At first glance, the sweeping credit card legislation that passed the Senate on Tuesday looks like a huge victory for consumers. The bill, after all, contains relief from penalty fees and certain interest rate spikes.
But for people who pay off their bills each month, and milk the card rewards programs for everything they’re worth, there is some cause for concern.
For months now, the card companies have been threatening to cut rewards programs sharply to make up for revenue lost because of the new restrictions.
My guess, however, is that this talk is just so much saber-rattling.
Those of us who pay our credit bills in full every month will have to look carefully at each new notice that comes from the credit card company. I’ll have to decide if I want to pay an annual fee or instead get a debit card which accesses only one specified checking account. I may do that anyhow just for security reasons.
Well, that is a new experience. I, as a conservative, agree with the spin of a New York Times article. Us conservatives don’t want to hold the “little people†down. We want to create an even playing field so that all people have the opportunity to get ahead. Measures that promote responsible management of credit cards on both sides of the contractual agreement is long in coming. It is good that they are including gift cards in the bill. I remember my embarrassment and anger when I tried to buy myself a Christmas gift, and the clerk at the register informed me that my less than one year old gift card depreciated down to zero value.
You can’t legislate financial self-discipline.
Although credit card cards have made it easier for us to ‘buy things’ and delay our payments for what we have bought, they have also made it possible for irresponsible/dishonest people to spend and live well beyond their ‘means.’
And, when a person consciously and willfully spends beyond his means and then reneges on his debt, that use to be called THEFT. What’s the moral/ethical difference between wilfully writing a ‘bad check’ and willfully spending money with a credit card and then reneging on the resulting credit card debt?
I understand the problems with credit card companies and their unethical interest practices, but those practices are ‘common knowledge’ and to my knowledge, nobody has forcibly cased people to use credit cards.
The unethical credit card practices should be curbed to protect the innocent and the just-plain-stupid. Sort of like putting ‘training-wheels’ on a tri-cycle.
Re: #1 – Katherine,
You may want to rethink the debit card scenario. It is usually easier to dispute a charge with a credit card than with a debit card where the money is already gone from your checking account. I don’t specifically remember my Federal Reserve Regs., but I believe the liabilities which accrue to card users when their cards are lost or stolen are generally more limited for credit cards than for debit cards.
Thanks, Daniel, I know, and that’s why I have always used a credit card, paying the balance in full every month. The banks are going to have to pay for these changes somehow. If it means charging me a reasonable annual fee, I’ll probably stay with them. If they begin to charge interest from the moment of sale, as some are suggesting they might, then I’ll convert to cash, using my debit card at the bank before I go shopping. For large purchases, I’ll get a bank check if necessary. The problem would be internet purchases, where I can’t use cash. This change, which sounds so simple, could have far-reaching effects on lots of business models.
It sure does, #5. Thanks again, Barry, for making life worse for Americans. We’ll have plenty of time, of course, to balance our checkbooks with 10 times the check volume while we wait in long lines to have the government physician deny our medical treatments.
Anglican First #3:
[blockquote] … made it possible for irresponsible/dishonest people … [/blockquote]
I think that this isn’t representative of most people who get over their head. I think they do it unintentionally. I remember an invoice from J C Penney for $20 fell behind my table causing me to pay it a day late. After I calculated the charges added to my next bill, it worked out to be 8000%. Needless to say I never used that charge card again.
I think a more fair criticism against the borrowers is that some of them have a general sense of entitlement about what treasures they think they need to acquire and deserve. Also, children starting out on their own think that they can automatically enjoy the same affluence that their parents do. While children are considered adults at the age of 18, they really have not experienced frugality or understand about slowly building a good credit history. Remember also that we used to have the credit card banks within our own states where they could be regulated. Now it is mostly interstate commerce, so let the Federal Government add some controls.
Incidentally, every credit Mastercard and Visa I ever owned was sold off to another company. I think the reason was that I didn’t carry any balances. Don’t use your check card as a debit card, but use it as a credit card and be careful not to have too much money in the account to risk against fraud, but enough to cover your weekly or monthly expenses.
#5 Katherine
That is why I refuse to use a credit card for cash and since I am paying my card off I look forward to slicing my card account to ribbons!!
I try not to use either credit cards or debit cards. When I do need to pay with a card rather than cash, as at a gas station, I usually buy a Wal-Mart gift card and use that at a WM affiliated gas station (it’s cheaper, anyway and you save three cents per gallon).
Otherwise I use cash. I do have ONE credit card that I keep for emergencies, such as medical emergencies. So if I get a statement that shows ANY use, I know when and where I used it and can spot the fraud immediately.
JE
Fla