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Old 07-06-2009, 09:48 AM
 
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The ink has barely dried on credit card reform signed by President Obama in May, and already, issuers are raising prices again.

Most issuers have raised rates or fees for certain borrowers. In the latest round, Bank of America and Chase have increased, or are increasing, their maximum balance-transfer fees, from 3% to 4% and 5%, respectively. Chase is also expanding the definition of who could get hit with a penalty interest rate. Meanwhile, InfiBank is establishing a higher minimum APR — the greater of 15.99% or 11.99% plus the prime rate — on many cards. And Capital One and Citigroup continue to raise card rates for certain borrowers

The changes, according to Scott Talbott, a senior vice president for the Financial Services Roundtable, which represents the nation's largest banks, are a "natural result" of the new law: "The industry is restricted in setting credit terms based on the borrower's individual risk profile, so the price goes up for all borrowers."

Consumers hit again as some banks raise credit rates, fees - USATODAY.com
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Old 07-06-2009, 09:56 AM
 
Location: NJ/NY
10,632 posts, read 17,214,172 times
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Quote:
Issuers' actions come as a growing number of consumers lose their jobs and default in record numbers on their credit card debt. The industry is also preparing for restrictions to take effect in February 2010. That new law limits when issuers can raise interest rates on existing debt and charge late and over-limit fees. But it doesn't impose a cap on card rates and fees.
I suggest reading the legislation regarding the credit card fees. I actually worked in that industry for 5 years and agree with the legislation. If you carry $4k of debt on a credit card with an 8% rate, the new legislation will ensure that if you get ratejacked to 24%, the previous $4k balance will stay at 8%. They were getting away with murder.

I actually just got rate jacked from 8% to 24% for no reason. Closed it off. Perfect payment history.
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Old 07-06-2009, 09:58 AM
 
Location: Southcentral Kansas
44,884 posts, read 29,777,197 times
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Quote:
Originally Posted by AeroGuyDC View Post
The ink has barely dried on credit card reform signed by President Obama in May, and already, issuers are raising prices again.

Most issuers have raised rates or fees for certain borrowers. In the latest round, Bank of America and Chase have increased, or are increasing, their maximum balance-transfer fees, from 3% to 4% and 5%, respectively. Chase is also expanding the definition of who could get hit with a penalty interest rate. Meanwhile, InfiBank is establishing a higher minimum APR — the greater of 15.99% or 11.99% plus the prime rate — on many cards. And Capital One and Citigroup continue to raise card rates for certain borrowers

The changes, according to Scott Talbott, a senior vice president for the Financial Services Roundtable, which represents the nation's largest banks, are a "natural result" of the new law: "The industry is restricted in setting credit terms based on the borrower's individual risk profile, so the price goes up for all borrowers."

Consumers hit again as some banks raise credit rates, fees - USATODAY.com
I am sure that that law was written by lobbyists, you know those people who weren't going to function in the DC that Obama ruled, and that they worded all of it with loopholes their constituents could use. When Congressmen ever start writing laws again, instead of lobbyists, maybe their constituents can get some goodies. Of course, we all knew that the lobbyists wouldn't be allowed in DC since Obama promised such to be the case last summer. He sure did get his whole foot in his mouth with a lot of those promises.
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Old 07-06-2009, 10:01 AM
 
Location: NJ/NY
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I guess you'd be totally fine with getting rate jacked from 5% to 25% on an existing balance? Out of all the legislation to complain about...
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Old 07-06-2009, 10:02 AM
 
Location: Southcentral Kansas
44,884 posts, read 29,777,197 times
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Originally Posted by newtoli View Post
I suggest reading the legislation regarding the credit card fees. I actually worked in that industry for 5 years and agree with the legislation. If you carry $4k of debt on a credit card with an 8% rate, the new legislation will ensure that if you get ratejacked to 24%, the previous $4k balance will stay at 8%. They were getting away with murder.

I actually just got rate jacked from 8% to 24% for no reason. Closed it off. Perfect payment history.
I have always used credit cards as a convenience only and that means not having to carry huge wads of cash. We charge no more than we can pay at the end of the month and Chase hasn't jacked us yet. There is only one way to deal with credit cards and mine is it. The companies don't like that but they still make money or they would have jerked our cards long ago.
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Old 07-06-2009, 10:03 AM
 
Location: NJ/NY
10,632 posts, read 17,214,172 times
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Originally Posted by roysoldboy View Post
I have always used credit cards as a convenience only and that means not having to carry huge wads of cash. We charge no more than we can pay at the end of the month and Chase hasn't jacked us yet. There is only one way to deal with credit cards and mine is it. The companies don't like that but they still make money or they would have jerked our cards long ago.
I do the same (don't carry a balance) and got rate jacked anyway. Funny, since I got jacked by Chase.
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Old 07-06-2009, 10:05 AM
 
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"Issuers' pricing changes mean that consumers have to keep an '"eagle eye' on the fine print of their bills, says Ruth Susswein, deputy director of national priorities at Consumer Action, an advocacy group."
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Old 07-06-2009, 10:08 AM
 
23,837 posts, read 20,824,957 times
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Originally Posted by delusianne View Post
"Issuers' pricing changes mean that consumers have to keep an '"eagle eye' on the fine print of their bills, says Ruth Susswein, deputy director of national priorities at Consumer Action, an advocacy group."
Administration sends Congress consumer legislation

WASHINGTON (AP) - President Barack Obama asked Congress on Tuesday to create a new agency to police the fine print on consumer products like credit cards and mortgages and determine what fees, penalties and interest rates are fair.

This is interesting. It makes me wonder if this is reaction to the credit card industry making rate/fee increases immediately after the "reform" legislation was signed? Did this take Obama by surprise, thus, lending purpose to this new "agency?"
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Old 07-06-2009, 10:13 AM
 
Location: NJ/NY
10,632 posts, read 17,214,172 times
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The CC industry has been making these rate/fee increases for approx the past year.
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Old 07-06-2009, 10:19 AM
 
34,990 posts, read 35,929,878 times
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Originally Posted by AeroGuyDC View Post
Administration sends Congress consumer legislation

WASHINGTON (AP) - President Barack Obama asked Congress on Tuesday to create a new agency to police the fine print on consumer products like credit cards and mortgages and determine what fees, penalties and interest rates are fair.

This is interesting. It makes me wonder if this reaction to the credit card industry making rate/fee increases immediately after the "reform" legislation was signed? Did this take Obama by surprise, thus, lending purpose to this new "agency?"
I dont think any meddling with the credit card companies is a good idea. Let people learn, or not learn, to read fine print and the market will continue to manage itself. I would guess the cc companies are taking advantage of this window of time while they have it, but I dont know about the subject at all. This agency -- if it has to exist, why cant it just be a part of the FTC? Obama -- I cant imagine it took him by surprise, but I dont know enough to speculate on what the purposes of all this might be.
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