w00t

Consumers FTW?!

Hot. Hopefully the house doesn't water it down.

What about the stuff that is going to screw responsible people since they have to pay for those who are not.

@I Love New Jersey: This argument has never flown with me- if you're using credit "responsibly" and getting free airline miles, etc, and those benefits go away when you stop predatory lending, how responsible are you being, really? You're just using the CC companies as a conduit to siphon wealth from the less responsible.

I'm not against it, but you can't really complain when your benefits (which were subsidized by idiots) go away when the govt protects the idiots. You're admitting culpability in the same sentence as implying victimhood.

one or the other, buddy.

@RonDiaz: well the house already passed their version. It's a matter of committee now.

Harder to give credit cards to people under 21.

I think my financial history would have been a lot easier had that been the case 10 years ago, rather than throwing credit cards at a foolish college kid with no job.

Is any of this retroactive? Can rates that were increased for no reason in the past few months be brought back down?

This is really good news. I'm still iffy on how this effects people with poor/ok credit who want to get BETTER credit. Will it be harder to get a card with a fair interest rate and a decent limit? Especially after the other posting about what the credit card companies are threatening to do.

@I Love New Jersey: Didn't take long for this talking point to make it through the internet.

"We have to allow predatory lending, or else I'll lose my table scraps!"

What about rate caps? The stuff listed above seems more than resonable. The talk last week was that they would put a cap on rates that can be charged.

@bornonbord: Credit cards are not the only way to improve your credit - and if they are what got you into trouble in the first place, you probably shouldn't look for more. You can buy a car in your name, buy a house, open any type of account where you make monthly payments (cable, cell phone, etc.), pay all bills on time, etc. Obviously most people aren't in the shape to make large purchases, but becoming more responsible and paying off debits will help.

Never say that us middle and upper-class folks never took a hit for "the greater good."

now comes the fluff and lobbyists!

ATTACK!

@bornonbord:
at first it might be hard, but you'll also see the FICOs self right eventually when this has had time to impact credit at large

@I Love New Jersey: You have it all wrong with credit cards. It's the other way around: the irresponsible people pay for the responsible. Your copy/paste complaint doesn't work here.

But can we bring guns into Nationa Parks again?!?!?!?

@HIV 2 Elway: Rate caps were defeated.

@I Love New Jersey: I'm certainly not a pro-regulation guy (to the chagrin of the many totalitarianists that frequent this blog), but none of what is listed above sounds unreasonable to me. Nor would I expect the credit industry to punish those of us that play by the rules and live within our means to make up for this. If they do, people like me will simply jump ship to those that don't or whittle down the number of credit cards used.

The question is, what else is in this legislation?

Glad to see our government protecting people from themselves.

@Ben Popken: In that case, the compromised outcome seems great.

@William Brinkman: *we

A year later, I'd still take an edit button over a klondike bar. =(

@William Brinkman:

You middle and upper-class folks have NEVER taken a hit for the "greater good", and you still haven't! You do however carry water for and take regualar hits from the wealthy.

This could really hurt those who accept the fact that using a credit card and having a balance will end up costing them a bit more, but can't make some expensive purchases outright.

Airline tickets is a good example. It cost my family over $5,000 a year ago Christmas to fly to visit my husband's family overseas. We didn't have that kind of money up front, so we charged it. We accepted that it would take us a while to pay it off, but it was worth it to visit family.

We had planned to do the same this Christmas. Now that the credit card company can raise our rates sky high before the new laws kick in, we don't know that we can go because of how much more it will cost us to pay every month, or having it take a lot longer to pay off the balance (the airline prices so far are the same as last year).

@Ben Popken: I'm not thrilled, but am OK with rate caps not being part of the package. It's an easy metric to shop around for, and am confident that the market will tamper crazy rates on rational, responsible card owners.

@italianscallion33: I totally understand. But people with little/no money, and diligently paying off massive debts (student loans) will find it hard to get credit.

Especially in this economy...

It feels pretty darned good that a change has taken place in Washington. I couldn't imagine something even close to this passing several years ago.
Yay, people bothering to show up at the polls to vote!!

While this is all well and good, am I the only one who thinks this really isn't going to make a lot of difference for people who get into the worst trouble? I don't see anything that really prevents predatory lending - that is, giving credit to people who really shouldn't have it anyway. Irresponsible people will continue to read (or not) the plain English contracts, with explicit high interest rates, and continue to not pay on time, run up huge debt and get into trouble regardless. This is the nature of being irresponsible...

@I Love New Jersey: Proof that "I <3 NJ" avatar badges indicate even worse quality of thought than Facebook badges.

@italianscallion33: EHhh, new tradelines are better than doing doing.

Cable, cellphone,etc- Does not report.

Buy a house or a car? Good luck getting approved with no open tradelines...

None of these rules inhibit CC companies from charging low-end customers for the actual cost of their services. So there is absolutely no reason whatsoever for the costs to high-end customers to increase ... unless it was a case of low-end customers subsidizing high-end customers all along.

I suspect this was a case of "redistribution of wealth" these companies were doing ... just not the kind that Joe The (unlicensed) Plumber was whining about.

"Rates can be increased within the first year"

I hope that is a typo.

A reasonable legislative compromise and news that the Dems won't fund the closing of Gitmo until there is actually a plan in place for the detainees? All in a day? USA USA USA!!!

Now where is that bill to take out the Mandatory Binding Arbitration clauses from a wide range of contracts (including credit cards)?

@wcnghj: So do I. As it stands, that doesn't look like much of a reform action.

Fantastic ... on his desk by Friday!

@HIV 2 Elway: It would be icing on the cake if we could get another $800k for Murtha's airport that supports seven flights per day. Too much to ask. Sigh.

@Trai_Dep: A 90-5 vote required support from the evil right wing in addition to the nation's altruistic benefactors that are currently in charge and fixing everything that is wrong with America. This bill would have passed no matter who controlled the White House.

@italianscallion33: Paying regular bills on time, or even paying rent on time does not build better credit..

Now if you're late and they send you to collections it does harm your credit..

To build credit you have to have a lender that reports to the credit bureau. The way I did it when I was younger was open a secured credit card.. I made on time payments on that for a year or so before they would release the security, and then I got another card to build more history.. Then I had a little bit of a hard time buying a car because of my "limited history" but then a dealership came along that gave me a great rate and I've been paying on time ever since.

Now I have good credit. Yay me. lol.

@ckaught78:
Glad to see our government protecting people from predatory lending practices.

fixed it for you...

Before this bill was passed I tried to get a credit card from Capital One and Citi but both declined me. I was 18, a college student making $7200 a year and had $12,000 in a savings account with Capital One. I was declined for a $500 limit for by both companies. I don't see why it is needed for the government to make it harder for CC companies to give credit to people under 21. I do not know the details but will this screw me and my preexisting card with USAA. (I am 19) I don't like carrying cash.

I think it will be interesting to see what survives the Senate/House compromises and how this will actually effect the CC companies.

We have seen too often where new laws and regulations have different results then anyone suspects.

The 5 who voted against it were...

John Thune (R-SD), John Kyl (R-AZ), Lamar Alexander (R-TN), Robert Bennett (R-UT), and Tim Johnson (D-SD)

@wcnghj: Yes it is a typo. From the link "Rates could not be increased within the first year, and promotional rates would be in force for at least six months."

@TEW: Sorry but I forgot to add this. I would have liked to see the bankruptcy reform act of 2005 repealed instead of these new laws. I think that law has made the credit card companies and other loan sharks go crazy because they know it is near impossible now for you to void your debts. If you can wipe out all of your debts than a lot of these loans and credit cards would have never been issued.

@I Love New Jersey: Yeah, because they're REALLY going to start charging interest immediately or charging annual fees...

They NEED the people who pay their bills to offset the people that don't. If they chase the non-risky, responsible cc users away, which those proposals will, all they're left with are subprime accounts and they are bankrupt.

NOT. GOING. TO. HAPPEN.

And yet they still find people like you who will believe this crap they put out there???

Yikes.

@TEW: Debit Card? I understand your pain, but you ARE in the minority. The VAST majority of 18-21yr olds should NOT have access to the unreasonably large and unreasonably expensive credit they currently do.

I applaud you for being fiscally responsible, and I'm sorry for you that this just makes it harder, but at the same time, I'm glad SOMEONE stepped in to curb the College Credit Card drama.

As great as this is (and some of this is needed to account for the uneven level between the lender and debtor), I'm just waiting for the law of unintended consequences to kick in.

Will companies start bringing back Annual Fees? Or tie reward programs to annual fees? Reduce rewards? Or just cut limits?

Something will happen to adjust for the change in the rules to account for risk.

@wcnghj:
It's a typo. The actual news article says "can not" be increased in the first year.

@Tim Marvin: Not likely. The House has to vote too.

@Big Poppa Pimp: You're wrong. Bush/Cheney would have forced Congress to change the bill so that it gives no-bid contracts to Haliburton, kills polar bear cubs by setting them on fire, eliminates all taxes for oil companies, and imprisons all of the GOP operatives responsible for blowing up the New Orleans levy so that the truth will never be heard.