Senate passes credit card overhaul bill

[RyanPaulShaffer]

Yes, the FICO deal is nothing but shenanigans. Let's see here...I close some accounts, which means that I am less likely to get into debt, and my credit rating becomes WORSE?! WTF? /boggle

 

[StageLeft]

Originally posted by: RyanPaulShaffer
???

I pay my entire balance every month. I never pay a cent of interest because I don't carry any debt on credit cards.

I'm confused...did you read my post?

Every time you buy something with your credit card there is a couple of % the merchant has increased is overall prices by to offset the middleman costs of dealing with a credit card merchant, so even if you pay no interest, those costs are given to either you or the merchant. You can guess which one. This is why a few merchants, like gas stations, do sometimes have different prices in cash or if paying in credit. The whole thing is a big joke.

I don't pay interest or annual fees, and I enjoy the perks, which have totaled into the thousands for me over the years

Again, how do you think your credit card company is able to give you these perks and trivial bonus points and awards? You are not making them as much as people who continually rack up fees, but you are making them something.

The problem is you need to keep a relatively high limit of credit cards because they are factored heavily into your FICO score, which is used to set rates on insurance, mortgages, etc.

Currently, yes. If credit cards were slashed way down in usefulness, they would end up having less of a meaningful impact on FICO.

Negative. Debit cards are a good way to find yourself penniless while you try to convince your bank that those charges aren't yours.

It can be a risk. It's really a damn shame there's no truly safe way to pay with actual cash I've earned.

You could be a multi-millionaire who pays cash for everything, and have an average FICO score. You could have several credit cards with tiny balances that you pay off monthly and have an average FICO score.

And if you were like this, what do you really need a good FICO score for anyway? Just hold a couple of credit cards and use them once in a blue moon. My wife quite quickly got to a high 700's score with a single car loan and a card or two that she barely used. The only thing you'd need a FICO for is a mortgage and having a mid/high 700s, tier a credit rating is extremely easy, to be honest with you: hold a couple of loans for several years, never, ever get late on one, and Bob's your uncle. That's how my wife and I got ours! You do not need a constant debt level. Paid off debt like a car will linger on your report, for the positive, for a few years. Use your CC every 6 months, let it cycle through, then pay it off, and it will prop your credit score up, too.

 

[Mursilis]

Originally posted by: Skoorb
Every time you buy something with your credit card there is a couple of % the merchant has increased is overall prices by to offset the middleman costs of dealing with a credit card merchant, so even if you pay no interest, those costs are given to either you or the merchant. You can guess which one. This is why a few merchants, like gas stations, do sometimes have different prices in cash or if paying in credit. The whole thing is a big joke.

I don't pay interest or annual fees, and I enjoy the perks, which have totaled into the thousands for me over the years

Again, how do you think your credit card company is able to give you these perks and trivial bonus points and awards? You are not making them as much as people who continually rack up fees, but you are making them something.

While of course you're right, it's not like the majority of merchants are going to cut me a discount if I use cash vs. a credit card. Thus, I'm really not going to save anything if I opt for cash alone (and thus forfeit any rewards). If merchants actually began to offer discounts for cash, I'd use cash.

 

[spacejamz]

Originally posted by: RyanPaulShaffer

Originally posted by: spacejamz

Originally posted by: Mursilis
I'm confused as well, because I'm like this poster - I don't pay interest or annual fees, and I enjoy the perks, which have totaled into the thousands for me over the years. I would really hate to stop using credit cards and subsidizing all of these bastards who cannot pay their bills.

Fixed...

Uhhh...double WTF towards the "Fixed".

We don't pay fees or interest...how are we subsidizing people? The minute the card companies try to make us pay fees or interest that we shouldn't pay, we'll ditch them in a heartbeat.

Some of the posts in this thread seriously make me boggle.

We don't pay fees or interest YET...When this goes into effect, the credit card companies are going to be losing revenue because of this. You honestly don't think they will find alternate ways to make up this revenue in other ways (start charging annual fees again, charging interest immediately)???

Hate to break this to you, but not everyone in the USA is like all the posters here who can get by with paying cash for everything. Besides, how are you gonna book that flight, reserve a hotel/rental car or buy something from Amazon?

you wanna trust your debit card tied your checking account for all your credit card needs? hope you never have any fraudlent charges you need to contest because that money is gone until everything is sorted out, which might take a few weeks...but then again, this AT where everyone has several checking accounts with $100,000 balances, so that shouldn't be a problem...

 

[RyanPaulShaffer]

Originally posted by: spacejamz

Originally posted by: RyanPaulShaffer

Originally posted by: spacejamz

Originally posted by: Mursilis
I'm confused as well, because I'm like this poster - I don't pay interest or annual fees, and I enjoy the perks, which have totaled into the thousands for me over the years. I would really hate to stop using credit cards and subsidizing all of these bastards who cannot pay their bills.

Fixed...

Uhhh...double WTF towards the "Fixed".

We don't pay fees or interest...how are we subsidizing people? The minute the card companies try to make us pay fees or interest that we shouldn't pay, we'll ditch them in a heartbeat.

Some of the posts in this thread seriously make me boggle.

We don't pay fees or interest YET...When this goes into effect, the credit card companies are going to be losing revenue because of this. You honestly don't think they will find alternate ways to make up this revenue in other ways (start charging annual fees again, charging interest immediately)???

Hate to break this to you, but not everyone in the USA is like all of ATOT who can get by with paying cash for everything. Besides, how are you gonna book that flight, reserve a hotel/rental car or buy something from Amazon?

Oh so you were being sarcastic...

Still, I clearly stated that if they try and pull shenanigans with my cards, I will drop them and find another company that won't milk the good customers to subsidize the bad.

I think we had a misunderstanding.

 

[jpeyton]

Originally posted by: spacejamz
you wanna trust your debit card tied your checking account for all your credit card needs?

I can and do every single day.

It sounds like the credit card companies have you hooked on their product like a meth dealer.

 

[spacejamz]

Originally posted by: jpeyton

Originally posted by: spacejamz
you wanna trust your debit card tied your checking account for all your credit card needs?

I can and do every single day.

It sounds like the credit card companies have you hooked on their product like a meth dealer.

Wait until you have fraudelent charge that you need to contest. Your bank puts a hold on any disputed funds until the matter is sorted out, which may take awhile

At least on a credit card, you are only liable for $50 and you don't lose immediate access to the funds in your checking account.

That is unless your bank is different...Let me know if they treat disputed funds from your debit card in the same manner as a credit card and I will sign up...

 

[jpeyton]

Originally posted by: spacejamz
That is unless your bank is different...Let me know if they treat disputed funds from your debit card in the same manner as a credit card and I will sign up...

Text

Get greater defense against theft, loss, or unauthorized use of your consumer cards. Total Security Protection is a free check card protection service and automatically available for all Bank of America consumer credit cards and check cards.
Check Card Security Features

* Zero Liability. If your card is lost or stolen, Bank of America reimburses you for any unauthorized card transactions up to the amount of the loss, when reported within 60 days from statement date.
* Guaranteed credit. Your account will be credited by the end of the next business day for unauthorized transactions if your card is lost or stolen.

 

[daveymark]

Originally posted by: jpeyton

Originally posted by: spacejamz
That is unless your bank is different...Let me know if they treat disputed funds from your debit card in the same manner as a credit card and I will sign up...

Text

Get greater defense against theft, loss, or unauthorized use of your consumer cards. Total Security Protection is a free check card protection service and automatically available for all Bank of America consumer credit cards and check cards.
Check Card Security Features

* Zero Liability. If your card is lost or stolen, Bank of America reimburses you for any unauthorized card transactions up to the amount of the loss, when reported within 60 days from statement date.
* Guaranteed credit. Your account will be credited by the end of the next business day for unauthorized transactions if your card is lost or stolen.

same thing with chase.

Text

I used a debit card to purchase a barbones system. Seller never shipped, I filed a dispute with the bank, they placed the funds back in my account the next day while they investigated.

of course, now I never use debit cards, but only because the rewards are better on credit cards.

 

[spacejamz]

Originally posted by: jpeyton

Originally posted by: spacejamz
That is unless your bank is different...Let me know if they treat disputed funds from your debit card in the same manner as a credit card and I will sign up...

Text

Get greater defense against theft, loss, or unauthorized use of your consumer cards. Total Security Protection is a free check card protection service and automatically available for all Bank of America consumer credit cards and check cards.
Check Card Security Features

* Zero Liability. If your card is lost or stolen, Bank of America reimburses you for any unauthorized card transactions up to the amount of the loss, when reported within 60 days from statement date.
* Guaranteed credit. Your account will be credited by the end of the next business day for unauthorized transactions if your card is lost or stolen.

Looks like I stand corrected...I do wonder when they implemented this though. It is definitely in the wake of all the identify theft and stolen credit data problems we have read about. I have had friends as recently as January of this year had holds placed on their accounts while the matter was sorted, but not sure where they banked...

 

[daveymark]

My dispute with chase happened 5 years ago, not sure how long other banks have been doing it

 

[Thump553]

Originally posted by: Mursilis
While of course you're right, it's not like the majority of merchants are going to cut me a discount if I use cash vs. a credit card. Thus, I'm really not going to save anything if I opt for cash alone (and thus forfeit any rewards). If merchants actually began to offer discounts for cash, I'd use cash.

Basically the merchants are PROHIBITED from giving you a discount for paying cash-sometimes by statute (guess which lobbyists were behind that bit of "consumer protection") or by the master agreement the merchant signed with it's credit card processor, or both.

It took a special act of our state legislature last summer to permit gas stations to give you a discount for paying cash.

 

[BoberFett]

Originally posted by: Special K

Originally posted by: jpeyton

Originally posted by: BoberFett

Originally posted by: Skoorb

If I start getting charged interest immediately or annual fees, my credit cards all get cut up. I'll go back to checks. Pissing off the impatient assholes in line behind me because it takes 10 extra seconds to write a check will just be a perk.

Use debit, I use it for all now.

Negative. Debit cards are a good way to find yourself penniless while you try to convince your bank that those charges aren't yours.

You're half correct; running your debit purchases as debit transactions (with a PIN) isn't ideal.

You can run any debit purchase as credit (with a signature) and you're protected like any credit card.

Although debit cards with a VISA/MC logo afford consumers the same protection as a real CC, the problem is that the funds are immediately withdrawn from your bank account and are gone until you get everything sorted out with your bank. This can lead to overdraft and late fees for any bills that are normally paid out of your bank account.

At least with the CC, you never have to actually pay for any of the fradulent charges.

Precisely. The problem isn't that the charges will never be cleared up. The problem is that while they're being cleared up, you're racking up other fees because some crook cleaned out your checking account.

Then after you have the original fraudulent charges cleared up you have to back and try to clean up the mess that was created while you were cleaning up the other mess.

Trust me, I had this happen a number of years ago and I will never forget it. Debit cards are horrible.

 

[jpeyton]

Originally posted by: BoberFett
Precisely. The problem isn't that the charges will never be cleared up. The problem is that while they're being cleared up, you're racking up other fees because some crook cleaned out your checking account.

Then after you have the original fraudulent charges cleared up you have to back and try to clean up the mess that was created while you were cleaning up the other mess.

Trust me, I had this happen a number of years ago and I will never forget it. Debit cards are horrible.

Text

Get greater defense against theft, loss, or unauthorized use of your consumer cards. Total Security Protection is a free check card protection service and automatically available for all Bank of America consumer credit cards and check cards.
Check Card Security Features

* Zero Liability. If your card is lost or stolen, Bank of America reimburses you for any unauthorized card transactions up to the amount of the loss, when reported within 60 days from statement date.
* Guaranteed credit. Your account will be credited by the end of the next business day for unauthorized transactions if your card is lost or stolen.

Another novel idea is called having multiple checking accounts. My bank will give me as many separate accounts as I want.

If I really wanted to, I could open up one for every day of the week. But for simplicity's sake I have two: one linked to my debit card for purchases, and one for regular monthly expenses (mortgage, utilities, insurance). Through the magic of online banking, I have unlimited transfers, automatic monthly bill-pay, automatic account alerts, etc.

Credit cards are a product, not a vital piece of your financial foundation.

 

[fornax]

Originally posted by: jpeyton
It sounds like the credit card companies have you hooked on their product like a meth dealer.

You have it all backwards. I (and many other smart CC holders) have the CC companies hooked up.

I travel to Europe nearly every year for free (well, I do pay about $150 in annual fees and taxes), past 6 years once to Chile and twice to Australia, not to mention extended warranties, damage/theft protection (which I have used several times), pure cash back (to the tune of ~ $400-$600 per year), discounted gift cards, and much more. All that for exactly zero cost to me (except the annual fees on the mileage cards).

So you hold on tight to your debit card, but please don't think that it is the best or smartest thing to do. It might be the best approach in your circumstances, but hardly in someone else's.

Now, it is possible that the CC companies will attempt to institute annual fees, reduce or eliminate rewards, etc., but I doubt it would last very long, if at all. With hundreds of issuers of vanilla MC/Visa cards there will be a lot of competition for the 1%-2% steady income and the occasional 10%-15% interest charges (when the banks can borrow at virtually no cost from the Fed).

 

[BoberFett]

Originally posted by: jpeyton
Credit cards are a product, not a vital piece of your financial foundation.

Correct, they're a convenience. Once the convenience is gone I will discontinue their use and go back to checks and cash. Not debit cards.

 

[jpeyton]

Originally posted by: fornax
Now, it is possible that the CC companies will attempt to institute annual fees, reduce or eliminate rewards, etc., but I doubt it would last very long, if at all. With hundreds of issuers of vanilla MC/Visa cards there will be a lot of competition for the 1%-2% steady income and the occasional 10%-15% interest charges (when the banks can borrow at virtually no cost from the Fed).

Kudos for actually approaching the situation with sound judgment. You're one of the few people smart enough to realize you can exercise your power as a consumer anytime and pick a credit card offering the best terms.

My comment was directed at the Chicken Littles who are whining about the "big bad gubberment takin away my perks" at every idle moment.

 

[Phil21]

I had a very long response written, but realized it was pointless.

Basically it comes down to this for me.

If a credit card company says "hi! I want to give you a loan for 200% APR!" and some idiot takes it, then they got what they deserved.

If a credit card company says "hi! I want to give you a loan for 6%* APR" (*) Please don't read our fine print which actually means you'll be paying 200% interest 6 months from now for something completely inconsequential to the spirit of this agreement - then I have a huge problem with that.

Basically, be up-front with what you provide and what you charge. It sounds trite, but not many people can actually truly understand that fine print. Really. I didn't believe it either, but after helping a few dozen folks read through these agreements - the average consumer *truly* does not understand them, even otherwise intelligent people. People are in general very trusting, and figure a "big company" couldn't possibly be out to fuck them. How wrong they are.

Playing the stupid games they do is absolute bullshit. Give your terms up-front, and stick to them. Period. Make them clear, and do not play underhanded games to try to boost your profit margin. If people still get into trouble at that time, then I have no compassion for them. But for now, I could care less if the credit card companies get legislated into oblivion. They made their own bed with their unlimited greed.

 

[BoberFett]

Good post Phil.

 

[StageLeft]

Originally posted by: Mursilis
While of course you're right, it's not like the majority of merchants are going to cut me a discount if I use cash vs. a credit card. Thus, I'm really not going to save anything if I opt for cash alone (and thus forfeit any rewards). If merchants actually began to offer discounts for cash, I'd use cash.

I hope it comes to that. Recently I read (last week) how a couple of senators are looking into this, to make it easier for merchants to offer that.

Hate to break this to you, but not everyone in the USA is like all the posters here who can get by with paying cash for everything. Besides, how are you gonna book that flight, reserve a hotel/rental car or buy something from Amazon?

Because of their own correctable failings. There is simply no reason for the average person in the richest country in the world to be constantly living hand to mouth. Not only is there no reason, it's downright pathetic. Now, for online bookings, definitely credit is the way to go for that. If interest starts getting charged immediately, my credit card company will see me pay it immediately off after, and they can pay the nominal bank draft fee each time. I think some CCs have a limit of maybe 3/month, so perhaps you need a couple.

There are some risks with debit cards, but they can be managed. Like jpeyton, I really ought to get a second account and use it for all of my daily stuff. I may be playing with fire using my primary account for everything at the moment.

 

[Via]

I ran up over 9000 on a credit card (WaMu) my first three years out of college establishing myself and my business. The charges were mostly fuel and auto expenses (I would say 90%).

When my feet were finally on the ground I stopped using the card and started paying it off as best I could. Within 2 years or so I was down to $5500 and felt like I was on the right track.

And that's when they raised my rate from 7.9% to 33% for "account inactivity". I'm not making this shit up; I'm one of the horror storys you read about. I tried for weeks to get my rate reduced but they refused to budge. They figured they had me over a barrel, I guess.

I was lucky enough to be able to transfer the entire balance to a Chase card using a balance transfer offer.

There is no defense for these kinds of busines practices.

None. Zero.

 

[Thump553]

Via: I thought I had heard of every trick in the book that credit card companies pull, but that "account inactivity" is new to me. I can't think of any rational reason for it, except to try to push those back who are trying to dig themselves out of a financial hole.

Given cynical ploys like that, it's amazing that the bank's campaign contributions were able to outweigh public sentiment for so long in the halls of Congress.

 

[RightIsWrong]

Originally posted by: Slew Foot

Originally posted by: spacejamz

Originally posted by: loki8481

Originally posted by: spacejamz
Heard about this on the drive into work this morning...The credit card companies are just gonna find different ways to make up any lost revenues...

Some possibities include:

charging annual fees again
reducing credit card benefits
charging interest immediately instead of offering a grace period

Guess we will wait and see what happens...

all it seems to amount to is people with good credit who pay their bills on time getting screwed to subsidize people with bad credit.

that was the general consensus of the story as well...forgot to include that...

Damn straight, once again the smart and responsible get to pay for the idiots that fucked everything up

I'm guessing that you mean the leaders of the credit card companies? After all, they were the idiots that fucked it up by sending out pre-approvals to dead people and pets to try to squeeze out a buck and in the process also gave credit to those that were less than worthy of it.

But let's not concentrate on the greed, stupidity and lunacy of those that perpetrated the crisis...it's the deadbeats' fault!!!

 

[LegendKiller]

Originally posted by: Phil21
I had a very long response written, but realized it was pointless.

Basically it comes down to this for me.

If a credit card company says "hi! I want to give you a loan for 200% APR!" and some idiot takes it, then they got what they deserved.

If a credit card company says "hi! I want to give you a loan for 6%* APR" (*) Please don't read our fine print which actually means you'll be paying 200% interest 6 months from now for something completely inconsequential to the spirit of this agreement - then I have a huge problem with that.

Basically, be up-front with what you provide and what you charge. It sounds trite, but not many people can actually truly understand that fine print. Really. I didn't believe it either, but after helping a few dozen folks read through these agreements - the average consumer *truly* does not understand them, even otherwise intelligent people. People are in general very trusting, and figure a "big company" couldn't possibly be out to fuck them. How wrong they are.

Playing the stupid games they do is absolute bullshit. Give your terms up-front, and stick to them. Period. Make them clear, and do not play underhanded games to try to boost your profit margin. If people still get into trouble at that time, then I have no compassion for them. But for now, I could care less if the credit card companies get legislated into oblivion. They made their own bed with their unlimited greed.

This is a very good point. I don't really have a problem with people getting into their own problems. However, when the CC companies keep changing the rules of the game, creating open-ended "contracts" on their side while locking people in with the BRA(2005) with completely closed CONTRACTS on the consumer side, it is very one-sided and disingenuous.

If you look back at my posts on this subject, any of the the items I discuss that should be banned are these types of changes. Changing payment dates, universal defaults, 1+ day delinquencies causing default prices, changing interest rates going up 2-3x on the fly, changing late fees, "courtsey" over limits, over-limit fees...etc.

It's all bullshit and they should be shut down from doing this.