Posted on 05/03/2008 10:32:36 AM PDT by RKBA Democrat
The Federal Reserve on Friday issued proposals to restrict various credit-card billing practices, including double-cycle billing and unreasonable late charges.
The proposals aim to protect credit-card users and clarify costs by prohibiting actions such as raising an annual percentage rate unless certain exceptions apply, treating a payment as late unless consumers have been provided with a reasonable amount of time to make payments and unfairly maximizing charges.
-SNIP-
In a statement Friday, Edward Yingling, president and chief executive of the American Bankers Association, said the Fed's proposal is an "unprecedented regulatory intrusion" into the marketplace.
"The proposal would greatly restrict the ability of card companies to charge interest rates that reflect the risks of different consumers, similar to how insurance companies charge different rates depending on drivers' records. If card companies cannot fully reflect risk, then millions of consumers with good credit histories will end up with higher rates," Yingling said. "The proposal would also have the likely effect of ending zero- or low-interest balance-transfer options, which have helped consumers and small businesses."
(Excerpt) Read more at marketwatch.com ...
Hmmm. Tough choice.
If they want to make me happy, they’ll allow a credit card user who has stopped using credit cards and is trying to pay them off to have SIMPLE interest on the debt instead of compounded.
Edward Yingling is the kind of guy who makes bankers seem to be evil and uncaring.
She says that like it's a bad thing. There are many people out there who have abused their credit to a level that would warrant not being allowed to borrow again. At least not until they learned to pay back what they owed.
Loan sharks are easier to work with than credit card companies.
“Edward Yingling is the kind of guy who makes bankers seem to be evil and uncaring.”
Well, since many of them are, that’s to be expected. Free speech is usually a good thing; it allows the underlying character of people and institutions to come shining through.
Lots of good lines in this article. People carrying large unpaid balances at unaffordable interest rates have only themselves to blame. Noboby held a gun to their head and told them that then had to use credit to get that big screen, new car, and complete wardrobe.
“She says that like it’s a bad thing. There are many people out there who have abused their credit to a level that would warrant not being allowed to borrow again. At least not until they learned to pay back what they owed. “
Sure you do. You also have banks putting out huge advertising campaigns focusing on how much fun you can have paying for everything with your card.
And then there are the banks giving cards to people who dont make any money.
“Loan sharks are easier to work with than credit card companies.”
And arguably of better character; at least a loan shark doesn’t act as if they’re occupying some sort of lofty high ground in the community. And they generally don’t hire lobbyists to flack for them, either.
“Noboby held a gun to their head and told them that then had to use credit to get that big screen, new car, and complete wardrobe. “
True but banks have virtually eliminate the risk of not being paid back with the bankruptcy law changes.
They give people credit when they don’t the risk is high. And then they seek legal protection to protect themselves from that risk.
Kinda like the mortgage lenders.
Regardless of what they decide, I won’t be using a credit card again if I can help it.
“They give people credit when they don’t the risk is high”
Should be - They give people credit when they KNOW the risk is high
What would really be the end of many unscrupulous credit card company practices would be to require a “plain language” statement of every possible condition and fee under that CC agreement.
The plain language would have to be mandated and inclusive, so that they would be uniform, down to font size and print contrast on paper. Every single change made would have to be included at least one billing period or month before it was implemented.
In essence, this would mean a government devised and regulated system of contract between the CC companies and the public.
This would be tolerable in a free market only because it was a service agreement involving only money. As such, it is the same as strict banking regulation for consumer protection.
Undoubtedly, the Lobbyist said this with a straight face. Marketplace? What Marketplace. At best it is a duopoly with significant collusion between the providers in setting usurious interest rates and onerous, unjustified fees and charges.
You are right about which is worse, the Fed backstopping poor credit risks with our money, thereby abusing the Taxpayer or this kind of arrogance in the face of obvious abuse of the Consumer. Both suck IMO.
The FED’s actual powers is coming to light. And, the conspiracy was some kind of theory, eh?
I haven’t had a credit card for 5 years now and I love it!
Don’t want one don’t need one.
Here’s an idea, If people don’t like the interest rates don’t use the cards. I have credit cards but I use them only for emergencies and then no matter how painful I pay them off early.
And always read everything, there is simply no excuse for not doing so, none.
Your guaranteed 6.5% APR jumps to 22% on all your other card. Your minimum monthly payment payment doubles and then triples. Suddenly you are SOL . . . And nobody with the credit card companies wants to listen to your reasonable complaint.
The best thing to do with credit cards in cut them into pieces. Never use them again: Forever ! Screw them all ! 'Nuff said.
To a great extent this is true, however there are some CC companies that wait until you have a balance on a card and raise the rates to 20+ percent. This is with a AAA credit rating and payments made ahead of time.BOA is a good one for that.
I had a Visa card that did just that, I paid off the balance that month, cut the card up, and mailed it back to them with my thoughts on their practice.
Funny part was within 2 weeks they called back offering to give me another card with a low balance, don't think they liked my answer.
Government. Always.
Manipulation of markets always leads to unintended consequences, which tends to result in more manipulation, resulting in more unintended consequences, resulting in more...
Government is seldom the solution and usually the problem.
Hope you told them to put that offer 'where the sun never shines.' They are thieves with a license to steal granted by the states and federal government. Most of them charge 18% or 22% or even 30% interest on balances. Ought to be made illegal under usury laws.
All of them are crooked as a dog's hind legs.
LOL !
Yeah, I missed a payment and have been paying 29 percent. My fault, my debt. I’ll pay it. It’s nearly paid now. And once it’s paid, I’ll let the card expire.
“And always read everything, there is simply no excuse for not doing so, none.”
Unfortunately, that doesn’t work real well when the CC company can change the terms at will, and notify you of the change via a junk mail insert in your bill. I agree with exercising diligence, but who has the time to scrutinize every piece of junk mail that you receive?
The only way to avoid it in my view is not to do business with the megabanks and large CC companies. Even if you never open a CC account, the megabanks are still going to put the knives to you eventually. You play with snakes, you’re gonna get bit.
“Regardless of what they decide, I won’t be using a credit card again if I can help it.”
I understand the sentiment, and if that’s what works for you, that’s great. I’m not anti-credit card per se, but I’m getting there real fast. I think the issuer is a big part of the puzzle.
Most credit unions are OK to deal with. They’re not looking to rip off their customers so much. The megabanks and large credit card issuers are just a bunch of snakes. And if you play with snakes, sooner or later you’re gonna get bit.
Don’t like the game don’t play it.
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