Unintended Consequences and Credit Card Laws

bomelia · #1 (**permalink**) 08-25-2009, 08:30 PM

Big argument going on with Ernie and his desired health care. in another thread. Recently the all caring government passed a law (no yet in effect) that is intended to reign in credit card companies. Reduce rates, eliminate rate increases and so on. So, what do the credit card companies do? I just recieved a notice from Home Depot that my CC with them is going up to as much as 29%. Good thing I never used it. And it's happening with many of the credit card companies! Check your statements. Government says NO to these activities, sets a date for enactment, and the CC companies respond by screwing everyone. Can't say I blame them. Party while you still can. Sure, one can assume that competition will drive the rates back down. But tell that to the single mom who just saw her minimum payment go through the roof and can no longer manage it. By next year's end, many people will see their current debt double or triple because of Congress's inteference in the free market.

Yeah, and health care will most assuridly fare better.

Thank you Obama.... the reaming felt good.

Mike

fsstnotch · #2 (**permalink**) 08-25-2009, 08:45 PM

Mike, I had like a $300 balance on my home depot card. As I usually maintain a low balance on all of my cards. I logged into the website one day to make my payment and seen the interest rate on my HD card was 29.99%!!!!!

Paid the balance and cancelled the card.

Excaliber · #3 (**permalink**) 08-25-2009, 08:54 PM

Oops, wrong thread, you got me there for a minute!

What this isn't the health care thread? Wake up and smell the credit cards. I haven't been following the credit card turmoil much myself. I don't carry a balance, ever, so it makes little difference to me personally what they do. However, from what I have seen it appears overall to be a good bill. I like the part about having to give the consumer 45 days notice before raising rates, for instance. Some last minute hustling by the credit card companies would be expected until the smoke begins to clear.

I never did like single company cards (Sears, Home Depot, etc.) heck there rates are ALWAYS higher than a standard issue Visa, Master or whatever.

427sharpe · #4 (**permalink**) 08-25-2009, 09:55 PM

Ernie is dead on about the single company issuers; but he misses a major point. The intended action of the 'reform' was to alleviate abuse of those who struggled and needed the credit (a dubious point); now everybody with a card is being hosed. Well, I guess it did level the playing field!

As for HD, I am a customer and got the same deal. What is good is that they offer 6 or 12 months same as cash and my balances never last that long so I am in effect paying zero percent interest all the time. No way I pay 29% for anything...ever. Better to go without than pay loan shark rates!

Excaliber · #5 (**permalink**) 08-25-2009, 10:47 PM

I can see the delima with the new bill taking effect and the rates sky rocketing just prior to that. I think it's a good call in the long run, but the immediate impact on low or no wage earners relying on credit is a serious downside.

What I have noticed in the past year or so on my cards is that the "easy money" has disappeared. I used to get multiple offers of 0% for a year or more, NO upfront fee's. A few years ago I borrowed $50,000 (not a typo, thats 50K) at 0%, for a year, with no fees! I actually invested it and did well, then paid the loan off when the year was up. I haven't seen offers like that for awhile. 2.9% for 6 months, maybe a year WITH a huge upfront fee is about the best you can get these days. So far I haven't seen any of my rates change. BUT, a few cards were cancelled for "non use", which was unexpected by me, but not surprising.

6 months at 0%? Heck that's great, even at 29% potential, provided you pay it off on time!

Dan40 · #6 (**permalink**) 08-26-2009, 05:17 AM

New CC rules are near meaningless to those of us ABLE to handle cards. Those least able to manage cc's will be screwed the most. 45 days notice? That is NO help to the hi balance, minimum payment users the bill is "intended" to help. 45 days, what can they do? Make a payment?
The kind thing if the Gov. wanted to be involved would be to mandate a minimum credit rating or NO cards. Get them OUT of the hands of those who abuse them and get screwed back the most.
Same as health care, the Gov. wants to involve EVERYONE for the benefit of a few.

twobjshelbys · #7 (**permalink**) 08-27-2009, 10:38 AM

I have two cards - AmEx and a credit union Visa. Balances are paid monthly. I have a commercial Home Depot account but it is not a credit card it's a charge card. They are pretty smart too - I don't use it all that often but when I do they typically bill within a few days. Then if you use it again they set the 30-day cycle.

cobra de capell · #8 (**permalink**) 08-27-2009, 03:33 PM

It appears to be social engineering in that those who are responsible regarding CC’s are not impacted, but those that have issues are cut off from automatic ‘services’ that may be bad for them in the long run. There really is no plus for consumers, it’s all BS with more disclosure but the same high rates.

Only stupid or desperate people carry a balance on a credit card.