Consumers: We're Mad As Hell And We're Not Going To Charge It Anymore!

Once upon a time, Peter Finch won an Oscar for telling us to go to our window, open it, and yell, “We’re mad as hell and we’re not going to take this anymore!” Now thousands and thousands of consumers are doing just that, but instead of yelling out their windows, they’re yelling at the Federal Reserve in the form of a record breaking number of public comments about some proposed credit card reforms. Not as sexy as yelling like a madman, but far, far more effective.

From BusinessWeek:

Many consumers say it’s about time. The rules were proposed just as the U.S. economy started to tank, when many card holders were falling further behind on their payments at the same time home equity lines of credit were drying up and jobs were disappearing. Regulatory agencies came under fire to act, and Senator Carl Levin (D-Mich.) held hearings this spring to examine card company billing practices.

The proposed regulations generated more than 56,000 comments from individuals, banks, credit unions, and industry associations. That’s a record number of submissions, says the Fed, beating the previous record of 45,000 submissions for a proposal that would have let financial firms assume the role of real estate brokers.

BusinessWeek says that since 1996 our nation’s credit card debt has doubled to almost $1 trillion dollars. And unpaid credit card bills are growing fast as the economy sours. For their part, the credit card companies are trying to stop the bleeding by raising interest rates on otherwise “good” customers. And those customers have had enough.

Here’s how the Federal Reserve describes the proposed reforms:

  • Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the consumer to pay off that balance over a reasonable period of time.

  • Banks would be prohibited from applying payments in excess of the minimum in a manner that maximizes interest charges.

  • Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible.

  • Banks would be prohibited from imposing interest charges using the “two-cycle” method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle.

  • Banks would be required to provide consumers a reasonable amount of time to make payments.

If you’d like to add your comment to the proposal, click here, then scroll down to “Proposals for Comment.”

Federal Reserve Proposal Press Release [Federal Reserve]
Credit Card Rage [Business Week]

Comments

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  1. wezelboy says:

    Page not found.

    Guess the Fed got tired of listening.

  2. wezelboy says:

    Nevermind. The other link works.

  3. synimatik says:

    I’m curious as to what exactly ‘limited circumstances’ means.

    Do those ‘limited circumstances’ effect promotions like no interest on balance transfers until X/XX/XXXX?

  4. thebluepill says:

    Now.. if we can get them to prohibit banks from predatory practices against low balance holders… We would be in great shape.

    • johnfrombrooklyn says:

      What predatory practices? Seems to me that if you’re a low balance holder, you’re not a very valuable customer to the bank. Therefore, you should pay more to use the bank’s services than someone with a high balance. And, for the record, I certainly do not qualify (unfortunately) as someone with a high balance.@thebluepill:

      • @johnfrombrooklyn: You’re absolutely right. You maximise your profit based on the customer. If my CC company pisses me off and I leave, they don’t care either way because they weren’t making any money on me in the first place, so they do what they can to make money when they can.

        Might suck, but it’s a good business practice.

      • thebluepill says:

        @johnfrombrooklyn:

        Its very difficult to make it without a basic checking account of some type in life. Banks have got a real racket going with OD/NSF fees, Large Purchase First Accounting practices and other such methods that are wreaking havock on those that dont hold a high balance, or live pay-check to pay-check. Its really quite sad.

        Is it all the banks fault? Of course not, but they do take advantage of it to an excessive degree.

        • ram0029 says:

          @thebluepill:

          Of course banks take advantage of it, that is called capitalism. You see an area where you can make some money, and you go for it.

          Any one remember the early days of credit cards, you had to have a stellar credit score to qualify. We can “reform” the credit card industry back to those days if we try hard enough. No one but the top 20 or 30% will ever qualify and everyone else goes back to cash.

          Having a credit card is a boon to millions of households in helping to cover emergency expenses and similar situations. Used responsibly, credit cards can save households money each year.

          That is not to say the system should not be fair, with all terms and conditions CLEARLY disclosed in understandable terms. But lets face it, not everyone should have a credit card, and we certainly should not punish the majority by making them harder to get because a minority cannot use them properly.

  5. ARP says:

    “Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances)”

    Would one of those circumstances be universal default? I don’t trust the current Fed.

  6. sketchy says:

    All of those reforms sound fair, keeping in mind that the essence of Capitalism (the American Way!) is to allow people (and Corporations are people, too) the freedom to make a profit, when they own the method of production. CCC’s ‘own’ credit and as such need to be able to earn a profit and should only be prevented from taking unfair advantage of consumers, however they will still be able to take advantage of consumers, until consumers realize that all credit carries a cost, i.e.: there’s no such thing as a free lunch (or a free Plasma TV).

    • TouchMyMonkey says:

      @sketchy: Uh, corporations are NOT people. If they were, they would have the right to vote, contribute to and/or participate in political campaigns, and all kinds of other scary stuff that corporations are rightfully proscribed from doing. The idea of the ‘personhood’ of corporations is a lie conservatives tell when they insist that corporations somehow enjoy constitutional rights. That is flat-out bullcrap. In fact, it is the government’s JOB to regulate everything having to do with the creation, structure, functioning, and dissolution of corporations as it deems appropriate for the proper functioning of the national economy.

      • MonkeyMonk says:

        @HurtsSoGood: Why would a corporation care about voting when their lobbyists can just get direct access to the politicians?

      • ORPat says:

        @HurtsSoGood:

        See Santa Clara County Vs. Southern Pacific Railroad, 1886. The Supreme Court gave person hood to Corporations

        • crashfrog says:

          @ORPat: That’s a common myth, actually. There’s nothing in the Santa Clara decision that grants personhood to anyone. In fact the court specifically declined to address personhood issues in that case.

      • sketchy says:

        @HurtsSoGood: For legal purposes Corporations are people. Thanks ORPat for the citation.

        • dweebster says:

          @sketchy: Yes, through a scummy move by a court clerk that wrongly reinterpreted a judgement in a late 1800′s court case. [www.motherjones.com]

          Probably about time that gets corrected, as every “person” I know has a finite life, limits on their influence, usually is confined to being a citizen of one country, can be put in jail for wrongdoing, executed for killing someone, etc.

          • sketchy says:

            @dweebster: Mistake or not – that’s the way things are.

            Once you’re a member of the Supreme Court your opinion about it will mean something as well.

  7. I’m not impressed until I hear a proposal for LIMITING these crazy interest rates. 20%+, WTF?? Al Capone didn’t charge that!

    • NoWin says:

      @Mary Marsala with Fries: Interest rates are controlled by the states, not the Fed.

      That’s why the big banks have their CC divisions in states that are “liberal” to the corporate usury laws.

    • the_wiggle says:

      @Mary Marsala with Fries: noope. just yer kneecaps or whatever. having seen some of the insane rates upwards of 28% – hell, knee replacement surgery’s come such a long way that i’ll heal faster than my finances would at those rip off rates.

      @mythago: exactly

      @AMetamorphosis: yes we are. personal responsibility includes behaving ethically.

  8. FoxCMK says:

    I swear, credit cards were one of the most ingenious inventions of the 20th century. It’s just too bad it’s controlled by only two (maybe three if you count AmEx) large corps.

    As for the Fed, the more damage it takes the better.

    • johnfrombrooklyn says:

      You’re exactly right. Overall, the credit card industry is not very “capitalistic”. You essentially have 3 cards that control trillions of dollars worldwide. I know that banks actually issue the cards, but it’d be nice if the credit card industry didn’t operate like an oligarchy. @cmkennedy:

  9. gibbergabber says:

    Since banks are just legally sanctioned loan sharks, none of this matters. They’ll still continue to screw consumers without any fear or conscience.

  10. bobpence says:

    Prediction: The changes will be implemented, and banks will find a creative way around them that screws us, just like when they invented dual-cycle interest.

    • dweebster says:

      @bobpence: And/or Delaware’s Corporate/ Credit Card Industry handmaiden Joe Biden will write and push through whatever law they want to pay for. [article.nationalreview.com]

      Perhaps having “MBNA/BofA Biden” in the White House will do for that industry what Gore did for the environment as VP (little to nothing). Then again, look what Cheney did for Halliburton and KBR…

      Of course, McCain’s cast of evildoers will only do worse. This election is looking to be like choosing between a team who rapes little girls and a team that rapes little boys… Nader’s looking better and better.

  11. Maybe I’m naieve, but I don’t see the problem. Honestly I don’t.

    You don’t abuse the credit card system and it doesn’t abuse you. It’s really that simple.

    In the last 10 years I’ve seen my father use cash maybe twice. He’s fine. He doesn’t make a lot of money, but he finds out when there’s a promotion and he uses it to his advantage. He budgets to have everything paid off before the promotion ends, and sticks to the budget. And if he wants something but can’t afford to pay it off in a reasonable amount of time he doesn’t buy it.

    Compulsory financial management classes every year from k-12 would do a lot more to stem the credit problems we have in this country than “fixing” the credit card industry.

    When you use a fire extinguisher you aim it at the base of the fire, not the top of the flames. These reforms go after the flames. Education goes after the base.

    • thalensmom says:

      @RamV10: AMEN!

      • @thalensmom: I was about to say the same thing about your post.

        I’d like to add as well that anyone who thinks that this problem has a quick fix, it doesnt. There’s no way to flip a switch and get people to stop abusing credit cards. All we can do is start educating them and let it trickle up.

        • provolone says:

          @RamV10: Wouldn’t one quick fix be simply putting laws in place so that card companies don’t feel they are entitled to get their money back if they loan it to someone who may never be able to pay it back. If this were the case card companies might be more careful about the credit limits they hand out and make sure that they were getting their money back before they increased these limits.

          If limits were controlled in this way we might not have as many young people getting burdened with credit card debt before they are mature enough to realize what they are doing, or desperate people getting themselves in bad situations, or stupid consumers getting into bad situations.

          I admit that many consumers do dumb or irresponsible things with their credit cards, but blaming the consumer is such a cop out. The bottom line is; we do not want a society with massive credit card debt. Therefore, any system that leads to massive credit card debt is bad, even if consumers themselves contribute to the problem. Controls should be put in place that lead to a healthier situation regarding credit card debt. The controls proposed here probably don’t go far enough.

          • @provolone: How is that a quick fix? That’s rewarding the people who can’t take responsibility for their actions while punishing the corporations who were able to make money on stupidity.

            Pretty much goes against capitalism as we know it.

            And, in a few years the cycle repeats itself. It’s not a fix if it isn’t permanent.

            • legwork says:

              @RamV10: “…punishing the corporations who were able to make money on stupidity.
              Pretty much goes against capitalism as we know it.”

              That sounds like sarcasm, but niche sarcasm. I’m hoping!

              To the Dr. Evils in the crowd: I see this as an effort towards stable and predictable credit for all. Sure, charge higher rates, but no acting like a loan shark. It’s great that some can manage their finances, maintain zero balances, never pay interest, get all their rebates, etc, but it just isn’t cool for us to look the other way while the less fortunate get filched by slime-lords and their specially-crafted terms. That’s pretty much universal, be it on the street or with these vast, systematic, multinational filching machines.

              • @legwork:

                To the Dr. Evils in the crowd: I see this as an effort towards stable and predictable credit for all

                Since when did credit (especially good credit) become a right? You lie in the bed you make, and credit should be no different. Having good credit requires making the effort. If we can teach this to people when they’re growing up, they’ll make the effort.

                Most of them will at least. In the words of GnR, “some men you just can’t reach”.

                • legwork says:

                  @RamV10: Whoa, I’m not sure how you could have read the rest of my post and assumed I meant “credit rating” or “credit availability”. I intended that to mean a stable and predictable borrowing experience. Enough of shifting rules, billing dates, ad nauseum, that bump people from danger to ruin.

              • mythago says:

                @legwork: Financial industries always whine about how requiring them to behave will end up with horrible consequences to the consumer. As has been pointed out repeatedly, if they want to manage their risk, they should be doing that by carefully evaluating to whom they extend credit.

                Instead, they find it more profitable to issue credit cards to anyone who can fog a mirror, and then finding excuses to jack up interest rates and slap on fees whenever they can. That’s not capitalism, unless your definition of capitalism includes “any way at all to make money, including mugging little old ladies for their Social Security checks”.

    • thesepretzels says:

      @RamV10: Way too reasonable. Stop that.

    • SigmundTheSeaMonster says:

      @RamV10: Compulsory financial management classes every year from k-12 would do a lot more to stem the credit problems we have in this country than “fixing” the credit card industry.

      I do agree that some fiscal-responsibility management is needed but more like Grade 11 through College. Especially college where the dorm hall boards are plastered with CreditCard apps (that reward the RA).
      Yes, one needs to be responsible, but one also needs to know their compulsions and keeping them incheck.

      • @SigmundTheSeaMonster:
        Yes, one needs to be responsible, but one also needs to know their compulsions and keeping them incheck.

        But education goes a long way to reminding people that being compulsive with credit is a really bad thing. (think of it as giving the little angel on your right shoulder a lot more ammo to go after the little devil on your left)

        • thebluepill says:

          @RamV10:

          Your absolutly right;

          By the time a kid is in 12th grade, they can usually tell you all of the planets in the solar system, name all 50 states, tell you about the civil war and how to make a spreadsheet on the PC.

          They cant usually tell you:
          How to write a check.
          How your credit score effects your life and what it is.
          How a mortgage works.
          How a car loan works.
          How to balance a ledger sheet.
          How interest works.
          The list goes on and on… Its sad and the reason we have so many people failing financially right now.

  12. thalensmom says:

    I don’t think that reform is needed for the CCC’s, but for the consumers themselves. I used to abuse my credit, and now I’m seeing what a mistake that was, and I’ve reformed how I spend, AND how I pay the damn things off. I’ve learned a lot from coming here, and I don’t believe so much that it’s all the CCC’s fault. Sure there’s some pretty crappy cards out there, and sure, some people who’ve made bad descisions with their credit in the past NEED those crappy cards to “earn” back their good credit. But only if they learn from past mistakes, where I believe the reform should start to take place.

  13. lonebannana says:

    They’ll all be in trouble (banks) when people begin to realize that they can stop paying their credit cards, as long as they don’t want to worry about bad credit for the next 7 years… of course if you are already behind in your CC payments, you already HAVE bad credit…

    Hm…

    • theblackdog says:

      @lonebannana: Doesn’t the clock reset every time that credit card debt you defaulted on get sold to another collection agency?

      Actually, I have an ex that did just that, stopped paying his bills figuring he would just take the credit hit for the next few years. Too bad that also meant that he was never able to get an apartment without a roommate.

  14. crashfrog says:

    You don’t abuse the credit card system and it doesn’t abuse you. It’s really that simple.

    It actually does abuse you. That’s the problem. For instance, one of the abuses is credit card companies sending out your billing statement about one day before the payment is due, leaving you no time to get the payment in before you’re charged a late-payment fee.

    Compulsory financial management classes every year from k-12 would do a lot more to stem the credit problems we have in this country than “fixing” the credit card industry.

    Look, I really don’t think education is the answer, here. What, exactly, do you think people are ignorant about? How many people do you really think are under the impression that their credit card is a magic money machine, not a debt they have to pay off eventually? Everybody knows what a credit card is. What a lot of people – like you – don’t seem to know is that the profit model of credit cards has shifted from making money on the interest rate to gaming the rules so that regular people can’t help but break them, and then get soaked for hundreds of dollars in fees and fines.

    Sure, sure, it’s in the contract; but no K-12-level course is going to give people the advanced contract law background they’d need to understand that document. The credit problems of this country stem from pretty much one thing – wage growth has lagged behind cost-of-living increase for the past 40 years. People are in hock up to their eyeballs because they’re making less and less money as costs go up and up.

    • @crashfrog:

      It actually does abuse you. That’s the problem. For instance, one of the abuses is credit card companies sending out your billing statement about one day before the payment is due, leaving you no time to get the payment in before you’re charged a late-payment fee.

      I have 3 cards. They each mail me a statement on the 3rd of the month (give or take a couple days). The bills for all of those cards are due the 2nd or 3rd (again, give or take) of the following month.

      Not that it matters, I don’t buy things I can’t pay for, so when I use the card I go online and make a payment.

      Look, I really don’t think education is the answer, here. What, exactly, do you think people are ignorant about?

      I know plenty of people who truly and honestly think that Credit is “free money”, and don’t understand interest at all. Thinking back to my days in school, the only time I ever learned about interest was in math class when we computed it. There was never any “if you charge this much at this rate, you end up paying this much if you pay minimum payments.” That goes for mortgages too.

      I’ve never had a course in contract law, but when I get a CC offer that looks good, I read the contract 2 or 3 times. If I see something I don’t like, it gets shredded. There are people who see one and say “OOH! Free money!”. Thats what education would stop.

      • mythago says:

        @RamV10: You might want to take a second look at your credit card agreements. If you have the ONLY credit card in the US where it doesn’t say ‘we can change the terms anytime we want’, please let us know so we can all get cards from your wonderful bank.

        You’re right – you don’t understand. Predatory and dishonest lending practices have nothing to do with how careful you are as a consumer. They have to do with banks run by people whose full-time job is to set up ways to squeeze money out of you. And, unlike you, they are experts in contract law.

      • bwcbwc says:

        @RamV10: That’s the way my cards were until this past summer. All of the cards have moved up the payment due dates by about 5 days in relation to the statement closing date from their previous difference.
        A couple of the cards are now set up so that I only receive the bill 10 days after the closing date and the payment is due 10 days before the closing date. That leaves about 10 days for me to turn around the bill and for them to process the payment, including the time spent in the hands of the postal service. Fortunately, I’m able to pay online and I don’t live from paycheck to paycheck, so this isn’t a real hardship for me. But it’s clear that the whole payment structure is designed to extract fees from people who are struggling to make ends meet.

    • Zulujines says:

      @crashfrog: Ah yes. Finally someone who actually gets it. It’s hard for me to keep up with the people who never have financial problems and their worry-free lives. A lot of people struggle financially and they’re not just morons who don’t know any better.

      My favorite trick is when CC companies change the due date every month (sometimes by as much as a week) so you’re never sure when the bill is due. I’m sure they’re not hoping you accidentally pay the bill late and incur a $25 late fee or anything like that.

    • caligulala says:

      @crashfrog:

      Well said. The “don’t hate the player, hate the game” attitude doesn’t take into account the fact that the game is rigged. If a consumer trips up once, it’s essentially game over for them. Many people don’t have the luxury of a financial cushion and a small oversight or mistake in a game where the rules are constantly changing means that they simply can’t come up with the cash to cover all the fees they’ve accrued. Do the credit card companies really wonder why people are defaulting when their minimum required payment can jump by several hundred dollars because their check got there a day late? It’s high time there were some common sense ground rules forced on these usurers.

    • econobiker says:

      @crashfrog: “What a lot of people – like you – don’t seem to know is that the profit model of credit cards has shifted from making money on the interest rate to gaming the rules so that regular people can’t help but break them, and then get soaked for hundreds of dollars in fees and fines.”

      Exactly my point too! Their profit model went from making money on the merchant transaction (positive profits) to making money from created sanctions against the customer (negative profits).

      Why would one company issue one customer multiple cards with a low balance and NOT let the customer combine the card balances/credit limits? It would seem less processing and transactions to monitor for one card with a $1500 limit versus three cards with $500 limits. But there is the rub – they make more money if two or three cards go over limit than if one does…

  15. missjulied says:

    Corporate personhood debate: [en.wikipedia.org]

  16. SuffolkHouse says:

    Be Careful!

    Peter Finch died before he received his award.

  17. thebluepill says:

    You know.. I really like the idea of K-12 Finance Courses.

    We teach our children about science and history, yet we only give them a 1 semester course in “economics” that just covers the basics.

    Really.. Finance and money management is an enormous part of life, the leading contributor to divorce and the mark of personal success for most people. Having financially weak citizens will lead to the countries overall decline as well, like the crisis we are in.. Yet we only give the kids 9 weeks of high level and send them on their way.

    Most kids know nothing of finance, personal or otherwise when they graduate high school. Hell, half cant even write a check!

    So.. Yes, If we had a mandatory K-12 Finance Course, every year, just like science or literature, we would be a much better country as a whole.

    • @thebluepill: Where I went to high school economics was an elective too, and 75% of people didn’t even take that.

      But I can tell you all about what a crappy book Great Expectations is.

    • dweebster says:

      @thebluepill: Which is exactly why these sorts of courses are “pooh-poohed” by the high-rolling politicians and credit-card-advertising media with the overwhelmingly loudest voices controlling what is important to teach our children. Sure, education about the evils of usury will miss a few people, just like education about the downside of drugs or knowledge of our reproductive systems.

    • GreatWhiteNorth says:

      @thebluepill: Many years ago I taught grades 4, 5 and 6 … I integrated personal finance into the units I taught. Students wrote class cheques, on their class bank accounts… they earned the money in their account in class… when they used it all up, well, it was gone.

      This wasn’t hard to introduce in the classroom. Students know what cheques are. Students know what money is. They are quick to pickup on how to use these tools.

      What really would have been interesting is to introduce them to credit cards, cc interest rates, and cc debt. Fortunately, at the time I was teaching credit cards weren’t such a common tool for financial self destruction like they are today.

      So financial education can be done… and it isn’t hard to implement.

  18. British Benzene says:

    As far as consumer economics courses, we teach biology and evolution and a large portion of the US still believes in biblical creation. Stupid is as stupid does.

  19. DWalk says:

    Is it just me or does everyone in America need to rent “Fight Club” this weekend?

    “I flipped through catalogs and wondered: What kind of dining set defines me as a person?” ~ Narrator, Fight Club

  20. SpdRacer says:

    We need to improve general education before we start bogging the system down with additional courses in classes that probably wouldn’t be necessary if the education we provided now was worth a shit.

  21. floraposte says:

    I agree that it would be a good thing if people knew more about finance, but I don’t think it’s the “only answer.” I have good credit, decent resources, satisfactory education, and time to look stuff up, so I can easily avoid or flee cards that offer predatory practices. The fact that I don’t have to deal with them doesn’t mean they don’t exist, though.

    It’s not solely the individual’s responsibility to make sure s/he’s not preyed upon, attacked, hit by a car, or poisoned. Let’s give people as much knowledge as they can to avoid such things, but let’s also make sure the institutions that are designed to curb misuses can do so.

  22. mac-phisto says:

    i just wish they’d stop with the traps. the two-cycle billing, universal default, retro-pricing – it’s all nonsense. the one thing that pisses me off more than anything? due dates on days they don’t accept payments (sundays & holidays).

    unfortunately, taking away the income earned from these shenanigans means higher interest, less promos & smaller rewards for all. que sera, sera.

    re: compulsory financial ed – i think it’s a wonderful idea, but i really think it’s a waste of time before high school. k-8 is “building blocks” time – it’s much wiser to ensure that students have basic comprehension skills before trying to teach them how to manage credit wisely. still, a great idea.

    • Sudonum says:

      I think it was Eyebrows McGee who posts on these types of stories that in Illinois they have mandatory financial classes in high school and it seems to have little or no effect on consumer practices in that state.

      I’m with mac-phisto stop the shenanigans and most consumers wouldn’t have much of an (legitimate) issue with CC companies. I have excellent credit and pay off my balances every month, but since I have been traveling again for business I don’t get my mail and miss payment dates because they change monthly. American Express is the only CC I carry that has the same due date every month. Why is it that hard for a CC compay to do this? I signed up for e-mail alerts and I don’t get them, and it’s not because they are treated like spam. I finally got in the habit of checking my accounts online twice a month and paying any balance due in the next 15 days. And I love BofA who won’t let you pay the bill on their CC’s online with anything other than a BofA account. You have to call in and incur the “telephone fee” to pay with an account from a different bank.
      And yes, I know, that’s my fault for doing business with BofA.

      If they stopped the scummy practices they wouldn’t have this type of “uproar”.

      • @Sudonum: “I think it was Eyebrows McGee who posts on these types of stories that in Illinois they have mandatory financial classes in high school and it seems to have little or no effect on consumer practices in that state.”

        Yep, that’s me! I’m glad someone’s listening to my broken record.

        Illinois isn’t the only state with mandatory consumer ed, either. People routinely suggest “mandatory consumer ed will solve the problem.” Well, it hasn’t, so what’s the next suggestion? Is the curriculum for consumer ed really poor? Or does education just not help?

        (I honestly think part of the problem was that in high school, I didn’t give a flying flip about ARMs, though I vaguely remember learning about them. Most of it was totally irrelevant to me because I was 16 or whatever and can’t enter into ANY financial contracts until 18. It wasn’t until these things became relevant to me as an adult that I started really paying attention.)

  23. AgentTuttle says:

    This is a nation who’s economy is now based on debt. There is not enough money in existence to pay it all back.

  24. Saeculorum says:

    These sorts of manifestos and demands are ridiculous.

    Here’s my horrible credit card situation:

    I have never paid a cent in interest or fees to my credit card company. They have never charged me for service and my credit continually increases without me asking at about $2k/year. I get 1-3% off all transactions, so I get back some money every month. Included in my credit card is free warranty extensions, free rental car insurance, and free theft protection. Occasionally, a merchant tries to screw me over. Every time I’ve done the chargeback, the credit card company has responded quickly, professionally, and with no possible impact to my bank account. Once, I actually did a chargeback incorrectly to a company that put a rather misleading label on their charges. I informed the credit card company that I was in the wrong, not the merchant, and the credit card company refunded the charge anyway as a courtesy.

    Why can I do all that? I read what I signed! I know all the nasty practices a credit card company can do if I don’t pay. So, I do pay. Those practices should not be a secret to anyone – they’re presented up-front in ink when you get your card. Customers can’t be hurt by any company, ever, if they read what they signed. As a corollary, solving problems that result from not reading what you sign by regulating one party in a contract solves only a symptom, not the actual problem.

    I don’t know where this idea that consumers can’t be informed. It’s a dangerous idea. It’s going to hurt the consumers in the end, because companies can only respond to regulation with increased fees and decreased awards. Every cent you take off of a company’s profit margin is going to be replaced with an increased cent in fees – there’s no other way for a company to operate!

    • oneandone says:

      @Saeculorum: “Every cent you take off of a company’s profit margin is going to be replaced with an increased cent in fees – there’s no other way for a company to operate!”

      Of course there is. You’re assuming that the company is operating at peak efficiency, and that everything is a perfectly functioning system generating max profit with absolute minimum loss. Which I think is BS. Regulation – if it’s sensible and far-sighted – make you take another look at things that have gotten bloated, inefficient, or out of date. It leads to innovation & adaptation, and I’m sure there are cases when that ended up in lower costs. Or companies going out of business, of course. But nothing stays stagnant, and its unlikely that every parameter a company operates on is going to remain static. If you can’t adapt to any change without always raising prices, you’re not going to do very well in the long term.

  25. citybuddha says:

    Even though I have and use two very low interest CCs and have never had any real dramas (knock on wood)I would still like to see these regulations come to light.

  26. Jubilance22 says:

    I totally agree that financial education needs to take place in this country. I volunteer with a program that teaches children about finances, and saving. We teach them how to open a bank account, how to balance a checkbook, interest and credit, loans and securities. A lot of times we have parents who also participate in the lessons, because they don’t know anything about the topic either.

  27. AMetamorphosis says:

    It would be great to see some credit card reform.
    I believe the interest rates are beyond reasonable.

    Regardless of whether something is legal or not isn’t the issue … its the UNETHICAL business practices that people are fed up with.

    With that said, I have not had any of these fees, etc charged to me as I have a habit of going online and paying all credit card charges @ least once a week. I never look @ due dates because I don’t wait until the bill comes. I simply place the receipt in my wallet and when I get to the office or home I sign into my online banking and make a payment for what I charged. It really is that simple. Can’t afford to pay it off each month? Don’t buy it. Shold you NEED to purchase something and make payments over a set period of time, PLAN on how you intend to pay it off.

    I know I am considered a “deadbeat” by the CC companies because I get anywhere from 1 – 5% back on all my purchases and they don’t make money directly from me. ( although they do from the merchants I shop with ) But if you think about it, those of you carrying balances and not paying attention to what you did agree to are supplementing my 1 – 5% rewards.

    Its about personal responsibility for me.
    And yes, the credit card companies have become very unethical and dishonest.

  28. marv63095 says:

    I do grassroots organizing around this issue, so I have a bias, but I have literally seen thousands of stories about people getting burned by cc companies. And while consumer education is an important step, predatory lending practices are real. People who are smart and read the fine print and pay their bills still get burned. The industry needs to be reigned in. Because what happens when these corporations are left unchecked well our current economic situation is a great example.

    And these rules don’t go far enough but they are the best in a long long time to even see the light of day. Why?
    Because the financial services and real estate industries are far and away the largest federal campaign donors, giving more than $247 million in the 2007-08 cycle alone. And as a parallel example between 1998 and the end of 2006 the mortgage industry and its trade groups spent $187 million lobbying Congress, effectively blocking any efforts to ban abusive practices at the national level.

    Anyway, we are looking for more comments and for people to share their story. Here’s the link if interested:
    [www.consumersunion.org]
    [www.creditcardreform.org]

  29. lidor7 says:

    As a few people have mentioned, I think educating the consumer is the solution. The majority of credit cards seem reasonable and don’t go out of their way to prey on consumers other than trying their best to get you to sign up for one ranging from a bag of M&Ms to 10% off your store purchase.

    I think for must of us, paying off credit card debt in a timely manner is a no-brainer. But there honestly are people who just don’t understand. I have a friend who regularly says things like “I think I’ll buy , I still have at least one credit card that isn’t maxed out yet.”

    I think parents should educate their kids, and there should be a brief segment about credit cards senior year of high school. When I first went to college, my parents provided me with a credit card for necessities only that they would pay off. Anything extra I’d have to pay with cash. I think most people should start out like that. Parents get to monitor what you consider “necessities” and anything else you’ll feel the pain of any physical cash that you pay out.

  30. tck1000 says:

    It’s kind of ridiculous, all these rules on how one party can or can’t lend money to another party. I find it kind of ludicrous that consumers not only think they have any rights here, but that they have gotten congress and the Fed to agree.

    If you don’t like the terms of your credit account, which probably says in the small print that the terms can change at any time, don’t borrow the money.

    If you don’t like paying ever changing interest balances, pay off your entire balance every month.

    Stop your crybaby whining that it’s somehow the credit card company’s fault that you can’t make your payments on time.

    Stop living beyond your means and spending money you don’t have.

    Banks should be able to set whatever terms they want when they’re lending you their money. I fully accept that, and
    I am fully aware of it when I charge something.

    Just because a bunch of whiny consumers are too effing stupid to read the small print when they sign a legal contract does not call for more regulation.

    How about instead we put all this government attention and effort to work on the educational situation in this country, so that instead of more legislation and regulation we can have smarter consumers who don’t spend their way out of house and home and expect someone else to pick up the tab.

  31. brokeincollege says:

    “Banks should be able to set whatever terms they want when they’re lending you their money.”

    It’s NOT their money. Part of it is my deposit at that bank. And when using my money I want, nay, insist that the bank use it in the most ethical manner possible.

  32. brokeincollege says:

    You know, I’d love to change the terms of my money market account at Citibank at any time without notice. Every deposit I make at the bank is a loan to that bank. I might just decide randomly that I want 40,000% interest. If I sent a letter demanding that kind of interest, I’d probably get prosecuted for it. So why aren’t credit card companies prosecuted for it?

    If consumers don’t get to decide at what price they buy their money, Banks don’t get to decide what price they buy their money for either. They should be required to pay whatever interest rate that I dream up.