This is a step in the right direction but why does it take a year and half before the rules go into effect?
12-18-2008
Credit card rule to curtail 'unfair' practices kicks in mid-2010
Credit card rule to curtail 'unfair' practices kicks in mid-2010
Consumers will be shielded from increases in interest rates on existing account balances on their credit cards under new rules being adopted by federal regulators.
The changes will allow credit card companies to raise interest rates only on new credit cards and future purchases or advances, rather than on current balances.
The new rules coming Thursday from the Federal Reserve and other banking regulators mark the most sweeping clampdown on the credit card industry in decades, aimed at protecting consumers from arbitrary hikes in interest rates or inadequate time provided to pay the bills.
Most of the rules were first proposed in May and drew more than 65,000 public comments ? the highest number ever received by the Fed. They also restrict such lender practices as allocating all payments to balances with lower interest rates when a borrower has balances with different rates.
The new rules prohibit:
_Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.
_Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.
_Unfairly computing balances in a computing tactic known as double-cycle billing.
_Unfairly adding security deposits and fees for issuing credit or making it available.
_Making deceptive offers of credit.
The so-called subprime cards for people with low credit scores typically have no more than a $500 credit limit but require a large upfront fee.
The rules 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.
12-18-2008
Credit card rule to curtail 'unfair' practices kicks in mid-2010
Credit card rule to curtail 'unfair' practices kicks in mid-2010
Consumers will be shielded from increases in interest rates on existing account balances on their credit cards under new rules being adopted by federal regulators.
The changes will allow credit card companies to raise interest rates only on new credit cards and future purchases or advances, rather than on current balances.
The new rules coming Thursday from the Federal Reserve and other banking regulators mark the most sweeping clampdown on the credit card industry in decades, aimed at protecting consumers from arbitrary hikes in interest rates or inadequate time provided to pay the bills.
Most of the rules were first proposed in May and drew more than 65,000 public comments ? the highest number ever received by the Fed. They also restrict such lender practices as allocating all payments to balances with lower interest rates when a borrower has balances with different rates.
The new rules prohibit:
_Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.
_Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.
_Unfairly computing balances in a computing tactic known as double-cycle billing.
_Unfairly adding security deposits and fees for issuing credit or making it available.
_Making deceptive offers of credit.
The so-called subprime cards for people with low credit scores typically have no more than a $500 credit limit but require a large upfront fee.
The rules 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.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
Most of them irrelevant to responsible individuals. None of these rules are secret. All this amounts to is making a deal with the devil and then pleading to God to help you get out of what you knew, lucidly, the terms were.
The best way to get out of these things is to limit use of credit cards altogether. They are instruments that many adults are not adult-enough to use responsibly, so they whine to the government to let them change the contract.
You know, I keep hearing about how so many businesses over seas which are taking up these outsourced contracts are aggressively raising their prices. They are coming to realize that a lot of business plans here in America rely very heavily on the cheap outsourced labor prices and would not be able to hold themselves up without it unless they took some extreme measures. As a result, they are requiring much higher wages since they have realized that they are necessity in demand.
I don't think America's rabid outsourcing strategies are going to last forever. It will always be here, but I don't think it will be as big as it is currently. The rest of the world is greedy too and they won't allow it. That plus I wouldn't be surprised if someday we see some high taxes being placed on businesses that choose to outsource in effort to keep work in America. You never know.
Baby steps Skoorb.
These rules are a good thing no matter how you slice it. If everyone were that responsible, we would hardly need government at all but that will forever be a pipe dream.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
I won't pretend their business practices are "nice"; they aren't, this is why people should be careful with the exposure they have with a company that they've contractually agreed to give reign over the interest rate of often substantial amounts of money.
I agree, but the common argument of "people should just be more responsible" is one that is older than both your age and my age combined. Don't ever expect it to change because it won't. All we can do is hope that our government does what is necessary to isolate the problem overall. However, there is only so much they can do since we all live under the same roof and the same national and global economy.
In the case of these regs, no one really gets a short end of the stick so I am all for it. Technically I suppose one could try and argue that the CC companies get that short end, but remember that these companies have the power to refuse a CC to anyone and that handing one out is part of the risk of business. Therefore, I don't really count it as a short end. If anything, these rules are just one step closer to influencing the CC companies to be a little more strict about who they hand a CC to and that is something I think both you and I can agree is a good thing right?
I just wish they were not allowed to continuously resell that debt from company to company to company. In the process, it resets the 7 year rule on one's credit report btw. That would make a big difference imo. They should only be allowed to sell it once or twice I think.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
So, we must treat them like children? If that is what you are saying, i can get aboard that train; plenty of adults do need to be coached like a bad child to do the right thing and when they still cannot they need options taken away from them to limit the damage, that's really all these CC revisions amount to.
The theoretical short end is that the CC companies will make less money and thus will be forced to recoup that by other means--perhaps raising interest rates for everybody. I'm not really all that opposed, since I think the prudent adult should strive to, as soon as possible, get off CCs entirely.
If the 7 years can be rest by moving debt, that is indeed a practice that should be summarily stopped.
Nah, I wouldn't worry so much about everyone's rates going up. The CC industry is far too cut throat and competitive for that to happen. Just look at the history of their business practices. They are constantly trying to offer the consumers reasons to use their CC instead of the other guy's CC. Hell, I get junk mail offering me stuff like that pretty much every day of the week as I am sure you do as well. Therefore, they have very little flexibility to raise rates on everyone because as soon as one company tries to do that you will see the rest undercutting that company to try and steal their business. We see that kind of thing all of time in that industry.
In regards to the 7 years thing, it is actually worse that you might imagine. I recently discovered that some of these companies have found exploits which allow them to essentially resell the debt to themselves in order to reset the 7 year rule. It is really fucked up and I wish the government would fix those problems. It completely destroys the idea that people can make mistakes, but have the opportunity to recoup through more fiscal responsibility over time. Thanks to these kinds of practices, there is little to no reason to try and recoup if you are already that far into debt. People might as well forever ignore those calls and collection letters since there is almost no hope for recovery anyways. The choice between putting food on the table and paying the debt off is a simple choice to make.
As far as the responsibility thing is concerned, I really wish there was something more we can do but we can't unfortunately. The government cannot make people become more responsible. Pulling the ground out from beneath people's feat does not make them more responsible. All it does is make them fall more often and harder. From there, they either get picked up by Uncle Sam or they resort to doing whatever it is they need to get by which often means stealing and other forms of crime once you get beyond a certain point. Trust me. I hate it too. It is a vicious cycle and there is little we are willing to do to try and reduce it because people hate the idea of spending more money in effort to try and fix those problems. I can't say I blame them either but the other option is to do nothing so...
Uhhhh get a new CC and transfer that balance. Why are you allowing your debt to remain on that card with all of the offers out there?
Be late or miss just once and see what happens.
It's called Universal Default.
Miss or late on one and they all jack up the rate to 32%
Come on AT High Rollers, you're all rolling in dough, it hit those Casinoa and single handedly save thousands of jobs
12-18-2008 Casino industry's luck has run out
ATLANTIC CITY, N.J. ? Juan Jimenez's job at the casino wasn't the most glamorous one in the place.
But picking up cigarette butts, vacuuming dirt from carpets and shampooing stains from spilled drinks (and other, much worse substances) allowed him to bring his family from the Dominican Republic, buy a small house and claim a tiny slice of the American Dream.
In October, his luck ran out.
After 15 years at Bally's, Jimenez was laid off, joining thousands of other casino employees in Atlantic City, Las Vegas and other hotspots around the country whose jobs have been eliminated in recent months because people are gambling less in this recession.
"This Christmas is going to be a lot like the first Christmas I had in this country," said the 62-year-old Jimenez. "I didn't have a job, I didn't have any money, no anything. The only difference is now I have a mortgage and bills."
Atlantic City has been hit particularly hard; this will be the second straight year of declining casino revenue after 28 consecutive years of increases.
Last month, the city's most successful casino, the Borgata, laid off 400 employees. The four casinos run here by Harrah's Entertainment laid off several hundred earlier this year, and still more layoffs took place at Resorts Atlantic City.
"We've had downturns before, but we've never seen anything like this," said Donna DeCaprio, secretary-treasurer of UNITE-HERE Local 54, the union that represents casino cleaning staffs, food-and-drink workers and other employees.
In Las Vegas, about 6,000 union employees have been laid off or had hours reduced, according to the culinary workers union, which is bracing for more cutbacks.
Mississippi's 30 casinos on the Gulf Coast and the Mississippi River are coping not only with the national recession, but with the effects of hurricane-related closings in September.
Connecticut's two huge Indian-run casinos, Foxwoods and Mohegan Sun, have seen slot machine revenue fall 5 to 7 percent, and have eliminated more than 1,300 jobs through layoffs and attrition over the past year.
James Howard spent 14 years as a food and beverage worker at the Atlantic City Hilton Casino Resort before being laid off last week.
"I didn't have any idea this was coming," said the 54-year-old Howard. "It's very upsetting. Each year at Christmas, we would have parties to celebrate the season. This year, we're trying to figure out where our next meal is coming from. It's like this all over the city."
In between trips to the unemployment office, Howard has looked ? unsuccessfully ? for jobs stocking shelves at stores in between trips to the unemployment office. He and his wife have already burned through their meager savings and are grateful their landlord has been understanding about late rent. But they know that won't last forever.
Howard will be giving his wife only one present for Christmas this year.
"My love," he said. "That's about it. They can't take that from me."
12-18-2008 Casino industry's luck has run out
ATLANTIC CITY, N.J. ? Juan Jimenez's job at the casino wasn't the most glamorous one in the place.
But picking up cigarette butts, vacuuming dirt from carpets and shampooing stains from spilled drinks (and other, much worse substances) allowed him to bring his family from the Dominican Republic, buy a small house and claim a tiny slice of the American Dream.
In October, his luck ran out.
After 15 years at Bally's, Jimenez was laid off, joining thousands of other casino employees in Atlantic City, Las Vegas and other hotspots around the country whose jobs have been eliminated in recent months because people are gambling less in this recession.
"This Christmas is going to be a lot like the first Christmas I had in this country," said the 62-year-old Jimenez. "I didn't have a job, I didn't have any money, no anything. The only difference is now I have a mortgage and bills."
Atlantic City has been hit particularly hard; this will be the second straight year of declining casino revenue after 28 consecutive years of increases.
Last month, the city's most successful casino, the Borgata, laid off 400 employees. The four casinos run here by Harrah's Entertainment laid off several hundred earlier this year, and still more layoffs took place at Resorts Atlantic City.
"We've had downturns before, but we've never seen anything like this," said Donna DeCaprio, secretary-treasurer of UNITE-HERE Local 54, the union that represents casino cleaning staffs, food-and-drink workers and other employees.
In Las Vegas, about 6,000 union employees have been laid off or had hours reduced, according to the culinary workers union, which is bracing for more cutbacks.
Mississippi's 30 casinos on the Gulf Coast and the Mississippi River are coping not only with the national recession, but with the effects of hurricane-related closings in September.
Connecticut's two huge Indian-run casinos, Foxwoods and Mohegan Sun, have seen slot machine revenue fall 5 to 7 percent, and have eliminated more than 1,300 jobs through layoffs and attrition over the past year.
James Howard spent 14 years as a food and beverage worker at the Atlantic City Hilton Casino Resort before being laid off last week.
"I didn't have any idea this was coming," said the 54-year-old Howard. "It's very upsetting. Each year at Christmas, we would have parties to celebrate the season. This year, we're trying to figure out where our next meal is coming from. It's like this all over the city."
In between trips to the unemployment office, Howard has looked ? unsuccessfully ? for jobs stocking shelves at stores in between trips to the unemployment office. He and his wife have already burned through their meager savings and are grateful their landlord has been understanding about late rent. But they know that won't last forever.
Howard will be giving his wife only one present for Christmas this year.
"My love," he said. "That's about it. They can't take that from me."
Bad idea. Credit cards with long histories and somewhat active use look good on your credit report. Just make a couple purchases every few months and pay them off right away.
You can just use an Amex charge card then, which forces you to pay it off every month.
Still looks the same on your credit report, which is worthless now days anyway. FICO score matters very little for loan approval, all that matters is AGI.
Still looks the same on your credit report, which is worthless now days anyway. FICO score matters very little for loan approval, all that matters is AGI.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
Yeah it sucks, credit cards are overall a detriment to society in general, I think. They do have benefits, but I think that they encourage an appetite for consumerism that does this culture a disservice.
Yikes, 15 years of steady employment and no savings or anything? Fail.
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