Kindler, Gentler Credit Cards? Credit Card Reform Long Overdue
May 9, 2007
Credit card companies are going to ratchet down their money grubbing under the pressure of recent political scrutiny according to the June edition of Kiplinger Personal Finance.
- No more double-cycle billing for JPMorgan Chase
- Citi won’t arbitrarily raise its rates and fees
- No more universal default for Citi
- Bank of America relaxes time period on lower rate adjustments
- Discover offers credit card interest rebates
Two other tactics that might be on the chopping block are those unsolicited convenience checks you get every day in the mail and the practice of credit card companies applying payments to lowest interest rate first.
Credit Carelessness
I’m not always for government intervention but in this case I think it was overdue. The credit card companies weren’t regulating their own behavior. They were so caught up in making money that they were using any tactic they could to gain customers. We need to start addressing the massive debt crisis created by a lack of responsibility on the part of credit card companies and consumers. Hopefully these changes are just the first of many by the credit card industry.
Debt Deadbeats
Of course consumers need to make changes as well. According to the credit card industry I’m a credit card deadbeat since I pay my balance in full every month. Maybe I should start a club called the Debt Deadbeats. Are you a member of the club, or do you carry a balance on your credit card? If you want to join the club as a founding member just let me know. What would our motto be?
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I’ll join the Debt Deadbeats club! In addition to paying off my card in full, I also use a credit card of the cash back variety, so I’m actually making money from the credit card company instead of paying money to it… to the tune of several hundred dollars a year.
[…] Ben of MoneySmartLife reports that credit cards are getting kinder. It’s hard to imagine them getting less kind… I’m hoping that universal default is banned - it’s one of my bigger pet peeves. […]
I have always been a deadbeat, ever since I got my first credit card after college. Funny it seemed obvious - why pay more interest then what one can get in a bank? Not to mention that you pay taxes on bank interest. I’ve also never understood buying more stuff than what one can afford, and then paying a lot more for it than it is worth. It’s not like buying it on credit makes it free. This has never made any sense to me, not even when I was young (and poor - I am a first generation immigrant), and I am by no means frugal. As far as I know all of my friends pay their balances in full, except for maybe taking advantage of 0% offers occasionally to earn a little free bank interest on the money.
Still I find it difficult to blame credit card companies for people’s choices. It is like blaming casinos for gambling losses.
[…] Kindler, Gentler Credit Cards? Credit Card Reform Long Overdue by Ben @ Money Smart Life. Credit card companies getting rid of two-cycle billing and universal default? That’s a good sign for credit card users. For deadbeats - it has no meaning. […]
All right! Jim and Kitty are the first members of the Debt Deadbeats.
Good point Jim, my AmEx blue earns me cashback as well so some debt deadbeats actually make money off of credit cards!
[…] Credit Card Reform Long Overdue [Money Smart Life] […]
[…] I wrote the other day about companies that had announced changes to their credit card policies to be more consumer friendly. It seems at least one of them is following through. […]
[…] Credit cards are evil… thankfully Congress has a handle on the situation and is demanding credit card reform, courtesy of Money Smart Life. […]
[…] Ben presents Kindler, Gentler Credit Cards? Credit Card Reform Long Overdue posted at Money Smart Life. Credit card reforms may do a little to help consumers. […]
I’ll join the Debt Deadbeats club too. I also use a cash back card. one possible slogan is “Don’t Froget The Debt Deadbeats” or “Once Debt Deadbeats, always Debt Deadbeats.” for long term members… “The Debt Deadbeats way of life.” for living debt free.
Governemnt can be the friend of the people when they decide to help citizens in a way liek this. I was getting so many convenience checks and new credit card offers a day I had put myself on the mail equivalent of the “do not call” list.
I still think the situation with people getting in debt won’t change with the new credit card law. People like to sepnd more than they earn - that’s the core of the problem and there is not much you can do about it.
I have 2 credit cards: one for personal and one for business. Each is paid in full and the end of the month. Count me in, I’m a credit card deadbeat too.
I’ve always been of the opinion that if you don’t like the terms of your credit card, switch to a new one. Maybe, better yet, cut em up.
“Citi won’t arbitrarily raise its rates and fees”
Ha!
I’ll believe that when I see it in a contract that doesn’t say somewhere in it, ‘We can raise our rates when ever we want’
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