Kerry Proposes Crackdown on Credit Card Abuses

[Imalittleteapot]

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20040827/ts_nm/campaign_kerry_dc

Kerry Proposes Crackdown on Credit Card Abuses

By Michael Conlon

SAN FRANCISCO (Reuters) - Democratic presidential nominee John Kerry (news - web sites) on Friday proposed cracking down on unfair credit card lending practices that he says have helped Americans pile up record levels of charge card debt <snip>

This is an issue that can get Kerry many votes. Personally, I would like to see a cap on credit card interest charges.

[unblock]

1. i believe there IS a cap on interest charges

under state usury laws. unfortunately, credit card companies chose to incorporate in states where the usury rate is something like 36%.

[unblock]

2. what i am pleased about is his call for a warning when teaser rates expire

right now, it's next to impossible to figure out when your 2.9% teaser rate turns into a 15.9% ouch ouch rate. there should be a clear warning on each statement that says, "your preferred rate expires on mm/dd/yy".

how hard is that?

of course, it's not hard. it's just that if you warn people, they might pay it off before you can sneak in that month or so of high interest rates.

[Democat]

3. This is small compared to the big issues facing America and the world

I'm glad that Kerry wants to do this type of thing, but there are much bigger issues facing America that need to be dealt with. You don't win or lose a campaign on being against credit card abuse. :)

[Imalittleteapot]

4. But it's one of those issues that most of middle class

can relate to.

[mbali]

6. This is JUST the kind of issue that wins elections . . .

Not by itself, of course, but voters will go with the candidate who not only agrees with them on the big issues, but who will also make their lives a little bit better. This is exactly the kind of bread and butter issue that resonates with voters.

[mbali]

5. This is an Edwards proposal - part of his Real Solutions plan in primary

Great to see it back in play!


Saving The American Dream: Helping Families Beat Debt And Build Their Future - November 5, 2003

Fight Credit Card Rip-Offs: Edwards believes that credit card companies have a responsibility not to exploit families by engaging in abusive practices or burying loan terms. A bump in the road like an illness or a job layoff shouldn't lead to spiraling debt and the threat of losing a home.


End Abusive Practices that Kick Families When They Are Down. To protect families under heavy pressure from massive interest rate hikes, Edwards will require credit card companies to: (1) restore the 14-day payment grace period before late fees are imposed; (2) notify customers at least 15 days prior to unilaterally raising rates, giving consumers an opportunity to change cards; (3) determine payment due dates based on the date of the postmark, not the date of receipt of the bill by the company; (4) charge no late fees larger than the outstanding balance; and (5) restrict bait and switch practices when customers are pre-approved at one rate but then offered a credit card at a higher rate.


Require Full Disclosure and Honest Advertising. Edwards will require companies to disclose key terms in one paragraph written in plain English; disclose the limits on introductory rates and other incentives, with adequate notice so the borrower to cancel the card if desired; and disclose the full consequences of making only minimum payments, including the number of years and total dollars it will take to pay off the debt. Some have estimated that 40 percent of Americans make the minimum payment on their credit cards each month; an individual with a $10,000 balance, an 18 percent interest rate, and minimum payments of 2 percent a month would need 58 years and over $28,000 to pay off the debt.


Protect Young People from Runaway Debts. Edwards believes that we should take reasonable steps to protect young adults, in their first experiences with credit, from running up large debts. Credit card companies should only issue credit to people under 21 if they have a cosigner, an independent means of support, or have completed a financial literacy course. When credit card companies pay colleges millions of dollars to market cards, Edwards will require them to use some of the funding for financial literacy courses for the students, with reduced interest rates for students who complete them.
http://www.johnedwards2004.com/page.asp?id=331