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Old 12-14-2008, 07:55 AM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,813,295 times
Reputation: 1708

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Fed to rule soon on sweeping credit card changes - Yahoo! News (http://news.yahoo.com/s/ap/20081214/ap_on_bi_co_ne/fed_risk_ruling;_ylt=AsFMtTHpUUR0SU6OlDJVHO6yBhIF - broken link)



Quote:
SIOUX FALLS, S.D. – Credit card companies could no longer boost interest rates on existing account balances if the Federal Reserve adopts new rules as written at a meeting set for Thursday.


Quote:
The proposed changes would let credit card companies increase the interest rate only on new cards and future purchases or advances, not any current balance.

Another new Fed rule would require firms to apply any payment above the minimum to the part of the balance with the highest interest rate.

Some companies now allow consumers to transfer other card debt at zero interest but then require all payments to go toward that amount, not the part of the balance carrying a higher interest rate, Plunkett said.


The other significant change would affect subprime or "fee harvester" cards used by people with a credit score too low to qualify for a normal card. They typically carry no more than a $500 limit but require a large upfront fee.

The Fed proposal would cap that fee at 50 percent of the credit limit and allow the cardholder to pay off the initial balance over a year, not immediately.




Quote:
"The proposed rules are intended to establish a new baseline for fairness in how credit card plans operate," Federal Reserve Chairman Ben Bernanke said in May. "Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs."



Quote:
Greg Ticknor, president of Total Card, said he won't know the effect until the change is announced Thursday but the company likely would survive by adjusting the types of cards it issues.

Under the current proposal, some of the 70 million Americans with "challenged credit" probably wouldn't qualify for a card, so they'll instead rely on payday loans, he said.

"In today's economy, that's the opposite of what they should be doing," Ticknor said of the loss of credit

And....................... most importantly. The big issue of this article.


Quote:
South Dakota eliminated the interest rate cap on credit cards almost 30 years ago and has thrived from the industry that employs as many as 20,000.

The proposed limits on subprime cards could cost the state of 788,000 people from 3,000 to 5,000 jobs, said Gov. Mike Rounds.
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Old 12-14-2008, 08:02 AM
 
Location: WA
5,474 posts, read 21,931,694 times
Reputation: 6157
The market will adjust and one change will be less availability of credit... and then there will be all the crying because the bad guy banks won't lend money to everyone.

I have been a regular credit card user for forty years and never had a single problem or complaint.
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Old 12-14-2008, 09:03 AM
 
19,123 posts, read 20,697,215 times
Reputation: 8406
I remember reading that removing the credit card cap was what made credit cards more available to people... I think reinstating the "cap" wouldn't be so bad... it will lead to a dramatic decrease in credit card offers and people will no longer have the "opportunity" to live beyond their means...
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Old 12-14-2008, 09:52 AM
 
9,830 posts, read 20,029,438 times
Reputation: 7621
Sorry we can't afford to keep giving people money that can't pay it back. The game is up.

You look at all the honest people out there that pay their bills and they are the ones that have to pay on the back end for others running up $100k on guitars and vacations and then defaulting on the cards. Time for this BS to stop.
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Old 12-14-2008, 10:41 AM
 
5,093 posts, read 10,052,162 times
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Quote:
Originally Posted by wanneroo View Post
Sorry we can't afford to keep giving people money that can't pay it back. The game is up.
Would that include Banks and Large Insurance Companies?

Or just little people?
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Old 12-14-2008, 10:46 AM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,921,397 times
Reputation: 3587
Quote:
Originally Posted by baystater View Post
Fed to rule soon on sweeping credit card changes - Yahoo! News (http://news.yahoo.com/s/ap/20081214/ap_on_bi_co_ne/fed_risk_ruling;_ylt=AsFMtTHpUUR0SU6OlDJVHO6yBhIF - broken link)





















And....................... most importantly. The big issue of this article.
All this stuff is long overdue. These banks are ripping off the public right left and center! Another thing that needs to be done is to outlaw the practice of sending out bills that are due in 3 or 4 days so they can collect a late fee from people. These people are common thieves!
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Old 12-14-2008, 10:49 AM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,921,397 times
Reputation: 3587
Quote:
Originally Posted by cdelena View Post
The market will adjust and one change will be less availability of credit... and then there will be all the crying because the bad guy banks won't lend money to everyone.

I have been a regular credit card user for forty years and never had a single problem or complaint.
Just because you haven't does not mean others have not had problems. They raped my sister by raising her rate from 12% to 38% overnight on an existing balance because of ONE payment that was late by not even a week! And on top of that, they refuse to put the maximum credit on the credit report which damages the FICO score. These people are nothing but a bunch of criminal slimeballs. They really should be in jail.
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Old 12-14-2008, 10:50 AM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,921,397 times
Reputation: 3587
Quote:
Originally Posted by evilnewbie View Post
I remember reading that removing the credit card cap was what made credit cards more available to people... I think reinstating the "cap" wouldn't be so bad... it will lead to a dramatic decrease in credit card offers and people will no longer have the "opportunity" to live beyond their means...
Agree! If you have bad credit, you should not have credit cards except for the prepaid cards.
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Old 12-14-2008, 02:37 PM
 
9,830 posts, read 20,029,438 times
Reputation: 7621
Quote:
Originally Posted by Philip T View Post
Would that include Banks and Large Insurance Companies?

Or just little people?
That would be everyone including the government.
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Old 12-14-2008, 03:14 PM
 
Location: Tucson
42,835 posts, read 80,696,203 times
Reputation: 22814
Quote:
Originally Posted by wanneroo View Post
That would be everyone including the government.
Well, I highly doubt that one!
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