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| Porn Users Forum » New US Credit Card Law: Will It Affect You? |
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| 05-21-09 02:32pm - 5694 days | Original Post - #1 | |
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Drooler (0)
Disabled User  Posts: 1,831 Registered: Mar 11, '07 Location: USA |
New US Credit Card Law: Will It Affect You? In the US, President Obama is due to sign, tomorrow, legislation on how interest rates may be raised by credit card companies. The law goes into effect in nine months. On the face of it, it looks good in that credit card holders will have fewer problems with high interest rates. But I've been reading about a down side to this, which is that credit companies are going to compensate for their losses by 1) reinstituting annual fees, even for their best borrowers, and 2) eliminating the grace periods before interest begins on a purchase; that is, interest begins as soon as you buy. There's an article about it at http://www.nytimes.com/2009/05/19/business/19credit.html Frankly, I don't see this as a potential improvement. It looks more like a game of moving the goal posts. If new annual fees and the vanquishing of the grace period were to take place, would it affect your behaviors in signing up for sites? I wanted something new, so I left England for New England. Edited on May 21, 2009, 02:35pm | |
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| 05-21-09 04:49pm - 5694 days | #2 | |
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Wittyguy (0)
Active User  Posts: 1,138 Registered: Feb 04, '08 Location: Left Coast, USA |
x Edited on Apr 20, 2023, 01:06pm | |
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| 05-21-09 05:00pm - 5693 days | #3 | |
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lk2fireone (0)
Active User  Posts: 3,618 Registered: Nov 14, '08 Location: CA |
My impression is that we will be paying more to use a credit card, not less. I don't see where "on the face of it, it looks good in that credit card holders will have fewer problems with high interest rates." "Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit." Supposedly people with bad credit will pay smaller penalties, but everyone will be paying a higher real interest rate (with no grace period), in addition to an annual card fee. The banks are justifying increased fees and higher rates partially because their charge-offs are rising. But that's what normally happens during a recession. Banks can charge 20% or more on credit cards. They can pay less than 1% on savings accounts. The new law "does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure." I don't see this as beneficial reform. | |
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| 05-21-09 10:16pm - 5693 days | #4 | |
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turboshaft (0)
Active User Posts: 1,958 Registered: Apr 01, '08 |
I have not read too much about the bill because I have never had too many problems with my credit card (that's right, I only have one). From what I have heard it seems like the bill is designed for the average moron who is too stupid to only purchase what he or she can actually afford, unlike the apparently too few who are responsible enough to actually handle a credit card. Now, after reading this article, it looks like I will have to pay because "the legislation might have the broad effect of encouraging card issuers to become ever more reliant on fees from marginal customers as well as creditworthy cardholders -- 'deadbeats' in industry parlance, because they generate scant fee revenue." Great, I was wondering when my credit card company was going to get around to screwing me over for being a good (i.e. 'deadbeat') customer, and now it looks like they will finally have the chance. Of course they will immediately lose me as a customer and I will find a company that does business with responsible adults without some kind of good credit fee, or, as Wittyguy smartly suggested, just use prepaid cards. Concerning Drooler's original question, this is probably the best way to pay for a site -- prepaid cards. It would be nice if more sites could use Paypal, since they can transfer funds (not credit, but money you actually have) and they are pretty secure, though I understand some members here at PU dislike their service, so we could be screwed either way. "It's incredibly obvious, isn't it? A foreign substance is introduced into our precious bodily fluids without the knowledge of the individual. Certainly without any choice. That's the way your hardcore Commie works." - Gen. Jack D. Rippper, Dr. Stranglove | |
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| 05-21-09 10:30pm - 5693 days | #5 | |
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Toadsith (0)
Active User  Posts: 936 Registered: Dec 07, '07 Location: USA |
The big thing that the bill may help is consumers' credit scores. High interest rates and constant lowering of the credit limit as the consumer pays off the card means their credit score never improves (since their card seems always near the limit), despite their good behavior. "I'm not a number, I'm a free man!" Second Grand Order Poobah in the Loyal Order of the Water Buffalo | |
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| 05-21-09 11:03pm - 5693 days | #6 | |
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turboshaft (0)
Active User Posts: 1,958 Registered: Apr 01, '08 |
Well, at least if they start charging annual fees it will be stated in plain language and not-so-fine print. "It's incredibly obvious, isn't it? A foreign substance is introduced into our precious bodily fluids without the knowledge of the individual. Certainly without any choice. That's the way your hardcore Commie works." - Gen. Jack D. Rippper, Dr. Stranglove | |
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| 05-22-09 02:14am - 5693 days | #7 | |
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Drooler (0)
Disabled User Posts: 1,831 Registered: Mar 11, '07 Location: USA |
I don't either, in answer to both statements. It's being touted as reform that is beneficial to the consumer (the "face of it" being presented to the public), but I think it's just going to make things worse. If necessary, and it probably will be, I'll have to shop around for cards that don't gouge me. We'll see if "free market competition" works, with companies competing for customers by continuing to offer grace periods and no annual fees. I wanted something new, so I left England for New England. | |
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| 05-22-09 02:31am - 5693 days | #8 | |
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lk2fireone (0)
Active User Posts: 3,618 Registered: Nov 14, '08 Location: CA |
The theory behind a good/high consumer credit score is that it reduces the cost of credit. Right? But this new law will, basically, increase the cost of credit because of changes: 1. an annual fee for the credit card. 2. eliminating the grace period on each charge. 3. eliminating the rewards program for using the card. What the New York Times article seems to ignore is that the companies where the credit card is used, pay fees when the card is used. The credit card companies/banks make money from the companies where the card is used, as well as from the customer who owns the card when the customer pays interest and other fees. If, somehow, the average credit score is raised by the new legislation, at the same time that the cost of credit goes up, the consumer is not better off. He is paying more money for the same amount of credit. That reminds me of when my mother received a rate increase notice from her health care provider: They stated they were raising her monthly premium, at the same time they were reducing her coverage. The notice said this was to my mother's benefit, because the health care organization would be financially stronger. So my mother paid more money for less health care coverage. And I could not understand, if there was truth in advertising, why they could legally claim that was to my mother's benefit. My guess is that truth in advertising does not apply in this instance, because if you pay more and get less, you are not better off. The health care organization is better off, because they are making more money. But that money was coming from my mother and the other members of the health care plan. | |
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| 05-22-09 11:29am - 5693 days | #9 | |
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Toadsith (0)
Active User Posts: 936 Registered: Dec 07, '07 Location: USA |
It may increase the costs involved using credit cards, but the credit score's importance isn't about credit cards for the most part - but rather loans. Buying a car, or a house, going back to school, starting a business - all of these loans can be directly and strongly affected by your credit score. In regards to credit cards, my guess is there will be a sudden drop off of rewards programs, fee free cards, and grace periods and then they will slowly come back as the cards continue to compete with each other. "I'm not a number, I'm a free man!" Second Grand Order Poobah in the Loyal Order of the Water Buffalo | |
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| 05-22-09 11:49am - 5693 days | #10 | |
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Wittyguy (0)
Active User Posts: 1,138 Registered: Feb 04, '08 Location: Left Coast, USA |
x Edited on Apr 20, 2023, 01:06pm | |
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| 05-22-09 12:37pm - 5693 days | #11 | |
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turboshaft (0)
Active User Posts: 1,958 Registered: Apr 01, '08 |
It really isn't that big of a deal, but just because we have had something in the past does not justify it being brought back. Getting rid of rewards and "custom" credit cards, neither of which the bill seems to address, would be a good start because it could help teach people that credit is a privilege and should be used for need not rewards or points or any of the other lures that are designed to make consumers use their cards more. I hope it does help the country, but I think people need some basic understanding of the concept of credit, not just bills with larger print or some kind of credit card bill of rights. Yes, the card issuers are not exactly open about the true nature of their practices, but I can't totally blame them for making money, or at least being very creative in trying to. It is the companies that send out multiple pre-approved offers and promise numerous extras that really have nothing to do with maintaining good credit, but ultimately it is the consumers who accept them and misuse them. This might hurt the economy some at first as consumers, regardless of their credit scores, drop cards and spend less because of either the clearer terms or new fees, but it could ultimately create more manageable debt or less of it. Maybe, as Drooler mentioned, the companies will start to compete for the customers with good credit and they will benefit from new business. "It's incredibly obvious, isn't it? A foreign substance is introduced into our precious bodily fluids without the knowledge of the individual. Certainly without any choice. That's the way your hardcore Commie works." - Gen. Jack D. Rippper, Dr. Stranglove | |
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| 05-25-09 08:30am - 5690 days | #12 | |
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Drooler (0)
Disabled User Posts: 1,831 Registered: Mar 11, '07 Location: USA |
Yeah, what's the big deal? It's not like the credit card companies are sending out card offers right, left, and center anymore to encourage people to accumlate debt and debt servicing, now that the average American family carries $8,000-$10,000 of it. What's a little more? It's just an annual fee and no grace period, anymore. (Sounds like music to the ears of the card card business.) Besides, we've all got more important things to think about, like ... packaging creep. (And guess who brought that up?) I wanted something new, so I left England for New England. | |
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| 05-25-09 09:03am - 5690 days | #13 | |
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lk2fireone (0)
Active User Posts: 3,618 Registered: Nov 14, '08 Location: CA |
I got my first major credit card back in the 1970s. As best as I can remember, it was a "no annual fee" card. By major card, I mean it was either Mastercard, Visa, or Discover. I don't remember which. But I'm not talking about a credit card from a chain of stores, which I do not consider a major credit card. Edited on May 25, 2009, 09:07am | |
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| 05-26-09 11:46am - 5689 days | #14 | |
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Wittyguy (0)
Active User Posts: 1,138 Registered: Feb 04, '08 Location: Left Coast, USA |
x Edited on Apr 20, 2023, 01:06pm | |
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| 05-26-09 12:02pm - 5689 days | #15 | |
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Drooler (0)
Disabled User Posts: 1,831 Registered: Mar 11, '07 Location: USA |
Yeah, they're fuckin' with us in all kinds of ways. Hamburger Helper costs the same but the pkg keeps shrinking. Pay for the groceries with the credit card (need I say more on that?). Then take it home -- property taxes, rents, etc. going up but the school district can't make ends meet, either. And now it's tough to finance those important home improvements 'cause credit's gotten tight. Makes you want to say, "Fuck it!" and go gambling or just buy a lottery ticket. Maybe it will at least help the elderly. Eh! Whatever. I wanted something new, so I left England for New England. | |
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| 05-26-09 12:43pm - 5689 days | #16 | |
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lk2fireone (0)
Active User Posts: 3,618 Registered: Nov 14, '08 Location: CA |
I, for one, really enjoyed Hamburger Helper when it first came out. I don't remember if it was back in the 1960s or 1970s, but I liked the Lasagna and Beef Stroganoff the best. I can almost taste them, and it's been over 30 years since my last time. Package creep. I think the real reason they do that is so, as we get older, we don't have to lift the heavy grocery bags that we could lift in our youth. Also, unless you're using a credit card, modern grocery prices sure help to lighten our wallets. A one pound loaf of nice bread now costs $4.00. Back in the late 1960s it cost around 29 cents. Sales tax in California is now around 9.25% (depends on what county you live in). Back in the 1960s, sales tax was 4%. Since this is a straight percentage increase, the government is taking a larger and larger percentage of your money as time goes by, especially when you consider the effects of inflation. | |
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