New Credit Card Regulations

[MidnightVoice]

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gettintherequick wrote:

I, personally, dont need a single one of the CC that I have, from a monitary sense.

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If you PIF you can actually use cards to your benefit!!

[FretlessMayhem]

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@Anonymous wrote:

I'm generally in favor of a small federal government (after all, I was raised in the Capital of the Confederacy, where we were taught that the Late Great Unpleasantness was fought in defense of State's Rights...)

But this one I think should be handled by the Fed. I don't like the idea that just because Delaware (for example) has nothing/very little in the way of usury laws, the CC can use that to get around other states' stronger laws. I have no say in Delaware's legislature! Most of us don't, actually...

-MsMS

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Now, I readily admit that I can be completely wrong on this, but wouldn't the CCCs have to conform their practices to the laws of the state the consumer lives in?

For example, I live in Virginia, the only state in the county that bans radar detectors. Now, when someone from North Carolina is driving through VA, they have to disable their radar detector for the duration of their stay. They don't get an exception because they are based in another state.

Wouldn't be conceptually the same with CCCs in states with stricter laws?

[Anonymous]

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MidnightVoice wrote:

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gettintherequick wrote:

I, personally, dont need a single one of the CC that I have, from a monitary sense.

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If you PIF you can actually use cards to your benefit!!

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Oh absolutely! I do enjoy the rewards, cashback offers and discounts that some cards offer. No question about it. I do PIF and it is handy to have some of the quirks that comes with the cards.

At the same time though, these little gems are the things that lure the unexpecting or uninformed in and can cause longterm finacial dismay. I just wish that there could be guidelines set into play that would help protect the young, uninformed or just someone that has fallen onto hard times. I know it isnt the CCC's fault that some people get in over their heads, but should they have the right to take SUCH advantage of them? And if not, then who's job is it to protect those people? I guess that is the whole question of this thread.

[FretlessMayhem]

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@Anonymous wrote:

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@MidnightVoice wrote:

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@Anonymous wrote:

I, personally, dont need a single one of the CC that I have, from a monitary sense.

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If you PIF you can actually use cards to your benefit!!

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Oh absolutely! I do enjoy the rewards, cashback offers and discounts that some cards offer. No question about it. I do PIF and it is handy to have some of the quirks that comes with the cards.

At the same time though, these little gems are the things that lure the unexpecting or uninformed in and can cause longterm finacial dismay. I just wish that there could be guidelines set into play that would help protect the young, uninformed or just someone that has fallen onto hard times. I know it isnt the CCC's fault that some people get in over their heads, but should they have the right to take SUCH advantage of them? And if not, then who's job is it to protect those people? I guess that is the whole question of this thread.

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Yeah, I just fundamentally disagree that anyone is taken advantage of. When a rebuilder starts out with a First Premier card, all of the fees are spelled out on the statement. If they don't wish to pay them, they can not activate the card. If you go over the limit, you pay the fee. The fees are pretty clearly explained in the Ts and Cs. Failing to read the fine print, in my opinion, is not an excuse. That's like someone saying they shouldn't be responsible for a reckless driving ticket because they didn't know the fine costs more when you are going 20mph or more over the speed limit.

[Anonymous]

I agree with the statement “failing to read the fine print is not an excuse”. I also agree that people who do not follow the rules, should be “punished”.  We have to take responsibility for our actions, no doubt about it.

On the other hand, if you have a medical emergency and you have to make a large charge on one of your cards to cover it. You know that this has to be paid back and if not, then you will pay. Let’s just for the sake of argument, say that you were paying your debt back as good as you could, meeting all the requirements of your contractual obligation and your card is reviewed. Upon review the CCC decides to cut your credit limit. In doing so, which they have the right to do, your utilization shoots through the roof. This causes other companies to look at you as a risk. They then start to lower your CLs to protect their interest. What would this do to ones credit? What type of interest rate would they receive if it were time for them to refinance a mortgage or something along those lines? It would be devastating and could possibly send someone into a dire situation. Does the CCC have the right to do this? Yes, they do. Should they have that right? IMHO NO. Should this in some way be regulated? I think is should be.

 I am in no way, saying that we should be irresponsible and dodge our obligations. What I am trying to say is that credit institutions have entirely too much power and that this should be changed.

[Creditaddict]

My problem is not the credit cards charging huge fees for starter cards and delinquent cards alike.

My problem is when you have a perfect customer for over a year and the credit card reacts to bad market in the country by changing there "credit criteria" for existing accounts and re-scoring you on the spot saying you are now a risk when you weren't a year ago.  We are now jacking your interest 10+% to prepare for you to default.

[FretlessMayhem]

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@Anonymous wrote:

I agree with the statement “failing to read the fine print is not an excuse”. I also agree that people who do not follow the rules, should be “punished”. We have to take responsibility for our actions, no doubt about it.

On the other hand, if you have a medical emergency and you have to make a large charge on one of your cards to cover it. You know that this has to be paid back and if not, then you will pay. Let’s just for the sake of argument, say that you were paying your debt back as good as you could, meeting all the requirements of your contractual obligation and your card is reviewed. Upon review the CCC decides to cut your credit limit. In doing so, which they have the right to do, your utilization shoots through the roof. This causes other companies to look at you as a risk. They then start to lower your CLs to protect their interest. What would this do to ones credit? What type of interest rate would they receive if it were time for them to refinance a mortgage or something along those lines? It would be devastating and could possibly send someone into a dire situation. Does the CCC have the right to do this? Yes, they do. Should they have that right? IMHO NO. Should this in some way be regulated? I think is should be.

I am in no way, saying that we should be irresponsible and dodge our obligations. What I am trying to say is that credit institutions have entirely too much power and that this should be changed.

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Yeah, therein lies a sticky situation. Like the poster who stated about the mortgage. That is also another sticky situation.

For the first, it seems that having all CCCs do away with universal default would pretty much help alleviate that concern. I find it quite odd that Capital One is leading the way on this.

I don't think there is any real "fair" way to solve this problem. If they end up passing that bill and getting it signed by the president, whoever it may be, I would expect somewhere in the foreseeable future to see AA across the board to compensate for it. I think it will probably make it harder for rebuilders. Maybe First Premier ends up shutting down since they will no longer be as profitable, and then rebuilders have even more trouble finding a CC to start with (secured aside for argument's sake).

If you then can say no to a rate jack, and pay off the balance under the old terms, the card would still be closed, I believe. So you're util would still shoot way up, paving the way for UD to kick in.

[Anonymous]

Now, I readily admit that I can be completely wrong on this, but wouldn't the CCCs have to conform their practices to the laws of the state the consumer lives in?

For example, I live in Virginia, the only state in the county that bans radar detectors. Now, when someone from North Carolina is driving through VA, they have to disable their radar detector for the duration of their stay. They don't get an exception because they are based in another state.

Wouldn't be conceptually the same with CCCs in states with stricter laws?

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Nope. Unless something gets changed at the federal level to make it that way.  That's why so many CCs are based in Delaware and South Dakota- they have to play by the rules of the state they're based in.  I guess that's one of the advantages of being a big corporation instead of an individual voter...

I can imagine, though, that it would be a nightmare for both consumers and companies if they tried to go by the laws in each different state.  I live in Virginia.  If I move to NC, do my CC terms change?  For that matter, if I do something that could be a breach in terms (say, make a big purchase that exceeds my credit line), would the penalty be different if the purchase were made in Maryland vs. Virginia- even if I still lived in Virginia?

It seems to me to be a big enough can of worms that it would be more effective to handle on the federal level...

-MsMS

[MidnightVoice]

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FretlessMayhem wrote:


For the first, it seems that having all CCCs do away with universal default would pretty much help alleviate that concern. I find it quite odd that Capital One is leading the way on this.

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They do away with universal default, but still reduce CLs due to lower credit score - seems somewhat similar to me!!