What the New Credit Card Laws Mean to YOU
Published on - January 13th, 2010 (Modified on - August 29th, 2011) (by J.D. Roth) This is a guest post from Adam Jusko, founder of IndexCreditCards.com, an information and comparison site for credit cards that maintains a list of over 1200 cards. You can follow Adam on Twitter for quick credit tips and opinions. I’ve mentioned Index Credit Cards many times before, most notably in my post from 2006 called “The Only Credit Card Guide You’ll Ever Need”.
Last May President Obama signed into law a sweeping set of rules and regulations concerning the business practices of credit card issuers. Known as the Credit Card Act, the new laws promised a level playing field 
where consumers would be treated more fairly and credit card terms would be easier to understand.
But, much like your favorite credit card agreement, the law had something nasty buried in the fine print — no part of the law would take effect immediately. Instead, certain pieces of the law didn’t take effect until August, and many others have an effective date of February 2010. Credit card issuers used the window between the law’s signing and its actual enforcement to raise rates, slash credit limits, or even completely take your card away.
Card issuers claim the new rules restrict their ability to price cards based on risk, and will lead to higher prices for everyone. Politicians might call the card issuers’ reactions to the new law “unintended consequences,” and tell you that leveling the playing field unfortunately means that some people get leveled on the way toward a fairer marketplace. (Actually, no politician would ever say that.)
What’s the truth? What exactly do these new laws do? And, what can you expect in the coming years when you use your credit cards or attempt to get new ones?
Let’s start with what the law actually says. It’s long, so I’ll bullet point it as much as possible. (Go here if you want to read it in all its glory.)
Now playing
Here’s what went into effect in August of 2009:
- Credit card issuers must give you 45 days notice if they intend to raise your rates. Further, they must allow you to “opt out” of the rate increase and pay your existing balance under the old rate terms.
- Credit card issuers must send bills at least 21 days before the due date.
What it means: Credit card issuers can no longer jack up your rates with little warning, and you now have the option to decline the rate increase. However, declining an increase means you can no longer use the card and it gives the issuer the freedom to increase your minimum payment to either twice its previous level or to a level that guarantees the card will be paid off within five years. So, if you decline, be sure you have a better card option going forward.
Coming soon
Next up are the regulations due to kick in next month. I’ll take them in chunks, based on rules that naturally go together:
- Credit card rates can’t be increased on outstanding balances — except for the increase that happens when a 0% or other low interest introductory rate expires on newly-issued cards or when a customer is 60 days late on a payment.
- If a customer is 60 days late on a payment and an interest rate is increased, the issuer must dial the rate back to the original level if the customer pays the past-due payments and makes 6 straight months of on-time minimum payments.
- Card rates can not be increased in the first year of a card agreement (unless there is a limited-time low-interest introductory rate as part of the original card offer).
- Low-interest introductory rate offers must last at least 6 months.
- Customer payments must be applied to higher-interest balances first.
- If a card is marketed as “fixed rate,” the card issuer must reveal exactly how long the rate is guaranteed to remain the same.
- Credit card issuers can not use “double-cycle billing,” a practice that allowed issuers to charge interest based on the average balance from the past two months, even if last month’s balance was paid.
What it means: Out of all the new rules, the ones above are probably the greatest victory for consumers, and probably the most harmful to card issuers’ profits. In general, they say that any purchase you make must be charged interest only at the card’s interest rate when the purchase was made. Even if the issuer hikes your rate, the higher rate only would apply to new purchases going forward. Credit card issuers are really screaming about this — they believe it stops them from penalizing bad customers who turn into bigger credit risks, and they threaten that it will stop them from accepting many consumers altogether.
From my perspective, it’s simple fairness — even if a person becomes a bigger credit risk, I see no reason issuers should be able to “bait and switch” by increasing the rates on previous purchases made under different terms. This practice has forced many credit card customers to get into desperate financial straits. What card issuers may be missing in their anger is the possibility that fewer cardholders will default on their cards under these regulations, because they won’t suddenly be saddled with payments that are double those required previously.
Here’s the next set of rules:
- Payment due dates must be the same each month. If a due date falls on a weekend or holiday, the due date must change to the following business day.
- Issuers can’t charge fees for payments by certain methods. For example, issuers can not charge customers more if they pay by phone than if they pay online.
- Issuers can’t allow customers to go over their credit limits and then charge “over the limit fees” unless the customer has first “opted in” — specifically asking for the service.
- Issuers must include a place on the bill that shows customers how long it would take to pay off their balances if only the minimum required payment was paid each month. (Other similar disclosure rules are still being developed.)
What it means: Most of these fall under the “sneaky tricks” portion of the rules, in order to stop issuers from charging you fees for things that seem quite reasonable. For example, you shouldn’t be charged a late fee if your payment can’t be delivered on a due date that happens to be a Sunday, and card issuers shouldn’t be giving you a credit limit and then allowing you to go over that limit as a “service” that charges you an extra fee.
The last two rules are targeted at specific cardholder groups:
- Issuers may not charge upfront fees that are greater than 25% of a card’s credit limit.
- Issuers may not issue cards to people under 21, unless the customer has proof of income or has a co-signer who accepts responsibility for the card.
What it means: The first point is targeted at “subprime” cards for those with poor credit. A common industry practice when targeting bad credit customers has been to offer a low credit limit and then charge upfront fees that eat up most of the limit. For example, you sign up for a card with a $500 limit, but there are $450 in fees in order to get the card, so you start off with a $450 balance and only $50 in actual spending power. Desperate customers have been willing to take this deal, but no more.
The second point may kill the college student credit card market. Card issuers have long targeted college students, trying to “get them early” in hopes of creating brand loyalty. Lawmakers felt too many students were getting cards they couldn’t pay for, leaving college with thousands of dollars in debt.
What the future holds
While the Credit Card Act has thankfully rid us of many unfair practices going forward, the card issuers’ frenzied attempt to either hike rates or kick out unprofitable customers has left many between a rock and a hard place. In the past, a customer who was treated poorly by one credit card company could simply turn to another, with the likelihood being they’d be welcomed with open arms. Today, and at least for the next year or so, I believe consumers will have difficulty obtaining new credit cards, especially consumers with average credit or worse. This is bad news for those stuck in a high-rate situation.
What comes later is likely to be a good-news/bad-news situation. Credit will become more accessible again, but in the future it will more likely come with an annual fee, or with fewer if any rewards on purchases, or with new fees that have yet to be devised. The credit card industry has proven to very adaptable, and while it’s a sure thing that they’ll play nice legally, that doesn’t mean future credit card agreements will be written with your best interests at heart.
J.D.’s note: Don’t forget that you can opt out of this madness by simply refusing to use credit cards in the first place. I have one personal card, but there are times I’m tempted to go back to my “no credit needed” ways.
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Just to clairify: I’m not saying that the market is doing a good job now at self-regulating. But the fact is that they don’t have to. We’ve designated the government to do that for us. I was trying to point out that by giving someone else this responsiblilty, we’ve given the market permission to push the limits as far as possible in order to maintain profit as high as possible. Yes, stockholders pushing for profits is part of that problem too. But I maintain that if the volume of regulations that we have now was not in place, and never had been, companies would respect their customer more rather than just fear regulation. When a company looks out for it’s customers above it’s bottomline, I think everyone benefits.
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Credit cards… a two edged sword for sure! I have a love/hate relationship with them like I’m sure most of all of us do. Let me tell my tale with credit. I was raised by fiscaly conservative parents in a small Iowa town. I.e. pay cash, don’t spend what you don’t have, keep credit buys to a minimum, save for a rainy day, deal localy and use store credit if you have to use credit etc. Okay, i’m 18 and graduated H.S.(1988) and have started school at a local community collage, have a part time job or two, and live in a house with some buddies that we split the rent on. At no time did my folks ever encorage me to get a credit card, and for that matter I don’t realy remember getting Card apps. Remember this was the 80′s and I could use cash or a checking account for all my needs. Forward to age 23 or so. Still living in my home town, working full time with a steady job, banking at the same bank that I literly grew up 3 blocks from. Its Christmas time and my girlfriend and I are shopping at a Sears. She tells me to apply for a Sears card as they practicaly give them to anybody. So in a busy store I walk up and apply. Of course I was turned down right on the spot, humiliated in front of a lot of people. The saleswoman smirked that I had pretty much no credit and a card “Wasn’t happening”. Two more years go by and Sears finaly “accepts” me as a credit risk. Forward to 1999. I’m twenty nine and have payed back a small student loan and two car loans EARLY. I check into financing some of a used motorcyle through H.D. credit. You guessed it! I have NO credit. Small town bank never reports to credit score agencys; why should they? You are always just going to use them (STB) arrent you? So… after jumping through hoops of fire I get a loan through First Credit and pay the damn loan off 2 years early. Now I have credit card companys up the wazoo wanting to sell me money. 2005 rolls around and I buy a brand new truck. I finance about half the purchase and pay it off in 2.5 years. Credit is now 800 or so and everybody wants to sell me money. Which brings us to the present. Creditors (banks/cc companys) are something I try to stay away from as much as possible. They are not intrinsicly Evil but are preditory to say the least. Handel them like a poisonous snake that you are trying to milk for the venom to make a anti-venom from. Remember they are trying to sell you all the money they can at the highest possible price, they are not a “friend when you need it” like the B.S. comercals say. Sorry this is kind of rambling and of the wall but my blood boils when credit company issues come up!!!!!! P.S. Thank you again J.D. for all you have done with this site. I recomend it to everybody. P.P.S Good luck with the garden this year, I’m looking through seed catalogs right now.
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These rules are just fine as far as I’m concerned.
I have no problem with the 21+ rule either, note that it doesn’t keep 18-21 year olds form having credit but just requires them to have sufficient income. Frankly I don’t see why they should be giving anyone credit cards without sufficient income.
If these rules keep credit card companies from issuing credit to some people then thats best for everyone. They really shouldn’t be giving free flowing credit to people with really poor financial situation or credit history anyway.
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How with the 21 yo rule affect someone who wants to buy a house after college? Will one year of credit history be as good as four years when they apply for that home loan?
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Great post. It is helpful to see this information. I’m really frustrated by this law, particularly as it affects those of us who handle our credit cards appropriately. For myself, I have great credit and always pay my balance each month. I put everything on my rewards credit card so I can get the cash rewards. From what you said near the end, it looks like I might be stuck with annual fees and no more rewards due to some peoples’ inability to handle credit cards.
Where is the personal responsibility?
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Old enough to handle automatic weapons, kill, and be killed in a foreign country; not old enough to use a credit card? Which one of these situations is more absurd?
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TheMightyQuinn:
This doesn’t answer your question…but what’s the rush? My 23 year old daughter shares an apartment and doesn’t own a car either. She takes public transportation (I know this is not an option everywhere). It isn’t that she couldn’t afford to, she makes pretty decent money, she just does not want the financial burden of a house, a car, property and auto insurance, property taxes, repairs, maintenance and the cost of gas. That’s a HUGE chunk of your income! Instead, she saves a good chunk of her money for the future (maybe a car and a house someday?) and does some “living” (travel,etc.) while she is young and has little responsibility.
Just a thought…..
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To Samantha #39 who was worried that Discover will think she is unprofitable because she pays off her balance every month: Discover charges a high % to the vendors you buy from (why a lot of places take Visa/MC but not Discover), so as long as you use the card, they are profiting from you! And they will probablt grandfather you in since you already have a card in good standing, but you can always call that number on the back and ask.
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Overall I think the changes are good. (I’m actually a bit shocked to find out that raising the interest rate on existing balances is not already illegal.) I agree that there can be over-regulation in some cases, but I think that most of the new rules here simply force companies to compete on their actual merits rather than by fleecing consumers by way of technicalities, fees, gotchas, and loopholes or by taking advantage of consumers’ naïveté.
I was initially going to say that I thought the over-21 restriction was a misstep, but after having read the relevant text of the bill, I’m left wondering: Why wouldn’t “indicating an independent means of repaying any obligation arising from the proposed extension of credit in connection with the account” be required for *all* applicants, regardless of age?
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@21Jen: I haven’t read all the rest of the comments, but what about the drinking age in the U.S.?
21 as the age someone can be handed a credit card without a consignor or proof of income doesn’t seem that random to me.
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To MarkF:
I sympathize with your frustration, but just like any system that is abused (or is abusive)…EVERYONE pays. Whether you realize it or not, you are paying to use your card. As someone else mentioned here, the vendors you buy things from are charged a percentage for you to use that card. But the vendors don’t really pay that percentage…you do…it is figured into the purchase price along with all their other costs.
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Okay, I see a lot of madness going on about the under-21 issue, but the key words here are “proof of income.” PROOF OF INCOME. IF YOU HAVE A JOB, YOU CAN HAVE CREDIT AT 18. And suggesting that loan sharking is a capitalist virtue is ridiculous; maybe 100 years ago when you could beat the stuffing out of someone charging 50% interest, but not these days — how can you beat Visa without some kind of intervention?
When I was 18, I put down my parent’s income on a credit card application (my personal income was about $300/month). Visa sent me a card with a $6,000 limit. I didn’t go out and spend it all at once, but it actually encouraged me to be IRRESPONSIBLE rather than otherwise; I stayed in a college I couldn’t afford, rather than tranferring to a community college, and I racked up almost $10K in credit card bills in 4 years, making an average salary of $1000/month. Allowing companies to do this sort of thing isn’t profitable for anyone; I finally settled with my card company for about 12% of what I owed when I was 22 years old.
I think these rules are fantastic, and I am so glad to see something like this pass! We have not been a straight capitalistic society for 150 years, so people who dream of de-regulating the market are simply trying to turn back time. And, as someone who has watched a credit card company switch my interest rate from 7% to 39% in a month, I welcome these rules with open arms.
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That’s right, the credit card companies did a lot of rate changing and limiting in the last 45 days.
John DeFlumeri Jr
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#62 Missy, I cannot understand the point you’re trying to make. YOU put your parent’s income level, instead of your own, on a credit card application, Visa sent you a card with a limit in line with that income, and because of that you were in $10k debt? Apologies if you’re just trying to tell a personal story, and not blame Visa, but with your capital letter “IRRESPONSIBLE” I gather that you’re saying Visa shouldn’t have given you a $6,000 limit, which they only did because YOU put an untrue income level.
#58 Kat, thank you for your help! I was hoping to get an answer here rather than call, because I didn’t want to alert them to my situation if they weren’t already aware. Thanks!
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#47 pixiepanda I think there is way too much concern about not having a credit history without a credit card. I have a friend who although was gainfully employed, avoided credit card use. She knew she wanted to get into a house. So she got a store credit card and used and paid it off every month for 8 months. No problem getting a competitive home mortgage.
Personally, I am all for these changes. From what I can tell, yes if you become a greater risk they can change your rates, just that they have to inform you ahead of time and opt out. Same thing letting you go over your credit limit and hitting your with charges; you can agree to have them do that but you have the choice to opt in. Unless you are over 21 can’t get a credit card unless have steady employment? Again a good idea. Can always still get a debit card and learn to use it responsbily until then.
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I’m really interested at J.D.’s closing comment. I took out a credit card a few years ago to build some credit history. I’d never had a card before, and simply didn’t show up on credit reports. As far as credit agencies were concerned, I didn’t exist.
Now, while my history is still considered ‘young’, my score is very good. Since I’m not considering any more major (car, house, etc.) purchases in the near future, I wonder if I still need a card.
I do use it for things like reserving hotel rooms, and some online shopping, but that’s it.
At what point can you safely say you don’t need any credit cards?
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That last bit about not having credit cards in the first place is the best advice. While it is a good thing to have protection against credit card companies, the best protection is not to do business with them.
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JD,
Thanks for putting this legislation into layman’s terms. At least, for the time being, it will curtail some of the preditory lending practices. And, it provides some protection for the most vulnerable, our young people.
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i can not believe that “fiancial expert” are advising people to toss out their credit cards.
if you know how to use your credit cards properly, you will be BETTER OFF.
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I’m all for the 21+ rule, for that matter ANYONE getting a credit card should have to provide proof of income (or spouses income if married and they stay home). It’s amazing to me that credit card companies offer credit to those without sufficient income. It’s stupid to get credit without income but from some of the comments here it sounds like you think that’s okay for your kids to do. Are you crazy! My parents would have killed me if I’d gotten a credit card in college when I wasn’t working.
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Its all great info, but the best part is the last.
This is where JD says just don’t use them!
Better yet, only use them to your advantage.
Pay your entire balance in full every month, and just rack up some free cash by getting one with the best cash back option.
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#69, @rubin pham:
“can not believe that “fiancial expert” are advising people to toss out their credit cards.
if you know how to use your credit cards properly, you will be BETTER OFF.”
Nice straw man. Neither the author nor JD are making this argument. JD mentioned the option of choosing not to use credit cards. That’s a perfectly legitimate piece of advice – anyone is welcome to take it or leave it based on what works for them.
If you try poking around this site a bit you’ll see that there are many articles on *responsible* and smart credit card use.
And I realize this is a cheap shot but you might want to learn how to use proper grammar, spelling and punctuation before making snide and uninformed remarks.
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Banks are targeting you and the politicians are right there helping them along. This piece of the article is all you need to read:
“… no part of the law would take effect immediately. Instead, certain pieces of the law didn’t take effect until August, and many others have an effective date of February 2010. Credit card issuers used the window between the law’s signing and its actual enforcement to raise rates, slash credit limits, or even completely take your card away.”
Your elected officials gave the banks a huge head start in their race against the people.
And using your cards “wisely” doesn’t work anymore either with banks moving due dates, charging interest over a two bill cycle … It’s a whole new world now.
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Re the over-21 rule: maybe there could be a New Buyer credit card, like a New Driver designation, or some sort of learner’s permit for credit. Low, low limit, have to pay/majority of amount, etc.
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I think the new rule that money must be applied to the highest interest balances to be common sense, and if they can apply this to the credit card industry, than how about student loans? I hate that I can go online and look at each of my individual student loans, which have two different rates of interest due to the fixed interest charged when I took out loans one semester as a grad student. Since I am still a student, I can’t consolidate, but I am starting to pay them off early. However, I CANNOT choose which loans to apply my money to, the money I pay gets applied equally across all the loans. So they are basically forcing me (and everyone else), to pay more money in interest than I should have to. You can’t even specifically request to have money applied to a particular loan. Ridiculous. Sorry, but I’ve been needing to make that rant for a long time.
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These are all good things for us. If these new laws stop people from living above their means (even if it means they need to live in a cardboard box) we win.
Our society has become too hung up on obtaining material possessions RIGHT NOW.
It’s time to help each other live in a way that we can afford to live. Even if that means living with our parents til we are 30.
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This was an excellent synopsis of the most important points that concern consumers. A real service! Thanks!
Anne @alivenkickin
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BTW, to Jeff #76:
I totally agree. I get infuriated with money magazines and commercials that tell us that the WORST possible thing that could happen is for our kids to live with us as adults (after college, for example) or for parents to live with their adult children in their later years.
For most of history the multi-generational household was the NORM! And it has many advantages with(for instance) grandparents being able to help with, and be involved with their grandchildren.
I would love to see our society go back to one that is truly family-oriented where a multi-generational household is seen as a positive force, not the worst thing that could possibly happen.
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Anne: I totally think kids should live with their parents (if possible) for a while after college/technical school/etc to get established and save some money. However I can tell you as someone in that position that my parents are driving me crazy and I can’t wait to move out as soon as I find an apartment that’s suitable (I have the added problem of a disability that prevents me from driving in a rural state with little public transportation). It’s not that great a situation for long term.
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There is something I would like to set straight: not everyone who has a credit card balance or has difficulty handling their finances is necessarily “irresponsible”. “Just use your credit cards responsibly and you have nothing to worry about!” It is not that simple. “Drink responsibly and you have nothing to worry about.” “Eat responsibly and you won’t have to worry about your weight.” Etc. Some people just cannot do it, or have a much more difficult time of it.
EVERYONE has a vice. Everyone. Some are more noticable than others….like an alcoholic, a overeater or a spendthrift. Maybe you are really good at handling your finances, but fall short somewhere else. No one is perfect. The credit card and banking institutions, marketing companies, etc. recognize this and use this to their advantage. Enticing a person who is not credit worthy with a credit card is like enticing an alcholic with a drink. “Come on, just one, you can handle it, it won’t hurt you.”
My point is, let’s have a little more compassion. If you are working the credit card companies to your advantage, congratulations…we admire your strength and willpower in this area of your life. Just remember, money isn’t everything….
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@ Suzanne, #34.
The only way I know how to correct your completely false statement is to go to Mises.org web site.
Read the articles, encourage others to as well. You’ll find out exactly why an unhampered free market is the only way to save us from our current impending doom.
Don’t believe me? Go there and see for yourself.
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Trisha,
I agree that it is strange that a woman under 21 cannot get a credit card but she can get an abortion. The law was targeted to protect students. To me it seems to make more sense to say that people who don’t have an income (ie. students & others) shouldn’t get a credit card. If someone is 20 years old and is working, why should they be denied a card? So I agree with you in part. But while we do live in a capitalist society, our capitalist society had many of the protections that you decry up until about 1985. I don’t know how old you are but when I got married at age 19 back in 1973, there were usury laws which made it illegal to charge more than 18%, payment dates were always the same, and there were 30 days notice of a bill. I worked in collections so I remember those things well. This law doesn’t turn us into socialists, it simply restores regulations that were in effect for decades and protected our capitalist society from excesses of greed.
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A strong rundown on a difficult and wide-ranging topic. It provides very clear explanations for the regular consumer as well as the consumer who is in debt. I particularly like the clarity of the timetable approach. Very useful.
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#65 partgypsy: Did your friend get her home loan before the recession began, perhaps? My coworker only started trying during the last year. He said he has one credit card that he uses and pays off each month, but that he was turned down by every place he tried to get a home loan because he didn’t have more credit cards to his name.
I’m not at a point to buy a house yet, but I’m concerned that maybe the same thing will happen to me since I do my best not to use credit cards and to pay them off immediately when I do.
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@#42 Storch Money – thank you for better articulating my previous point about college students and jobs. The “under 21″ rule has no impact on people 18-20 with incomes. If a college student chooses not to work (or is encouraged not to by his/her parents, like some posters mentioned), then they should also be encouraged not to get credit cards unless their parents will cosign. If a student works in the summer to save up money for the school year, then what’s the point of a card in the first place? He/she should only spend what they have budgeted from their savings.
@#54 TheMightyQuinn, who asked “How with the 21 yo rule affect someone who wants to buy a house after college? Will one year of credit history be as good as four years when they apply for that home loan?”
The additional 3 years of credit history is insignificant to the loan officer when compared to the loan applicant’s proof of cash on hand for a sizeable down payment and proof of financial capabilities to afford the loan payments. If you’re just out of school, but have 20% down and proof of income to show you can afford the monthly payment for the mortgage payment (and no other major debts lingering around), you can get a loan. If you’re just out of school, with an unstable work history and no money down, and you have a few credit cards that carry a balance, you probably will be seen as a risky candidate for a home loan, regardless of your length of credit history.
Creditors would rather see a work history than a credit history, which is why I argue that it’s better for a college student to get a job before getting a credit card.
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@84 pixipanda: I have one credit card. I’ve paid it off biweekly (on pay day) in full for the past 5-6 years, without fail. In late Nov 2009, I was able to get a mortgage loan no problem. Some notes: My mortgage loan was for an amount about 150% of my salary (very reasonable loan) and I paid 20% down in cash. I also have no other debts or outstanding loans.
If your coworker is having trouble, perhaps he is asking for more loan than his income justifies, or he isn’t offering to put enough forward as a down payment, or he’s got other debts that he didn’t mention to you. But I can absolutely guarantee that having 4-5 credit cards is not a prerequisite for getting a mortgage loan, especially in today’s economic downturn.
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The under-21 rule is sad, really. If you’re under 21 you need some kind of income or a cosigner to get credit.
And if you’re over 21 you don’t? That’s the confusing part. Why should anyone have credit if they have no way to pay it back?
I had credit cards in college. I also had an income. My husband had credit cards in college too, and no income. Guess which one of us graduated with $10k of credit card debt.
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Jane said: “I’m just happy to read an article that distinguishes between “credit card issuers” (i.e. banks) and the actual credit card companies. It drives me crazy how many people don’t understand how the system of credit that they use works.”
I am one of these people. I do not understand this at all. Anyone care to point me in the right direction?
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Thank goodness for our savior, the government. When I left home, I felt so alone without my parents sheltering me, protecting me, and fighting my fights for me.
This is proof there is nothing the government can’t do. I really love my nanny
OR
People can stop using predatory issuers and let them die out. Maybe stop using credit cards altogether if it gets too ridiculous. I will concede the government should intervene if fraud is occurring and a citizen sues an issuer. Other than that, I’m not interested in another nanny law. The road to hell is paved with good intentions…
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What credit card companies are doing RIGHT NOW is ratcheting up rates in advance of these changes. It’s nuts.
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@86 Mike: Thanks, that really takes a load off of my mind! It was the first time I’d heard anything like that, but it reminded me of when I was younger and trying to rent a house for the first time, back when I was completely against using a credit card at all.
@65 partgypsy: Thanks again for answering and for being patient with my questions.
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I have to say the age 21 requirement is a very good idea. I witness first hand how irresponsible some folks can be with obtaining credit.
I worked near a community college. Every semester there was a table set up at the local Polo Loco for students. Bank of America would have students sign up for credit cards. If you completed the application you got a free lunch at the restaurant. To be fair other banks did this as well.
No explanation of what the students were signing or the repercussions. I know that some students were responsible people.
I also know that some students became in debt after buying textbooks, impulse lunched and tickets to the show.
It was a predatory practice that had to be stopped.
In other news, I just got my phone call imploring me to accept the fee to protect my right to go over my credit limit.
No, I will instead protect my right to be financially responsible and pay on time. I declined, twice. I’m thinking about dumping the card too.
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“Also, does it strike anyone as strange that in many states a female under the age of 21 can have an abortion without parental consent, but can no longer have a credit card without them cosigning?” Trisha, #4 … This statement killed me. Individual human beings are capable of autonomy starting in early adolescence, and they have a right to their own bodies. You don’t have to house your child past 16 or 18 in most places, so why should parents retain sovereignty over their bodies?
I’m actually pretty surprised to see that this comment wasn’t moderated out for being a blatant hot-button pusher. It’s like mentioning something is “It’s like when Hitler…” just to get a rise. Cheap.
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AMERICAN EXPRESS,MY CARD CUT OFF ON 1/22/10, I RECEIVE MY STATEMENT ONLINE,MY DUE DATE IS USUALLY ON THE 16th FOR YEARS,NOW ALL OF A SUDDEN MY DUE DATE HAS CHANGED TO THE 7th, THAT’S ONLY 16 DAYS TO PAY FROM CLOSEING DATE. IS THIS LEGAL?
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@Connie: Don’t be too surprise if the date changes when you log on to pay. I frequently get statement emails from Amex that say the bill is due on the 1st and when I log in on the 1st, the due date has changed to the 12th. Happens a lot with them.
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I just got notified that one of my credit cards is now going to be charging a $60 annual fee. This is a no-frills cards with no rewards. Unfortunately this was the last debt on my repayment schedule because it’s fixed at 1.9% (a crazy balance transfer for the life of the balance and the transfer fee was capped at $50). Now we’re deciding if we should opt-out and risk them upping our minimum payment a lot or taking the annual fee hit.
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@96: Jennifer: If I were you, I would accept the annual fee. If you opt out, they will likely cancel your account. You could try to transfer the balance, but you would probably pay a transfer fee higher than $60. Plus, you would be hard pressed to find a similar interest rate deal.
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i am seriously sick of this crap with these companies trying to asses past due amounts when the bill isnt 60 days or more past due and fees that you didnt authurize or had any clue about
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The new law will help but, there should have been a clause so the credit card companies couldn’t raise your rate before the new law. My interest rate went up 7% before the new law went into effect. Now that’s being sneaky!!!!!!!
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My main complaint with the new regulation is that all payments are applied to the highest interest. I have a card that has two promotions on it. One is a deferred interest (no interest if paid in full by due date, no monthly minimum payment) which is due in October 2010. The second expires in 2012 and has a minimum monthly payment. Interest is higher on the 2012 promotion. Therefore, all my payments, even the amount above the minimum payment, are applied to the 2012 expiration date. I used to be able to call every month and have them reapply part of my payment (which was a real pain), but now they tell me that they cannot reapply, even at my request! How am I to get the 2010 paid off without interest?
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