Comments on: Breakdown: The Credit CARD Act of 2009

By: Linda

Linda — Fri, 05 Mar 2010 02:57:17 +0000

I read the commentary by “anonymous too” dated 12/01/2009. Yes, it was really long but once I started it, I couldn’t stop reading it. I agree with it in its entirety. I initially applied for a cc for emergencies. Once I got that one, they just came out of the woodwork. I know I didn’t have to accept them but I did. I used them responsibly and I have always made all of my cc payments on time. Towards the end of last year, 2 of the cc limits were cut in half and another one was cut down by 90% (supposedly based on my use or non-use of them). Go figure. However, I will continue to keep them and use them at my leisure (never know when an emergency will pop up).

By: Myron

Myron — Wed, 17 Feb 2010 02:52:09 +0000

After reading the credit card act of 2009. I come away with the feeling that the credit card companies will suffer a loss in the first year but I am sure they will come up with a way to get their money from the interest. I think they should be held accountable for not explaining to you that if you cancel an account their is no way that your interest rate will be lowered even if you make the payments on time for a six month period as it is stated in the new law. If they increase your rate for being in default and you cancel your account they view that all communication is lost between the company and the credit card holder and you are a credit risk to them even if you set up payments to come out on a set day each month. Also if you are not aware they will apply most of your payment to purchases instead of equally applying it to cash advances. I also found out that cash advances are not soley equated to money taken from a ATM or over the counter at a bank some purchases may be lumped into it and a high interest rate will be applied at a rate of less than 25% annual. They are allowed to transfer some purchases to cash advances. I should end this by saying that is what I was told by a customer service representative.

By: Mike

Mike — Tue, 16 Feb 2010 21:59:57 +0000

There’s a lot of talk here about how this isn’t fair or this should be done differently or why those under 21 are being treated differently or why the credit card companies are evil.

Bottom line, this is a political decision. the credit card companies push one way, congress pushes the other way(sometimes the same way) and we end up with another half-ass law that tries to please everyone and pleases no one.

Get used to it, it’s the American way :)

By: Anonymous

Anonymous — Wed, 10 Feb 2010 21:09:25 +0000

amazing, the government signs in a law that would help with this credit card mess. but, at the same time gives them a year to find loop holes. allowing the cc companies to increase everyones interest rate (even for those in good standing), and drop limits right down to what people owe, so there debt to limit ratio is screwed ( causing ppls credit rating to drop)

By: joe

joe — Wed, 23 Dec 2009 16:56:57 +0000

Sorry for all the typoes. I was trying to put my thoughts in type too fast. I meant to say until those stated, misdirected benificiaries of the government panderers of the vote and intitlements forsworne to, wake up, or are over powered by
common sense voters who join the electoriat and VOTE! for the right representatives and presidents who don’t make promises for power instead of complaining about the legislation that follows there complacent acceptance of their unfortunate plight that follows.

By: joe

joe — Wed, 23 Dec 2009 05:31:30 +0000

I’m new to this and kind of out of the loop when it comes to the every flowing chicanery from our ever intrusive, inept, and repressive Washington
sorry excuse for a government of the people by the people and for the people. This credit card act is just another irrational knee jerk slur against responsable honest hard working middle class
Americans, who pay there bills, don’t over extend their credit and think Nate seems to be on the right track. But I don’t think the majority of responses ot those I’ve read are reading between the lines.It doesn’t matter abou the under 21 thing or the exorbident interest rates or any other stuff. It’s about another government sanctioned interferance in free enterprise to force uncreditworthy people to get credit which they will max out and spend the rest of their lives paying off the interewst or defaulting and filing bankruptcy. It was the same way with the housing market fiasco. The goverment forced lenders to grant loans well above the creditees ability to pay and adjustable rate mortgages were signed and when the homeowners could no longer afford their payments the filed bankruptcy and defaulted their homes and walked away unhurt and protecte by the bankruptcy laws. It’s been a vicious downword spiring cycle with no end in sight until irresponsible materialistic people who think the government is the answer to all the wolds problems. It’s real simple. Live within your means, work hard, save as much money as you can and be happy with what God has blessed you with
and He will bless you with more than you can ever ask or imagine.

By: Nate In Ohio

Nate In Ohio — Tue, 22 Dec 2009 14:51:52 +0000

I keep reading and reading and have come the conclusion that the credit card companies are winning. In the end the language is so laden with legalese, it would take a lawyer and and a linguist to make clear examples for the lowest common denominator. To me, the lesson learned too late is harsh and pretty simple: set aside credit for big ticket items ONLY – house and car, and even then consider all car purchases a depreciated asset the moment you take ownership so if you have the means, pay for as much of the car up front as possible. I would also caution first time home buyers to shop within their means, don’t forget to add in property tax, insurance, maintenance, utilities, etc. Does a family of 2 fresh out of college need a fully finished, 7,000 square foot home with a 4 car garage? I’d venture to say NO. Americans in general and especially the children of generation X are in serious trouble. They have very little discipline, less self control, and the average math skills of a chimp. Now consider they are bombarded with 100’s of marketing messages every single day. So to them, why wait, if you want damn it, charge it, play now and pay later, and get ready to PAY and PAY and PAY. My best advice to anyone who reads this is make a plan to pay off your credit card debt as soon as possible, cut up your cards, keep only 1 or 2 accounts you trust, and keep YOUR money. You’d be amazed how little a credit score matters if you have cash.

By: anonymous too

anonymous too — Wed, 02 Dec 2009 01:55:06 +0000

People like Mark who think Paul, Jason, Mike, and other self-righteous, judgemental haters “get it,” don’t get it at all. Every one of my credit cards this year raised my interest rates, some almost double. I’ve had to close several accounts this year in order to avoid the increases, which hurts my FICO score and credit picture. Even though this happened because of the upcoming credit card act, I’m still glad for the Act. I just wish they’d implemented it right away. Some of us are very conscientious, read all the fine print, and somehow assume banks can not possibly legally do the outrageous things they do to us. All of the companies flat out told me the reason for the increases in my rates was to “maintain proitability.” It has nothing whatsoever to do with my payment history, credit worthiness, or any factor I can control or for which I am actually responsible. So those of you who say those with credit balances are somehow “stupid” or “irresponsible” had better hope you remain privileged or wealthy. There are those of us who simply can not pay our credit cards all off and are therefore stuck with whatever the cc companies want to do to us, all of which has been “legal” for years until this Act. You must obtain credit in this economy and culture or you may not be able to rent, buy or get a job. In some cases you must utilize it to have a positive score. In some cases you must use it or they will take it away from you and you will then SEEM irresponsible(by the way, Justin, I THINK it is legal right now for them to punish you for paying off your balance. They punish you by radically decreasing your credit limit; this also allows them to keep you hovering at your max limit so you will go over your limit with minimal usage and they will get to charge you all kinds of fees and default rates, just for charging up about $100, whereas before they’d have let you charge up many times that, as long as you kept paying them usury interest rates. Here is a good example of how they couldn’t care less what your true risk level is, they just play games. Shutting down your limit to only $100 SHOULD be done ONLY if you are a higher risk, but how can you SUDDENLY be a higher risk when you clearly have less debt? You’d actually be a higher risk paying usury APR’s on a large balance, which is what they wanted, and because you dared not to, they punished you.) In the past cc banks atually didn’t let you go over your limit..that was the purpose of having a limit! Now they let you go over it on purpose and claim you are “irrepsonsible” if you do not know your balance at all times and keep yourself from exceeding your limit, something not possible without a computer in your head and an ability to predict future fees. One time I was given a false available credit because it hadn’t counted charges made 2 days before yet. I had one company that actually “rounded up” the available balance and then let you go over your limit(I consider this fraud.)
The person who commented about caps/usury rates, you are correct, they are rates which are literally illegal under most state law, but the state laws are pre-empted(trumped) by newer federal ones that allow usurious rates. The good thing is, at least the initial rates they give you, which may not be usury and may cause you to accept a credit offer, can’t be raised arbitrarily anymore as of February. As for those of you who blame “government intervention” for every ill in the world and state that there should be no regulation in the “free market,” you need a more realistic and well rounded view of the world, of life, of our country, of our economy. THERE IS NO REAL FREE MARKET! Adam Smith, the “father” of capitalism and the person who hypothesized there is some “invisible hand” guiding “free markets,” stated two important things: 1. There are “moral sentiments” that make it immoral to prescribe unbridled greed with the wealthy taking advantage of the less powerful, and 2. No such exceedingly aggressive capitalistic system can sustain itself forever, it will crash. Smith admitted this, even as he held on to his idea of an “invisible hand” which seems so much like magical thinking now. No one wants to see “socialism” or a lack of business opportunity in our country. What we also don’t want is a monopoly of giant corporations acting with the powers of a government, usurping the will of the people, which is what the government is supposed to uphold and protect. What we have is unprecedented unchecked and unfair greed and great power where some corporations control “the market” in ways which are not by true market mechanisms, but by strong-arm and pervasive manipulations. For example, anti-trust, price fixing, collusion, union breaking, tax shelters/loopholes, lobbying with cash, “creative” investing, taking money from the government through general subsidies or bail outs, and infusions of cash from the government for the highly paid who don’t need or deserve it. Billions in undeserved bonuses went to failed executives from TARP money. How is it a free market principle to reward inept, unsuccessful institutions and their officers? In a true free market, most of the banks would have died. But they were considered “too big to fail” and they were saved. In REPAYMENT for this, how about treating consumers like human beings, fairly, setting an interest rate and sticking to it? No more raising rates to be “more profitable.” They won’t do it voluntarily, so what is wrong with forcing them?They can not “self regulate.” Can you imagine the gall of some other type of company that wrote to you and said “we need more profit, so we are going back and raising the price of that car you purchased back in 2008. Send us $2,000 more. We will be expecting it by Tuesday.”
That is the exact equivalent of what cc companies now do, with impunity. Had we allowed the big banks to fail, many of us would have had NO more obligations to them and we’d be paying nothing to them right now. Do they show any accountability after being bailed out? No they try to gouge us even more. And the worst thing of all is that when some of you speak about “the risk these corporations take” you don’t realize they are taking a “risk” with OUR MONEY, with pure profit. IT COSTS THEM VIRTUALLY NOTHING TO OBTAIN THEIR MONEY from “the Fed,” SO ANYTHING THEY GET FROM US IS PURE PROFIT, SO HOW CAN YOU SPEAK OF THEIR RISK, AND NOW CAN YOU SEE HOW OBSCENE AN INTEREST RATE OF 20% or 30%, compounded daily, really is? Then when they make bad investments and somehow mess this gold mine up, they ask for money from us again to bail them out. Did you know that there were billions paid out in bonuses last quarter to Chase and Goldman Sachs employees? According to some things I’ve read, they are able to simply borrow from the federal reserve when they wish, like their own personal line of credit. They then say it was somehow their “business success” that was responsible. Who could possibly “fail” in this case, and even when they did, we bailed them out. Chase had said, according to others on a hate-Chase website, they “don’t care if customers default because they are insured for those losses.” Who said it was okay to insure PRIVATE companies against NORMAL business risks or failures? ANd what about the fact that insurance companies and banks have virtually merged into blob-like mega-financial products firms now, thanks to the GLB Act. That is not a normal “market” thing, it is a privileged, manipulated, engineered, non-market thing.
Can you imagine if every corporation suddenly wanted to be insured for its uncollectable accounts? Can you imagine if every company suddenly demanded to not be able to fail, to be virtually insured against failure, to be able to demand more profits from its customers? Banks and their evil twins, insurance companies, have been able to do just that. What clout. Did you ever stop and think: “where do banks get their money” and what gives them the right to gouge us? Aren’t you mad that YOU aren’t allowed to go out and take money from the government’s printing press at almost zero percent interest in large amounts, invest it and charge others huge fees to use it, including the government itself? What gives these banks any “natural right” to do this, or to worry about “their risk?” You must stop looking at the world in black and white terms as if we exist in a vacuum. All of us are interconnected, part of the same economic thread, and most large businesses gain some large advantages or subsidies through the government on a regular basis, or their loans come to them through some privilege that allows them to borrow, and we all contribute to that privilege and to a big businesses’ success. Therefore, those businesses owe us as well. We all live by laws, we all submit to laws based on morality which govern society, in all areas, not just finances. Stop giving the powerful and greedy a pass and blaming the economic mess on “irresponsibility” on the part of marginalized consumers. Stop thinking that obscense levels of profits large banks demand has anything, really, to do with consumer’s actual behavior. For the most part, it does not. That is an excuse. If they cared about consumer’s risk behavior they would not encourage them to default by gouging them for PAST purchases when they have not missed any payments, particularly the ones who can not afford it (I agree with you there Sarah). They would not be playing all of these games they get away with, such as lowering credit limits at a whim or allowing you to go over your limit so you’ll incur fees and usury “default” rates. And to believe that they will “tighten credit” now,
when they have all the money they could possibly want,
or “charge those with good credit higher rates to compensate for the higher risks” as a result of “the market” is very naive. Most of those “higher risk” persons never really were a statistically higher risk, because they had paid their bills perfectly. Their only “crime” or what made them “higher risk” was being less wealthy and USING their credit cards (not the same as defaulting on them). They did not become truly higher risk until their rates were arbitrarily raised.
The banks CREATED the higher risk of default(which may or may not impact the lower risk consumers) with no justification. Just because a person can’t afford a credit card payment of $450 per month on a balance of $15,000 does not mean he/she couldn’t afford the $200 he/she was SUPPOSED to pay before the bank decided it needed more profits. The wealthier or “lower risks” did not have this arbitrary rate hike done to them in the first place, or if they did, they had other options, for example to just pay off the account and seek credit somewhere else. The banks’ actions are not a direct result of some “scientific” or time tested economic formula. They do what they can get away with, not what “the market” dictates. And right now, they can get away with anything. The fact that they do not have to compete in the market, and can simply force their terms, is an abomination. This is certainly not any kind of free market situation, but a monopoly (oligopoly). It is a case of a collection of PRIVATE firms with governmental powers, and no accountability, and that is not what our (Democratic?) country is about. In Michael Moore’s film, “Capitalism, A Love Story” he showed a private letter from a bank to potential investors, I THINK it was from Citi Group. If I remember correctly, it boasted that U.S. citizens think they live in a democracy, but they do not. This bank told investors that “U.S. citizens live in a plutocracy.” Look up this word. It means just what I have described. It is when a small group of the wealthy control the government and rule the land.

P.S. I know this is really long, but it was addressing many people’s issues, with many separate replies to others’ comments within it. And it is important to make these complex points.

By: Sarah

Sarah — Wed, 18 Nov 2009 22:42:54 +0000

How does it make sense to charge more to people who can’t afford more? We don’t do that with taxes.

You’re increasing the risk that people with poor credit will default if you charge them higher interest rates, because you’re asking them to pay more than they can afford. Either don’t lend to them because they’re a greater risk, or give them an affordable rate with a lower limit. Hiking up interest rates for people with poor credit doesn’t make sense– they have demonstrated they can’t afford it.

Wouldn’t a better, lower-risk plan be to charge higher interest for people with higher limits? If you’ve analyzed their credit score and income and found them to be worthy of some $50,000 worth of credit, wouldn’t they also be able to afford a higher rate, with a lower risk of default?

By: Mark

Mark — Wed, 11 Nov 2009 20:37:35 +0000

Paul obviously gets it and understands how a free market works. It self regulates for the most part. In a free market consumers have all the power and private business has to meet the consumer demand. When government sticks it’s nose in and regulates – we all lose. The fundamental concept of these consumer protections are only necessary because too many consumers are stupid and irresponsible and then they play the “victim” role and whine about how they’ve been taken. Our economy goes as our business go. When people have access to capital and credit they buy things. This legislation will only limit the availability of credit to people to stupid to handle it. As a result business, consumers and our economy will suffer. You voted for big government – now don’t bitch about the results.

By: Himanshu Tripathi

Himanshu Tripathi — Tue, 10 Nov 2009 00:21:16 +0000

This is not about the trapped people it is about the trap setters. We want them to stop setting traps. You’re saying that you want credit card companies to keep trapping kids in credit traps so that credit will be easier for you to get! Wow! Maybe we are all going to hell in a hand basket. Selfishness is apparently the new hospitality. We the people do not like companies who target our young, old or weak. We want the trap setters to stop setting traps.

By: whatevernameyouwant

whatevernameyouwant — Fri, 06 Nov 2009 07:06:48 +0000

If you are one of those people who save a lot of your income, almost never use credit and have never been laid off from a job at a very bad time then halleluja. Now lets consider the facts. Most Americans are not like you! Period. Now deal with the facts. Lets not enter into fantasy land! Coulda woulda shoulda Real people do not have time for it. By the way if you smoke and or drink the rest of us will pay for it through higher health insurance bills. If you drive a pickup the rest of us pay with higher gas bills. If your driving sucks the rest of us pay through higher premiums. And so on and so on. I cannot stand the self righteous. You cant tell me that if someone sets a traps and traps most Americans you would just say that they just should have been watching out for traps. This is not about the trapped people it is about the trap setters. We want them to stop setting traps. You’re saying that you want credit card companies to keep trapping kids in credit traps so that credit will be easier for you to get! Wow! Maybe we are all going to hell in a hand basket. Selfishness is apparently the new hospitality. We the people do not like companies who target our young, old or weak. We want the trap setters to stop setting traps. If you cant understand that then the rest of us will pay for your learning disability through higher education costs.

By: lolposter

lolposter — Fri, 30 Oct 2009 12:01:06 +0000

“People under the age of 21 will now be protected from pre-screened credit card offers unless they specifically opt-in for offers.”
This way we can protect the children from predatory practices of credit cards company. We dont need the future generations with too much debit.

By: strates

strates — Sun, 18 Oct 2009 07:35:55 +0000

Just wanted to make a note to all those spouting off about paying off a credit card balance in full every month. Why would one bother to have a credit card if they were just going to pay the balance in full everytime they used it?

Yes, there’s reward/rebate cards and such, but really, if you have the money to pay the balance, you have the money to buy what ever it is you put on the card.

People use credit cards to pay for things they don’t currently have cash for, hoping or knowing they’ll have money for it in the future. Just Saying.

By: Justin

Justin — Fri, 02 Oct 2009 01:56:33 +0000

HELP ME PLEASE!!!
I just paid off my wifes credit card. She had an $1800.00 limit with a $1750.00 balance. Never a late payment. I just paid off the $1750.00 within the last couple of weeks, and received the new statement today whereas they have now lowered her credit limit to $100. She called to inquire, and could not get anywhere with the credit card companies hourly wolves. Is this legal, or illegal for them to do this? We reside in Florida, and I really find it hard to believe that this happened. I am 38 years old and have never seen this before with my own credit cards. The credit card is a GAP Visa.

By: David Enertson

David Enertson — Mon, 31 Aug 2009 17:52:48 +0000

Cosigning on a credit card is one of the dumbest things someone can do. A cosigner cannot close the card so they are stuck on the card until the creditor agrees to remove them or the balance of the card is at zero. If you cosign for someone who maxes out a card and the person you cosign for isn’t making payments on time, and you ask the creditor to take you off of that card…..they won’t do it! You are stuck. And why would they take you off? They aren’t dumb…….they want to get repaid. So they come after you for the debt. As a cosigner you have no rights to change anything about the account or close the account; only to pay the debt. So, now cosigners will be crying to congress for more help and yet another piece of legislation enacted.
Look folks: If you want a card, read the fine print. If you don’t like the terms, don’t open the card. If they raise the rate on you, close the credit line and find someone who appreciates your business. It is a free market and people need to remember WE are responsible for the choices we make. Don’t leave your brain at the door and expect government to protect you. Vote with your money. Only do business with the card companies that aren’t taking you to the cleaners. The whining and complaining only gets you government intevention and an erosion of your freedoms. Perfect example: 18 year olds have lost the ability to have a credit card without mommy and daddy. Why is no one angry about this?

By: Anonymous

Anonymous — Thu, 27 Aug 2009 00:38:26 +0000

If consumers were responsible in using credit we wouldn’t need an ACT to be imposed. Nor would we the economy issues we have today.

When a consumer accepts credit that should then be saved for an emergency or rainy day yet uses it to buy a flat screen TV they can not really afford, they deserve protection, from what? Who really is losing here? The rest of America that manages their credit and doesn’t need the government to step into managing their finances.

By: Anonymous

Anonymous — Wed, 26 Aug 2009 14:31:21 +0000

I appreciated the effort of the government to protect and help us achieve a healthier credit life. The most interesting law stated on the credit card act of 2009 is the emphasis on disclosure and advance notices of changes that concerns the use of credit cards. This is one of the major issues in the previous years.

Though I am hopeful about this act. There are some issues that concerns me.I do not agree on the “under 21″ part. First, on the issue on being approved if there will a co-signor to guarantee the payment of debt. This clearly does not teach the new generation on spending wisely instead it pushes them to spend more.

Second, why only limit the “proof of reasonable income” to under 21 people only? As far as I am concerned every credit holder must show a proof that they can really pay their bills. As this is the major reason of the credit crunch that we are experiencing today.

Besides that, I have a positive feeling about the act of 2009.

By: Jason

Jason — Fri, 21 Aug 2009 22:35:44 +0000

Micromos,

It is the duty of the government to defend us from attack and war. It is not the governments job to regulate business! I feel that the government has no right to stop a company from earning revenue. The big corporation will now just make it more difficult to even obtain credit!!! A giant mess is what this will end up being.

By: Micromos

Micromos — Fri, 07 Aug 2009 19:21:22 +0000

Donna, That’s one of the jobs are government is supposed to do, protect it’s citizens.