All us PIFers might be changing how we use cc soon!

[cobaltnv]

An interesting (and disturbing) article in the NY Times about potential changes to credit card terms. 

www.nytimes.com/2009/05/19/business/19credit.html?hp

The snippets show that PIFers like myself may soon be rethinking how we use credit cards. I for one would likely go back to an all cash basis if interest starts being charged immediately or if large annual fees are imposed.

"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."  

[haulingthescoreup]

Wow! No grace period at all, huh?

I agree. My cards will be sock-drawered in perpetuity if they pull this.

At some point, the banks are going to have to realize that they need to keep some incentives alive if they don't want to lose all their customers.

[Anonymous]

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@cobaltnv wrote:

..  and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups."  

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What do they think a lot of people will do if they immediately charge interest? Right, giving their cards back and that means for them loosing a lot of fees from the merchants. Idiots!

[Red1Blue]

If they start charging high AF how many of you keep all your cards active and alive? If we cancel too many cards how will it affect the fico scores? I have close to 30+ cards. I dont want to pay AF on all these cards.

[cobaltnv]

I agree Buckzball, if the ccc start doing this my cc will be sitting in the sock drawer. I am guessing they are assuming that enough people are so used to paying with the fantastic plastic that they will not be able to change their habits. I must admit they are probably right on that one--still a bad idea!

[cobaltnv]

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@Red1Blue wrote:
If they start charging high AF how many of you keep all your cards active and alive? If we cancel too many cards how will it affect the fico scores? I have close to 30+ cards. I dont want to pay AF on all these cards.

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If the ~6 cards I have started charging high annual fees and/or removed or changed the rewards structure I would close all the cards but one. Since I would not be using the card for anything other than an occasional coffee utilization would be low and therefore no worry about the scores.

[Anonymous]

I think it's a scare tactics article directed at those representatives that are supposed to vote for the new credit card legislation. I mean, I have a CU card that pretty much meets already most of the requirements of the new credit card act. That CU has no need to harrass their customers in the way that is proposed in the article.

If the big card companies want to hand over their business to CU's and small local banks, they can go ahead.

[FretlessMayhem]

On ther other side, I bet Amex might see a little bit of a spike in charge card applications.

[athensguy]

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@Anonymous wrote:

I think it's a scare tactics article directed at those representatives that are supposed to vote for the new credit card legislation. I mean, I have a CU card that pretty much meets already most of the requirements of the new credit card act. That CU has no need to harrass their customers in the way that is proposed in the article.

If the big card companies want to hand over their business to CU's and small local banks, they can go ahead.

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+1

This article is pretty much propaganda from bank lobbyists.

[Watchmann]

Ha, saw this coming a mile away.  Some of it is posturing for sure, but big change is coming.  Those who rooted on the Federal Government to 'do something' about those nasty CC companies will rue the day of getting them involved.  The upshot of this is those who are responsible, use credit wisely and PIF each month will now subsidize those who don't.   It's all in the fairness principal, of course.  For next time, remember, elections have consequences.