's situation believes that, there is no way in hell this person will pay it back. (Which begs the question, why is a credit card company lending to someone in such a precarious financial situation, and if they do so anyway, aren't THEY being irresponsible? I think so!)

So I guess intent is the issue here. I really don't believe the vast majority of people who end up not being able to pay back are thieves and fraudsters, as you seem to. And since you haven't provided any data to support that argument, I'm not prepared to buy into it. But you are entitled to continue believing it.

Peace.

[Uben]

62. Think what you want...

.....but if you knowingly borrow money that you know you cannot pay back, that is the same as stealing. Someone is taking a loss for your dishonesty. Since when can you justify screwing someone out of their money (yes, that money belonged to someone who invested it)by saying it's just being a deadbeat? What kind of person does that? Jeez!
I don't know where that mentality comes from. Being poor is not a crime. Fraud is, and that is what I am describing as happening.
Also, since when does being honest pertain to being a damned republican? Are you saying democrats are not honest Americans? I'm sorry, but the democrats I know are not thieves. HAving a run of bad luck is one thing, no one blames anyone who is honestly trying to do things right and runs into something they have no control over. That's not what I am talking about. I'm talking about knowingly deceiving for personal gain. It's a crime when republicans do it and it's a crime when democrats do it. The law pertains to everyone. You aren't Robin Hood!

[high density]

5. Four words: Pentagon Federal Credit Union

They have the best card out there. Low balance transfer rates, low fees, and cash back credited every month directly to the balance. They do not have the best interest rate for new purchases, but the idea is not to carry a balance.

https://www.penfed.org/productsandrates/creditcards/rewardcards.asp

5% balance transfer fee is outrageous.

[Moondog]

46. + 1.

I'm really happy with PFCU and their card.

[Algorem]

6. how could they beat that tough deadline?only 7 more months.damn.

[Stellabella]

47. Yes, exactly.

The law should have gone into effect the second Obama signed it. This delay is ridiculous. It's like letting a hostile fired employee have access to all your records and data for a few months before he's finally out the door.

[xchrom]

8. recommend

[global1]

9. That Was Part Of The Deal - The Pols Knew That This Was Going To Happen......

now they can feign righteous indignation at the credit card companies - they can shake their head like Schumer is doing now - still makes you think he's for us people - doesn't it. But bottom line - they gave the credit card companies this grace period to do just what they are doing.

"All I Want To Say Is They Don't Really Care About Us" MJ 2009

[SammyWinstonJack]

15. The word 'really' can be left out. THEY DON'T CARE ABOUT US.

Whether it is about credit card rates or affordable health care FOR ALL OF US, THEY DON'T CARE ABOUT US and really, why should they?

They continue too be elected and then of course, retain all the PERKS AND BENEFITS that go along with their positions of power.


They are not afraid of us or of losing their cushy positions of power :argh:

[closeupready]

29. No, they don't. Time after time, as you argue, we see that they don't give a shit about

struggling Americans.

[closeupready]

28. Of course they knew.

And the CC Companies said, "ok, this is your out - we're gonna raise interest rates in the interim, you complain about it, we're all happy, k?" They think we're stupid, we can't figure this shit out.

[Bluenorthwest]

10. Congress

all I want to say is that they don't really care about us.

[Vinnie From Indy]

11. The credit card bill was a sham and everyone in Congress knew it!

I had to laugh when I got my CITI credit card statement last month. They jacked my rate from 8% to 29.99% for no reason other than "changing market conditions" according to their customer service rep. The VERY SAME DAY I opened my credit card statement I also received an email from Sen. Evan Bayh's office telling me how great the Senator is because he championed the "Credit Card Reform Act" through Congress. I wrote to Bayh and asked him to quit helping me because it is going to send me to the poorhouse.

Quite simply, American government has been acquired by corporate interests. We see it in the laughable sham of a credit card reform act and I predict that we will get a heaping helping of "Fuck You America" in regard to any healthcare legislation that is enacted this year.

[CatholicEdHead]

12. BoA did that to me this week

They now have it pegged to the Prime Rate, it will not immediately change, but they can change it anytime they want. I am one of those bad users who pays everything off on time.

[MorningGlow]

13. Ours too

And we have a hefty balance on it. We're not charging much of anything on it--just working on paying it off now.
:grr:

[nc4bo]

14. And just how many of those companies were whining for bailout money?

Thank God It Passed!!!! Yes indeedy.

[auburngrad82]

16. Chase lowered my limit so that I was above the limit

thereby hitting me with over the limit charges.

I wish there was a class action lawsuit for this shit. I'd sign up.

[whyverne]

17. Legal now, not legal next year.

What a strange world we live in.

[OnyxCollie]

18. Chase raised my minimum payment

and made changes to the account cancellation. The same day, I received a letter saying my credit limit was being raised.

They're saying, "Go ahead, take it. Here's more credit." And when I do, BAM! They close my account and make me pay it back with a higher minimum and a higher rate.

Fuckers.

[riverdeep]

19. This was the bill where the credit card company's lobbyists were actually on the floor

while the vote was taking place. Gee, I wonder what happened?

The idea that their revenues have shrunk really needs to be reframed. They've been legally charging usury rates for years. That should have been illegal. So really what's happening is that the racket is getting scaled down a bit, they are still able to steal in broad daylight because they own, and I mean OWN, the pols. Especially our outraged friend Chuck Schumer there.

[PatSeg]

20. Sadly this could force more people into bankruptcy

A lot of people have lost their jobs or have incurred large medical bills and just can't afford such a huge increase in the minimum balance or interest rates.

[KansDem]

21. Get rid of them!

Last year I paid off CapOne and Target, and am looking to pay off my Home Depot card sometime this year. That'll leave me just Discover and Sears.

I'm not at all affluent so it can be done!

[kojak]

22. Chase is sending me into bankruptcy

Assholes jacked my minimum payments up. Underemployed, I'm burning through savings now. At 2% payments, I could slowly sink and hope to recover next year but at 5%, I'll be defaulting by September. Since I won't be able to land a job w/o a good credit score, they can kiss their money goodbye. Assholes.

[Pavulon]

24. Unsecured debt..Check you state laws on wage garnishment

if you live in a state, like nc, where they cant garnish, the assholes have to come and sue you. The judgement they may get is then payable only when you sell property or the like. It may be worth it to call and tell them that they can lower the rate, close the account and, give you 90 days to breathe or that you will default and they will be left to collect 30c on the dollar.

Unsecured means you can walk away and just deal with the bad credit. Be sure to change your numbers first, the calls would probably get annoying.

good luck, consult a legitimate credit counselor as well.

[natrat]

25. CHANGE YOU CAN BELIEVE IN

as you get thrown out of your house,lose your job and wait in a food line

[Pavulon]

26. They cant touch you house.

there is a very strategic way to deal with creditors. Unsecured debt should be stopped first, never convert it to secured debt. Cars can go next as long as they are only collateral on loan. In no state can a credit card company take your home, even if you have massive balances.

[closeupready]

31. I'm sure they're thinking about changing that soon.

They'll find a way.

[Skittles]

30. well, that's why they gave them the time

to do just that

[closeupready]

32. LOL, I'm not sure you get it.

Legislators didn't give anybody time - the cc companies told legislators, 'give us a year until the law kicks in.' Legislators' response? 'that's all the time you need? okay.'

[Skittles]

33. LOL

yup - they are in cahoots - cracks me up how many DUers cannot quite figure that out

[davidwparker]

36. I suppose they had their reasons for not making the law immediate. Turn

them out.

[pinniped]

37. This really is the best congrass money can buy.

The flurry of activity, which the banks say is necessary to shore up their revenue losses, has irked members of Congress

These dumbshits knew what CC companies would do with their nine month window.

Surprised my ass.

[Vidar]

39. Forward your bills to Rahm Emmanuel.

[hayu_lol]

41. Gee, if we are mostly in debt, paying very high...

interest rates, can we ask for transport to Australia?

Worked for the British when they had a debtor's prison.

Whatever happened to the 'loanshark' laws?

[Vidar]

48. If only the Aussies would take us!

[WriteDown]

44. Why Rahm?

Why not go straight to the top and send them to B himself?

[Freddie Stubbs]

50. He didn't vote for the bill

[sarcasmo]

57. He signed the Bill.

[Freddie Stubbs]

58. Rahm Emmanuel did not sign the bill. He is not the President

[sarcasmo]

59. I was responding to the go straight to the top statement.

[Freddie Stubbs]

64. President Obama is the top dog in the administration

[lunatica]

40. Pillaging and looting continues. Story at 6:00 pm

[DJ13]

42. I remember Congress members on TV excusing the delay by saying

"The card issuers need that much time to prepare to abide by the new regulations".

I think they knew the CC companies wanted time to adjust their accounts so high the new laws have no meaningful effect for most people since Congress refused to impose usury limits, and went along with that to keep the bribes coming in.

[syberlion]

45. We as a country need to get rid of the victim mentality

In reading this story and the following thread, I kept saying to myself at the end of every complaint, "then get rid of the people not representing your interests." I know what the immediate answer is, "it's impossible" or "it's too late" or "what, replace my conservo-dem with a republican?"

This country is rife with examples of overcoming the odds. Look at this past election cycle, we have overcome a major barrier in a federal election. Was it easy? Did it just happen? No. It was hard work. Even as broke as I was, I donated a little money because I believed. I donated what time I had, because I believed. Was there doubt in my mind? Did I think it was crazy to think enough people would wake up in time? Yes, but I still pushed even at the small level of just one person with zero influence.

What drove me on? Thinking about Poland and the worker's movement, East Germany and the reunification of Germany, the Voting Rights Act, Barbara Jordan's opening remarks at the Watergate hearings and much more. I take to heart those words, "We the people..." because we are the government. We've been slowly lead to believe others are in charge and for us to just go to the back of the bus and mind your own business. Well, this country IS my business, it says so at the very tip-top of the contract known as the Constitution. I refuse to take on the mantle of victim.

As for the question of "what the hell can I do about it?" get active, join your local party machine, find non-corporatist democrats to run against non-democratic democrats, push and keep pushing, re-frame the argument into "this is how we want to be governed." We've become passive accepting whatever we are handed. Oh, we grumble and complain mostly under our breaths, but do we do anything about it? No, because we've been conditioned by fear.

The established power base is fearful and they share that with us every day. They fear we will actually read the contract and re-establish the people-powered government the Constitution lays out within its pages. They fear we will be deaf to their constant negativity and get out and vote. The negative campaigning wasn't meant to get more of their people to the polls, it was to suppress our side from going out and voting. Their side's wing-nuts will always go out and vote, like most unthinking sheep and cattle they'll go where they are led. The goal is to suppress the true majority below the bat-shit crazies. When that started to fail, then they had to fall to rigging and caging to keep in power. So, they are running scared and standing directly in the way of real progress, real change. This includes the blue dog republocrats.

Until the people get off their collective asses and re-take this government, we will continue to suffer under corporate rule. Remember, the Constitution does not start out with "We the Corporations" and it is time we not only remember that, but start sitting in the front of the bus and let the corporations move to the back of the bus. Easy? I don't know, was it easy for Rosa Parks to go against the entrenched racism of the south? It is time, it is past time, let's start with the mid-term elections and get some actual representation to Washington DC. How? Participate, donate time (god knows we have very little money), but do something because there are more of us than the bat-shit crazies, we need to keep overwhelming the rigged elections, just show up, beat the odds and we can re-install "We the people."

[yodoobo]

49. feigned irritation

"much to the irritation of Congress"

If they didn't know this would happen, then they wouldn't be smart enough to dress themselves.

Irritation my ass. EVERYONE knew this would happen.

[Honeycombe8]

51. Don't charge!!!!!! Except for convenience. When the bill comes in, pay it!

Then it doesn't matter what the fees are, what the interest rates are.

You don't have the $$$ in your account to cover it at the time of purchase? That means you can't afford it! Put down that Ipod or laptop! You can't afford it. Own the admission. Be proud of your ability to live within (or below) your means.

Sure, there are some people who sometimes need to charge when they don't have the $$$. But we all know those are few, compared to the people who have gone into hock buying every new electronic gizmo that came out on the market and they just had to have. Or computer games for the kiddos. Whatever unnecessary, luxury item you can think of.

Bottom line: You are borrowing money from a loan shark, when you charge. Don't do it, except under dire circumstances, or mere convenience! Use your debit card or write a check instead.

[spin]

53. I agree. It works great...

Many years ago, after I divorced, I paid off all credit card debt.

I felt so good that after that I have never failed to pay any credit card amount off at the end of the month.

Te card is great for things I buy online. I don't live near any major urban areas so I do a lot of shopping on the internet.

If I want toys, I save until I can afford them.

Screw the bastards!

[Vinnie From Indy]

54. Your advice is good, but alot of folks are too deep already

These rate hikes will force many folks over the edge.

[Dumak]

52. sounds more like willful/feigned ignorance

Just like the prelude to the war in Iraq.
Senator: "Oooh, who would ever expect that corporations would engage in this kind of gamesmanship! This is an outrage!!".

[DebbieCDC]

55. Usury used to be against the law

Then the gov't lifted the caps on credit card interest rates and bingo! A banquest for the credit card companies that's been going on nonstop for 30 plus years.

[Iwillnevergiveup]

60. J.C. Penney (Pinchers)

Suddenly lowered my limit from $2,500 to %1,400 with a zero balance about 6 months ago. So I stopped shopping there. Then a couple months ago I get a friendly letter in the mail advising me credit limit raised to $1,800. I still don't shop there and cut up the card. But I'm not letting Penney's know that because canceling the card lowers credit ratings. Bastards all.