Credit Card reforms inching closer to reality

[Phokus]

Originally posted by: spidey07
As much as I hate gubment interference in any of this I have always had a severe problem with the clauses in card agreements like "can change the terms for any reasons at any time". Some common sense legislation already exists (some bill passed 2-6 years ago? Some consumer protection stuff) and it wouldn't hurt to expand that to prevent the outrageous terms the credit card companies get away with.

Yes I understand that I signed up for it and agreed to it, but really don't like the ability to change the terms so severely. No line of credit that I know of has such a thing either by law or by competition.

-- Require anyone under 21 to prove that he or she can repay the money before being given a card, or have a parent or guardian promise to pay off the debt if he or she defaults.
Good idea, gotta prove you can pay it.

--Require lenders to give customers 45 days notice before increasing rates and mail their bills 21 days before the balance is due.
Somewhat already being done.

--Ban fees if customers want to pay their bills by phone or online.
Only shitty banks do this anyway


--Prohibit over-the-limit fees unless a cardholder elects to be allowed to go over their limit.
meh, you shouldn't be going over the limit so you face whatever stupidity penalty there is.

--Require lenders to say how much time it would take and how much money in interest would be paid if only the minimum monthly payments are made.
BIG HELL YES. If only to open people's eyes that never learned how interest works.

--Require that gift cards remain valid for five years.
No reason not to do this.

Hmm, you sound like a communist. Credit card companies should be able to do whatever they want. This IS the free market, right?

Oh wait, i forgot, conservatives can spout how they're for the free market, but it's only THEM who can say what they like government intervention in.

 

[jonks]

Originally posted by: FuzzyBee

Originally posted by: jonks

Originally posted by: MotF Bane
Here's an idea - personal responsibility.

Ah yes, deal with the normative and not the reality. Compassionate conservatism at its finest.

(this refers more to the orgy of available credit shoved down the throat of college freshmen, a cohort with no jobs, no income, no credit history or experience in dealing with debt, known for notoriously bad judgment, and already indebted thousands in student loans)

How is it that personal responsibility can not be reality?

It can and should be for most people in most circumstances. But personal responsibility doesn't exist in a vacuum. People are often targetted by scam artists with clever schemes that seem perfectly reasonable. Madoff scammed billions from investment-wise fiduciaries for years. We want people to be responsible but we also want to help people be responsible.

There's a reason CC co's target college kids; they know very well what results from giving thousands in available credit to people with zero income and no experience in managing funds or balancing a checkbook. It's predatory. They say things like "no payments, 0% interest, thousands in credit, get it just for emergencies..." In reality, in the college environment, where you sign up for a credit card to get a t-shirt or a thermos, most will still act reasonably, but we should endeavor to educate and protect the less savvy.

 

[StageLeft]

Probably a lot of good stuff here, but ultimately the best way to avoid getting screwed by CCs is to not use them. I am now only using mine for online purchases, otherwise nothing whatsoever. They are a sham and game, basically.

Realize that these reforms only do what a person can do by themselves; namely, they remove the person getting screwed by the CC, but they can do this themselves. Pay for everything with cash and start a savings account. Then, win.

A lot of the stuf CC companies pull is bullsh*t nobody would tolerate on a real loan like a mortgage. Imagine if your credit score got dinged down a lot and your mortgage instead of 6.5% gets jacked to 9% or your car loan out of the blue could go from 7 to 12 because you missed a payment on a couple of cards. We put up with it because we generally are talking about so much smaller amounts. Also because psychologically a lot of people don't see their credit card as a loan. If they knew and truly internalized that they are constantly taking out loans, like a car or house, but on a smaller scale, they may have more pause.

 

[MovingTarget]

There are a lot of good suggestions here in this thread. The CC companies have been raking consumers over the coals for far too long with no real accountability. I can't wait for these reforms to become law.

Next target: the 'Payday Loan' industry. These guys are even worse than the CC companies as far as predatory practices go...

 

[Acanthus]

Originally posted by: Skoorb
Probably a lot of good stuff here, but ultimately the best way to avoid getting screwed by CCs is to not use them. I am now only using mine for online purchases, otherwise nothing whatsoever. They are a sham and game, basically.

Realize that these reforms only do what a person can do by themselves; namely, they remove the person getting screwed by the CC, but they can do this themselves. Pay for everything with cash and start a savings account. Then, win.

A lot of the stuf CC companies pull is bullsh*t nobody would tolerate on a real loan like a mortgage. Imagine if your credit score got dinged down a lot and your mortgage instead of 6.5% gets jacked to 9% or your car loan out of the blue could go from 7 to 12 because you missed a payment on a couple of cards. We put up with it because we generally are talking about so much smaller amounts. Also because psychologically a lot of people don't see their credit card as a loan. If they knew and truly internalized that they are constantly taking out loans, like a car or house, but on a smaller scale, they may have more pause.

WaMu got me, and i was doing the same thing you are doing. I only used my card for online purchases and the like. I called them and got the payoff one day. Sent it in.

I hear nothing from WaMu so i think everything is hunky dory. It is now 8 months later. I get a letter in the mail stating that they compounded some interest before the payoff posted. I am now up to $181.22 in late fees.

Also, I no longer owe this debt to WaMu. I now owe it to Chase, whom has decided that because my account is 8 months deliquent it should be sent to collections.

 

[Craig234]

Originally posted by: Acanthus

WaMu got me, and i was doing the same thing you are doing. I only used my card for online purchases and the like. I called them and got the payoff one day. Sent it in.

I hear nothing from WaMu so i think everything is hunky dory. It is now 8 months later. I get a letter in the mail stating that they compounded some interest before the payoff posted. I am now up to $181.22 in late fees.

Also, I no longer owe this debt to WaMu. I now owe it to Chase, whom has decided that because my account is 8 months deliquent it should be sent to collections.

Talk to them, explain the history, and demand they eat it all and retract any bad credit. Go to the regulatory agencies if they refuse.

 

[StageLeft]

Originally posted by: Acanthus

Originally posted by: Skoorb
Probably a lot of good stuff here, but ultimately the best way to avoid getting screwed by CCs is to not use them. I am now only using mine for online purchases, otherwise nothing whatsoever. They are a sham and game, basically.

Realize that these reforms only do what a person can do by themselves; namely, they remove the person getting screwed by the CC, but they can do this themselves. Pay for everything with cash and start a savings account. Then, win.

A lot of the stuf CC companies pull is bullsh*t nobody would tolerate on a real loan like a mortgage. Imagine if your credit score got dinged down a lot and your mortgage instead of 6.5% gets jacked to 9% or your car loan out of the blue could go from 7 to 12 because you missed a payment on a couple of cards. We put up with it because we generally are talking about so much smaller amounts. Also because psychologically a lot of people don't see their credit card as a loan. If they knew and truly internalized that they are constantly taking out loans, like a car or house, but on a smaller scale, they may have more pause.

WaMu got me, and i was doing the same thing you are doing. I only used my card for online purchases and the like. I called them and got the payoff one day. Sent it in.

I hear nothing from WaMu so i think everything is hunky dory. It is now 8 months later. I get a letter in the mail stating that they compounded some interest before the payoff posted. I am now up to $181.22 in late fees.

Also, I no longer owe this debt to WaMu. I now owe it to Chase, whom has decided that because my account is 8 months deliquent it should be sent to collections.

What a load, plus I bet your credit has been dinged accordingly.

 

[Craig234]

I'll call any 'free market' right-winger a hypocrite who condemns the Credit Card company practices - because they want to have their cake and eat it too, espousing a harmful ideology that results in exactly the sort of practices the CC companies are doing - but when they're affected they want to get to whine about it. Sorry, to let them get away with that would be to gut the argument against their 'free market' ideology, pretending that it doesn't cause the problems it causes.

It's a clear cut case that fits their ideology - no one holds a gun to the head of people to apply for credit cards, and if anything, the regulations are already too much for their ideology - while the CC companies can change the terms, they are required by law to announce the changes (I'm not sure how the line between 'publishing' them and mailing them is drawn), and they are required to give people a window to cancel the card.

That's more than enough 'consumer protection' by their ideology. Voluntary customers who are informed per the disclosure laws and can cancel anytime.

For them to get to complain, the price of admission is to admit they are on liberal ground, where the question is asked, 'how well is this working for consumers?'

It opens the door to ask whether there is a reasonable service meeting people's needs, and what regulation will help that happen for both sides - not to turn a blind eye to gouging.

It's like the people who insist there's no such thing as evolution, but then demand a swine flu vaccine for a virus that just came into existence through evolution. Which is it?

 

[BoberFett]

Originally posted by: Idiot234
I'll call any 'free market' right-winger a hypocrite who condemns the Credit Card company practices - because they want to have their cake and eat it too, espousing a harmful ideology that results in exactly the sort of practices the CC companies are doing - but when they're affected they want to get to whine about it.

Nothing hypocritical about free market proponents being against the rewriting of a contract at any time by only one party of the contract.

Contract law is extremely important in a free market, but I wouldn't expect your pea-brain to grok that.

 

[spidey07]

Originally posted by: Craig234
I'll call any 'free market' right-winger a hypocrite who condemns the Credit Card company practices - because they want to have their cake and eat it too, espousing a harmful ideology that results in exactly the sort of practices the CC companies are doing - but when they're affected they want to get to whine about it. Sorry, to let them get away with that would be to gut the argument against their 'free market' ideology, pretending that it doesn't cause the problems it causes.

It's a clear cut case that fits their ideology - no one holds a gun to the head of people to apply for credit cards, and if anything, the regulations are already too much for their ideology - while the CC companies can change the terms, they are required by law to announce the changes (I'm not sure how the line between 'publishing' them and mailing them is drawn), and they are required to give people a window to cancel the card.

That's more than enough 'consumer protection' by their ideology. Voluntary customers who are informed per the disclosure laws and can cancel anytime.

For them to get to complain, the price of admission is to admit they are on liberal ground, where the question is asked, 'how well is this working for consumers?'

It opens the door to ask whether there is a reasonable service meeting people's needs, and what regulation will help that happen for both sides - not to turn a blind eye to gouging.

It's like the people who insist there's no such thing as evolution, but then demand a swine flu vaccine for a virus that just came into existence through evolution. Which is it?

I will try to respond honestly to your post as best I can.

Free-Market belief does not equal financial anarchy as you paint it. There must be some controls, and I believe in those light controls on what you can and cannot do to prevent financial anarchy.

LK outlined some sound principles to force CC companies to adhere to the same practices (again, by law or by competition) on every other line of credit I have used.

So, in my ignorant ass, what is the freaking difference between the two? An open line of credit and a credit card? What is the damn difference? I have an open line of credit with my bank, not secured. What the hell is the difference?

 

[JSt0rm]

I had a chase card that I retired and threw in a shoebox. I was on paperless statements and always made my payments on time. About a year later I received a call from a debt collector looking for over $500. I did some research and some how some women in NH used my cc number to make some weird purchase for $18. Chase never once sent me anything because I was on online statements that I never checked anymore because the card was zeroed out. It took me a couple days but they forgave all the debt.

 

[Bitek]

Originally posted by: Skoorb
Probably a lot of good stuff here, but ultimately the best way to avoid getting screwed by CCs is to not use them. I am now only using mine for online purchases, otherwise nothing whatsoever. They are a sham and game, basically.

Realize that these reforms only do what a person can do by themselves; namely, they remove the person getting screwed by the CC, but they can do this themselves. Pay for everything with cash and start a savings account. Then, win.
...

Seems a bit of a disconnect there. You are not using them except for all the stuff you using them for? Namely, just a sample of things you have to have a CC for.

Obviously if you are using CCs luxuriously, then you should be expected to pay for those services. However, that's not an open invitation to fiscal rape.

 

[Phokus]

Originally posted by: spidey07

Originally posted by: Craig234
I'll call any 'free market' right-winger a hypocrite who condemns the Credit Card company practices - because they want to have their cake and eat it too, espousing a harmful ideology that results in exactly the sort of practices the CC companies are doing - but when they're affected they want to get to whine about it. Sorry, to let them get away with that would be to gut the argument against their 'free market' ideology, pretending that it doesn't cause the problems it causes.

It's a clear cut case that fits their ideology - no one holds a gun to the head of people to apply for credit cards, and if anything, the regulations are already too much for their ideology - while the CC companies can change the terms, they are required by law to announce the changes (I'm not sure how the line between 'publishing' them and mailing them is drawn), and they are required to give people a window to cancel the card.

That's more than enough 'consumer protection' by their ideology. Voluntary customers who are informed per the disclosure laws and can cancel anytime.

For them to get to complain, the price of admission is to admit they are on liberal ground, where the question is asked, 'how well is this working for consumers?'

It opens the door to ask whether there is a reasonable service meeting people's needs, and what regulation will help that happen for both sides - not to turn a blind eye to gouging.

It's like the people who insist there's no such thing as evolution, but then demand a swine flu vaccine for a virus that just came into existence through evolution. Which is it?

I will try to respond honestly to your post as best I can.

Free-Market belief does not equal financial anarchy as you paint it. There must be some controls, and I believe in those light controls on what you can and cannot do to prevent financial anarchy.

LK outlined some sound principles to force CC companies to adhere to the same practices (again, by law or by competition) on every other line of credit I have used.

So, in my ignorant ass, what is the freaking difference between the two? An open line of credit and a credit card? What is the damn difference? I have an open line of credit with my bank, not secured. What the hell is the difference?

Similarly, i believe there should be regulations for food, drugs, workplace safety, and other things which i believe are more important than credit card regulation. Oh but now that's socialism. But it's ok for you to decide what type of socialism we can have and which we can't because you're a republican. All while you yell at liberals for being socialists.