Posts
By SCOTT MAYEROWITZABC NEWS Business Unit
May 19, 2009
Credit card consumers will soon see expanded protections,
(ABC News Photo Illustration)
fewer fees and more clarity thanks to a so-called Credit Cardholders' Bill of Rights that is working its way through Congress. The Senate passed its version of legislation by a 90-5 vote this afternoon and the House has already approved its own version.
The Senate approved legislation that would stop sudden credit card rate hikes and make it easier for consumers to understand fees.
The two sides now need to reconcile a few differences and then send it on to President Obama who has said he wants to sign the act into law before Monday.
The legislation could add a bit of breathing room for many American families struggling to pay their bills. This legislation won't cap interest rates, as some had hoped, and the government can't force consumers to make prudent financial decisions. But this bill, within nine months, would require a new level of clarity for consumers where the rules of the credit card game would be at the very least clearly spelled out. For the rest of the story click here.
It's Time to Read the Fine Print of Any New Cardholder Agreements
Just in yesterday from the New York Times via the Huffington Post is this article
By ANDREW MARTIN
Published: May 18, 2009
Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.
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.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.
For more of the story click here.
For a discussion of changing bank credit card policies Listen to this NPR episode.
Credit Card Companies Lowering Borrowers' Limits
by Larry Abramson
Morning Edition, April 8, 2009 · Lenders, worried that borrowers may soon be out of work and unable to pay, are cutting the limits on credit cards. But consumers are fuming because the lower limits can hurt their credit ratings.
Just in yesterday from the New York Times via the Huffington Post is this article
Credit Card Industry Aims to Profit From Sterling Payers
By ANDREW MARTIN
Published: May 18, 2009
Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.
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.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.
For more of the story click here.
For a discussion of changing bank credit card policies Listen to this NPR episode.
Credit Card Companies Lowering Borrowers' Limitsby Larry Abramson
Morning Edition, April 8, 2009 · Lenders, worried that borrowers may soon be out of work and unable to pay, are cutting the limits on credit cards. But consumers are fuming because the lower limits can hurt their credit ratings.
