Good News For Next Year
By Dian Vujovich
Earlier this afternoon, the Associated Press reported that the Senate passed— by a whopping bipartisan vote of 90-5—to stop credit card companies from doing a lot of the nasties they’ve been up to. Things such as deciding to up the interest rate someone is paying for the use of their card, lowering credit caps or adding exorbitant fees seemingly just for the heck of it will become no-no’s. Hopefully.
The House is supposed to be on track with this and President Obama said to possibly be able to sign the bill by week’s end. I’m figuring by month’s end. In any event, it’s good news and much overdue. (Hope I’m not charged for that.)
On the other hand, once a law is put in place banks will have nine months to clean up their customer-costly credit card practices. I’m thinking that during that time frame banks will be able to figure out a variety of other ways to charge their credit card customers more for their services, become bigger sticklers about how much credit they allow individuals to have, and come up with more ways to raise the bar so they can minimize their risk of lending. Anyone alive more than four or five decades knows that’s coming down the pike no matter what Congress, or the president, says or does.
But enough grousing. If enacted the new law likely will mean that companies will have to do things like post their credit card agreements on the Internet and let customers pay their bills online or by phone for free. Free? Well, we’ll see if that really happens.
Additionally, before hiking the interest rate a customer pays, banks will have to provide them with an explanation of why 45 days before the rates are increased.
The Senate bill also clamps down on young people: If they are under 21, they’ll have to prove that they can repay the debt or that a parent or guardian will do so in the event of a default.
Again, we won’t see any of these or other changes in credit card practices for at least nine months—if not until July 2010. Until then, Kiplinger.com ferreted out some credit card companies they thought presented good offers. If you’re in the market for more debt, check out the Kiplinger’s piece at: http://finance.yahoo.com/banking-budgeting/article/107012/Credit-Cards-You%27ll-Love.
In the meantime, save like a squirrel. Living is expensive.
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