Rewarding bad behavior
And punishing good behavior. That seems to be the result of this credit card bill that congress is rushing into law. From AP:
Every American with a credit card will see sweeping changes in the market, with limits on sudden hikes in interest rates that drive consumers deeper into debt. Even cardholders who pay off their balance each month may face new annual fees or lose out on lucrative rewards programs.
Yup. People like my who maintain a credit card balance of $0 will have to pony up for the guy who bought three plasma TeeVees, a Wii, a PS3 and all that other stuff on credit that he can’t pay for. And this is awesome:
This cements a victory for every American consumer who has ever suffered at the hands of the credit card industry
That’d be senator Chris Dodd. It’s funny for a few reasons. One, if you suffer at the hands of a credit card company, it’s probably your fault. You signed a contract. You should honor. Next, it is funny because Dodd wants to give folks cushy credit arrangements, which is something is familiar with.
May 21st, 2009 at 9:54 am
Yes but the problem is that the contract that I had to sign in order to get a credit card states in the fine print that the CC company could change the interest rate on me at any time for any reason. That piece of the puzzle is bullshit. Imagine carrying a balance from month to month because the card had a “fixed” interest rate of 5%. Then the company increases that rate to 21% just because they can. If you do not have the means to pay off the balance right away you are stuck with an interest rate you did not agree to.
I am not talking about introductory interest rates. This happened to me with a card I had for YEARS at a 4 point something interest rate. Luckily I scraped together the money to pay it off. I was never late with a payment and ALWAYS put a large amount of money towards the balance each month.
And before people go on and on about not carrying a balance from month to month think of this. If you can get a credit card at a lower interest rate than you can get a personal loan why not use the CC as a “loan”. I am renovating my entire house and I used that CC as a line of credit to pay for materials. I know this does not make me the typical credit card user but my situation still sucked.
May 21st, 2009 at 9:56 am
Maybe. But you didn’t have to sign. And, obviously, some folks get into situations through no real fault of their own.
May 21st, 2009 at 10:36 am
Yeah. And if us who have a $0 balance cancel the cards to avoid the fees, it will hurt our credit score.
Oh fun.
May 21st, 2009 at 10:49 am
That piece of the puzzle is bullshit.
Maybe. But I call bullshit on that claim: every card contract I’ve read states that you do _not_ have to accept the new rate and can continue to make monthly payments at the old rate. The “catch”: you have to reject the rate increase and you have to stop using the card.
May 21st, 2009 at 10:56 am
More importantly, though, as a result of this bill passing (presuming the President signs it) is that we’ll be able to carry our guns in National Parks.
Silver lining and all that.
May 21st, 2009 at 2:01 pm
I haven’t used a credit card in 5 years. I haven’t had any sort of balance on any credit account in 2 years. I went from owing $42,000 in student loans and credit cards to completely debt free in 28 months, making $40,000/year.
I got married last year and paid cash for the wedding. I wrote a check for the car I bought last year, and for the car we just bought my wife. My credit score is….zero.
I can do all this because I live below my freaking means like a rational person, and no longer buy things with money I don’t have.
This legislation will not affect me in any way (except for park carry), though I suspect I’ll win a lot more converts now. Most people give me a deer in the headlights look when I ask them why they wouldn’t just use a debit card instead of credit if they pay the balance every month anyway.
May 21st, 2009 at 2:09 pm
i use one for the rewards. the amazon card rocks.
May 21st, 2009 at 2:45 pm
Wrong. Prices on daily goods will be effected to some degree by this legislation. Gov’t intrusions into the market affect everyone. By directly or indirectly effecting others you will be affected either positively or negatively. So far the track record of gov’t intrusions into free markets is about 99.9999999999% negative.
May 21st, 2009 at 3:32 pm
Keep in mind that the credit card industry lobbied congress hard and fast a few decades back in order to change the rules for unsecured credit so they could issue credit cards to anyone with a pulse (pulse optional). They also pushed businesses to accept credit cards as the defacto alternative to cash. They also gamed the system so you take a credit hit if you cancel a card. It has gotten so that it is hard to operate in this modern society without a credit card.
I have a real hard time feeling bad for an industry that whines about all the unpaid debt, and personal bankruptcies, and all that risk they have to assume, who then go out and give credit cards with $5K+ credit limits to people working at The Golden Arches Supper Club, or who are freshmen in college with no job at all.
Used to be that if an 18 year old with no credit wanted a credit card, it had to be secured.
May 21st, 2009 at 5:50 pm
You don’t have to sign, but access to credit is how you power the economy Uncle. I have credit card debt…and it ain’t from plasma TVs and toys. It’s from trying to run a business and a career in corporate sales.
Banks arbitrarily yanking my rate my shitty to straight up FUCK YOU makes it harder for me to be a consumer and to keep contributing to the economy.
Why are we so quick to blame the little guy? Banks didn’t have to extend credit to all those unworthy people…and now they’re trying to make up for it by fucking over people like me who pay their monthly bills and have tried to use credit responsibly.
May 21st, 2009 at 6:09 pm
And wizardpc, I call bullshit. With interest, you had to spend more than half your income on debt reduction (more, if you paid for that wedding in cash).
Which means you paid rent, power, gas, food, on less than $20000 before taxes (so what…$15K a year after taxes?)
Do you live with your parents? In a cardboard box? Eat old army MREs? Take public transit?
That’s nice and all…but guess what?
Even if that is the case, you weren’t doing much to stimulate the economy. Credit is what has powered the economy for the last 30 years…consumer spending is 2/3rds of the GDP.
I have no problem excoriating irresponsible spenders…but you also better go after the irresponsible banks that empowered them.
May 21st, 2009 at 9:28 pm
If you are paying off your cc bill every month, why not just switch over to AmEx? Granted the basic card costs about $45.00/year, but after that there are no late fees until you hit 45 days past due.
May 22nd, 2009 at 10:55 am
AmEx isn’t accepted everywhere
May 23rd, 2009 at 2:56 am
I have no credit cards. That means I cannot reserve a hotel room, a rental car, a flight (quit flying, anyway) or any number of internet transactions. I don’t care.It is not my job to stimulate the economy. It is my job to provide for my family. If the system were more honest, it wouldn’t be as difficult as it is, but I still don’t care. If it were more honest, others wouldn’t be trapped by the necessity of having credit cards to conduct their business or businesses.
If you all really want to correct it. Cancel all your cards. Every fucking one of them. Yeah! For a lot of you your lives will be more difficult, but only for a short while.
When airlines can no longer plan for expected capacity, when credit card companies and the banks who back them can no longer make realistic predictions of future income, when rental car companies must stare helplessly at full lots of unrented cars, you can bet your ass the system will be changed to accomodate the people who no longer need them.
May 23rd, 2009 at 3:00 am
I and others have experienced the phenomenom of being cancelled because the balance was paid every month. We were cancelled because we were “not the type of customer our company wishes to retain”. Read that as the type of customer who doesn’t spend $30,000 to pay off a $100 dollar bill.