The credit card industry is in a constant state of change. The CARD Act, signed by President Obama in May of 2009, is dishing out its new mandates for credit card companies in three phases. Part two went into effect yesterday, February 22, 2010.
Here’s What My Credit Card Said
Think your paycheck is for your eyes only? Think again. Americans are surrendering over more and more of their personal information with each passing day — and your paycheck is the latest bit of personal data that’s now out in the open.
The final rules issued by the Federal Reserve under the CARD Act will now require credit-card companies to examine your income when you apply for credit as a means of determining your ability to make payments. The examination of your income, among other factors, can be used to determine whether or not your application is approved, the size of your credit limit, and/or whether you may be pre-approved for certain offers: Read the rest of this entry »
According to the October 2009 Senior Loan Officer Opinion Survey, lending standards remain tight. The good news, according to the survey, is that tightening standards have eased somewhat from the “peaks reached late last year.”
While we know this general information comes as no big surprise, we believe it’s important to review the current lending conditions to determine if consumer and business lending is headed in the right direction.
Senate banking committee Chairman Chris Dodd proposed a legislation today that would freeze the interest rates on the existing balances of an estimated 700 million credit cards.
While Dodd’s camp maintains that the legislation reinforces the Congressman’s opinion that “more consumer protections were needed,” many critics see the proposal as another “political maneuver” by the lawmaker who is seeking reelection:
Mr. Dodd’s proposal seemed aimed at reconnecting the Connecticut Democrat with voters, many of whom have questioned his close ties to big banks after he was tied to a sweetheart loan scandal. The Senate ethics committee cleared him of violating any rules, although his poll numbers remain shaky.
We called it! While some industry experts like Curtis Arnold of CardRatings.com said that they didn’t expect the recently-enacted credit card reform to impact good customers, we warned readers back in May that it was inevitable.
It’s simple: if you take away the credit card companies’ ability to raise rates, then they’ll simply develop new and “creative” fees and charges to nickel and dime their customers. Perhaps “nickel and dime” isn’t entirely fair since fees and charges are two of the main sources of income for credit card companies (emphasis added): Read the rest of this entry »
We’ve been following the fallout, both good and bad, from the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (the CARD Act). One of our favorite provisions is the requirement that credit-card bills get mailed out at least 21 days before payment is due, instead of the usual 14 days.
While not all of its provisions are law yet — most take effect next February — one of them will make it more difficult for those under 21 to get a credit card:
(Update1): The Office of the Comptroller of the Currency (OCC) issued a bulletin on Wednesday regarding the specific provisions of the credit card reform that have already taken affect. The bulletin pertains specifically to the 45-days notice the card companies must provide cardholders when or if their interest rate will be changed (emphasis added):
The bulletin describes an interim final rule issued by the Federal Reserve Board that requires banks to notify customers 45 days in advance of any rate increase or significant changes in credit card account terms. The rules also require lenders to disclose that their customers have the right to reject those changes.
Are you happy about the new credit card reform? Chances are, if you’re a responsible, even quasi-responsible cardholder, the answer may be “no”. While some of new rules have already taken affect, the bulk of the changes don’t begin until February.
Here’s just a few of the upcoming changes: Read the rest of this entry »
If you’re interested in sharing your experience with your credit card account, the Consumers Union wants to know about it:
Credit card reform passed but we’ve got months before the protections go into effect. We want to monitor what credit card companies are doing in the meantime and expose their sneaky tactics.
Has your bank been charging you extra fees on your various accounts? Saddled with losses from rampant foreclosures and credit card delinquencies, banks and credit unions say they have been forced to raise fees and charges in order to maintain a competitive edge in today’s unique economic environment:
“There is an economic storm that has made revenue fall,” said Michael Moebs, an economist and chief executive of Moebs Services, an economic research firm in Lake Bluff, Ill. “Fee income is basically where banks and credit unions can offset both loan- and investment-related losses.”
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