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Credit Card Reform and You

Credit Card Reform and You

This summer, the U.S. Congress passed — and President Obama signed — sweeping credit card reform legislation to curb credit card company abuses and protect consumers. 

According to Consumers Union, the average credit card debt for low and middle income families is $8,650. These families have been prime targets for the predatory credit card industry, which raked in a staggering $18 billion in profit in 2006. The top credit card companies routinely raise interest rates on existing balance on an “any time, any reason” basis, charge exorbitant fees for any and every infraction, however minor, apply payments to low-rate balances before high-rate balances to maximize interest charges and more. These reforms are long overdue.

What does this reform legislation mean to you?

  • No more late fees because your bill was sent too late for you to pay in time.
  • Forty-five days advance written notice of changes in significant terms on the account.
  • The right to reject the new terms (your card company then has the right to cancel your account and require pay-off under your old terms).

The rest of the reforms go into effect in February, including an end to retroactive rate increases in most cases. Read more from Consumers Union.

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12 comments

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9:13AM PDT on May 21, 2011

history of credit cards
http://historyofcreditcards.blogspot.com

9:12AM PDT on May 21, 2011

oh man
Your words are true

4:58PM PDT on Apr 15, 2011

thk for info

8:41AM PST on Nov 30, 2010

These measures taken by the government do not go far enough. The rates charges by credit card companies are CRIMINAL. Too many people do not understand the small print and once Banks get their GREEDY hooks into you it lasts a life time. Paying it off becomes next to impossible with the cost of living always going up and the wages staying the same! I hate CREDIT CARDS. CITI (shitty) bank is the worst---just look at all the bad paper they wrote in the mortgage crisis and to think they were bailed out with tax payers money! Just sickening! Shame on our governments protecting these crooks!

5:47AM PST on Jan 25, 2010

I support the President but I'm very disappointed at the way he is handling the credit card crisis. He bailed out banks at 1/2 percent while they continued to raise our rates to 27% and above. He could have and should have attached strings. The banks should have been required to pass the 1/2 percentage rate down to us, the consumers who elected the president, as a condition for receiving bail out money.

Furthermore, the new legislation has no teeth, in that it doesn't require banks to lower our rates. It merely requires them to give us notice before they screw us. Therefore, for most Americans, it will not lower our monthly payments, nor give any kind of real relief. So, aside from the notice requirement, it will be business as usual.

Finally, banks were given several months to comply with the new legislation. Instead of doing that, they've used this time to raise our rates and decrease our credit limits, while they still can. Notably, they done this at a time of crisis, when many people are out of work and struggling, and,therefore, need credit. When I pointed this out to an executive at Citi card, his response was, "its not prohibited."

7:19PM PST on Jan 17, 2010

Living on credit is a huge mistake. The moment you borrow, you've sold your life to an unscrupulous bunch of criminals who are never satisfied with their billions and just want more and more, at the cost of you, the consumer, without a single breath of remorse.
These people are the cause of all misery in the world today, they do not care about the human, wildlife and environmental cost, so long as they can live their flawed lifestyle. They are the very reason why a 6.8 billion world population lives on borrowed time. They are the reason why millions upon millions of people throughout the world live in abhorrent, war torn, poverty, famine and disease stricken conditions. The money lending business is flawed, corrupt and criminal; it is a product of a system of greed and selfishness which has no regard for Life and is supported by all governments around the world on the premise of power which will ultimately end up in the hands of a mere few aiming to implement control over humanity by all measures at their disposal, none of which will have any resemblance to a living, natural world.
If you feel done wrong by, stop living on borrowed money, don't buy all the gadgetry you don't need, neither buy the verbal trash that sells environment destructive commodities, try live on your earnings and do something that contributes to your own well being as well as the rest of the world. Try to live by using your brain instead of borrowing money for all those things you don't really need.

7:18PM PST on Jan 17, 2010

Living on credit is a huge mistake. The moment you borrow, you've sold your life to an unscrupulous bunch of criminals who are never satisfied with their billions and just want more and more, at the cost of you, the consumer, without a single breath of remorse.
These people are the cause of all misery in the world today, they do not care about the human, wildlife and environmental cost, so long as they can live their flawed lifestyle. They are the very reason why a 6.8 billion world population lives on borrowed time. They are the reason why millions upon millions of people throughout the world live in abhorrent, war torn, poverty, famine and disease stricken conditions. The money lending business is flawed, corrupt and criminal; it is a product of a system of greed and selfishness which has no regard for Life and is supported by all governments around the world on the premise of power which will ultimately end up in the hands of a mere few aiming to implement control over humanity by all measures at their disposal, none of which will have any resemblance to a living, natural world.
If you feel done wrong by, stop living on borrowed money, don't buy all the gadgetry you don't need, neither buy the verbal trash that sells environment destructive commodities, try live on your earnings and do something that contributes to your own well being as well as the rest of the world. Try to live by using your brain instead of borrowing money for all those things you don't really need.

7:15PM PST on Jan 17, 2010

Living on credit is a huge mistake. The moment you borrow, you've sold your life to an unscrupulous bunch of criminals who are never satisfied with their billions and just want more and more, at the cost of you, the consumer, without a single breath of remorse.
These people are the cause of all misery in the world today, they do not care about the human, wildlife and environmental cost, so long as they can live their flawed lifestyle. They are the very reason why a 6.8 billion world population lives on borrowed time. They are the reason why millions upon millions of people throughout the world live in abhorrent, war torn, poverty, famine and disease stricken conditions. The money lending business is flawed, corrupt and criminal; it is a product of a system of greed and selfishness which has no regard for Life and is supported by all governments around the world on the premise of power which will ultimately end up in the hands of a mere few aiming to implement control over humanity by all measures at their disposal, none of which will have any resemblance to a living, natural world.
If you feel done wrong by, stop living on borrowed money, don't buy all the gadgetry you don't need, neither buy the verbal trash that sells environment destructive commodities, try live on your earnings and do something that contributes to your own well being as well as the rest of the world. Try to live by using your brain instead of borrowing money for all those things you don't really need

3:17PM PST on Jan 14, 2010

I got so mad when I learned that after bailing out some of these companies that our cc rates were increased!! Absurd!! So I opted out and have cut up all cards that did this to me. I have not been late or over the limit or anything. To heck with those jerk companies. I now only have 1-2 cards and that is with those that did NOT raise interest rates by an arm and leg.

1:30PM PST on Jan 13, 2010

I hate the companies that charge extra for fast payment when it is actually BEFORE the due date.

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