On Thu, 28 May 2009 12:27:30 -0500, Omelet wrote:

> In article >,
> "Default User" > wrote:
>
>> Omelet wrote:
>>
>>> In article >,
>>> "Default User" > wrote:
>>
>>> > I use credit cards for everything I can. At least for now, I get the
>>> > cashback rewards. We'll see when the new laws kick in.
>>
>>> What new law?
>>
>> There are new restrictions in the works to limit credit card companies
>> ability to levy fees and raise interest rates. They've been making
>> noises about doing away with rewards programs and even reintroducing
>> annual fees for "good" customers.
>>
>> Brian
>
> Hm. Could get interesting.
> I like the idea of limiting raises in predatory interest rates.
> That has hurt a LOT of people.

i think the restrictions involve notification of rate raises and raises on
existing debt. here's the major dope:

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.

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.

<http://www.nytimes.com/2009/05/20/your-money/20money.html>

now, the upshot of all this may be that 'deadbeats" - the card companies'
term for people who pay in full every month and thus avoid interest charges
and late fees - may no longer get the free ride they've been getting, since
the banks will be less free to gouge other customers. this could be in the
form of a return to annual fees, an end to 'bonus miles' and cashbacks and
the like. it's difficult to know how it will all shake out.

i think the credit companies brought this on themselves with some of the
shady shit they've been pulling, but then i'm just a bitter old
left-winger.

your pal,
blake