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New Credit Card Act May Help Protect Assets

November 11, 2009 by  

New credit card act may help protect assets In order to protect consumers from unfair market practices, U.S. lawmakers have decided to move forward the date on which the credit card reforms will become effective.

Media reports in recent months have suggested credit card companies have been hiking interest rates and fees in anticipation of the reforms that were set to take effect in February and August 2010 and bar them from similar practices.

The 331-92 House vote on the Expedited CARD Reform for Consumers Act—sponsored by two Democratic Representatives Carolyn Maloney of New York and Barney Frank of Massachusetts—has moved the effective date to Dec. 1, 2009.

In response to the vote, Representative Maloney said the companies "brought this on themselves" and the ban will crack down on actions that "have kept far too many consumers trapped in a never-ending cycle of debt."

News reports states that among the provisions that will become effective earlier than planned are a prohibition on arbitrary interest rate increases and universal default on existing balances and a ban on interest charges on debt paid on time. Moreover, issuers will be required to set penalties in such as way as to be reasonable and proportional to the omission or violation.
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  • s c

    The idea that ‘FAR TOO MANY consumers have been on a never-ending cycle of debt’ is an admission that it’s OK for ‘some’ to have that problem. To translate elected officialese into English, they’re trolling for easy votes so they can keep their sorry rumps in Washington longer. We need new faces more than we need the current crop of ‘experts.’ And, some major credit card companies should be OUT OF BUSINESS.
    When something becomes ‘convenient’ for a politician, it’s already a serious problem [e. g., a certain Massachusetts senator and ILLEGAL IMMIGRATION]. We DON’T need more political ‘saviors’ in DC.
    Somehow, they’ll find ways to screw it up, so a few years from now, some other political ‘savior’ will step and try to ‘solve’ a problem that other ‘saviors’ made worse – and did it in the name of making it ‘better.’ ‘Saviors,’ you’ve already screwed-up the rest of the economy. America doesn’t need you. Probably, we never did.

  • Disgusted

    It’s about time. Why they had this set to take place in 2010 is beyond me! It should have taken effect immediately. The card companies are having a field day raising rates on cards that haven’t even had a late payment. Our Chase card was set up with auto payment and we were never late, but that didn’t stop them from hiking our interest rate up to 29%. When we called to find out why they actually said “because we can”, they wouldn’t do anything for us. Thank god we live in Wisconsin and can take advantage of the old chapter 128, this is not bankruptcy – but debt relief. It stops any interest, penalties, fees. I still pay off the principal and can’t use the card anymore, but, not a scratch or dent on my credit report! These card companies are out of control!!

  • Lawrence Ekdahl

    So the goverment is going to protect us from the problems which they themselves created with the credit card companies & bankers. If you believe that I have a bridge I would like to sell you. What we really nead is for goverment to keep out of the economy and let “free” enterprise take its natural course. Of course they should step in and punish the cheats. That is their proper role.

  • Peg

    Is there anyway everyone can get together with a petition to Congress that the rates need to go back to what thye were at the time the money was borrowed? EVERYONE is upset and Congress is not doing a thing about it. 2010 is a long time away to stay under the rule of these crooks!!!What willthey do to us next?

    • Disgusted

      The article said they moved the effective date up to December 1, 2009. Unfortunately, the delay so far has given them time to wreak havoc on everyone already. What they should do is make them put the interest rate back to what it was when they purchase was made and refund all the interest they have charged since they raised the rate on that purchase. Credit Card companies are running amok and December 1 can’t come soon enough!!

      • Jana

        We pay our credit card off monthly as we aim to stay out of debt. We put everything we need for the month on the credit card, but not more than we can afford to pay at the end of the month. One month I misread the amount due by $1.00 That one dollar mistake cost me $35.00. Boy do I double check and triple check now. My first and only mistake on my credit card bill in over 10 years.
        They kept upping our credit line till it hit $50,000. We called and had it lowered back to a normal amt. We didn’t like them raising the amount like that. That is just inviting trouble if someone stole the card number or we lost a card.
        I think they were hoping we would make additional purchases and then we would be charged interest.

  • http://www.ProudlyMadeInAmerica.com Joe

    I am not sure what the root cause is, but I agree with the post about credit cards at http://proudlymadeinamerica.com/?p=44 in that the credit card has morphed into something other then it was originally. I can remember my parents would pay for most things in cash, and use the credit card for the big purchases they planned to pay off over a few months. I know that I can not do that with my cards today. The interest rate and fees prevent me from buying something over a few months.
    I once was tricked into getting a store card to buy a T.V. with “no” interest payments for 6 months. Well, I didn’t read the details so I got clobbered. Never again.

    • s c

      Joe, while I am not a scholar who specializes in senatorial antics, the odds are very high that most problems dealing with credit cards can be traced back directly to the Senate Banking Committee.
      Find out who’s sleeping with whom (and how long), and you may get an education. When you get all the details, let the rest of us know. I’ll bet the same ones who are responsible for our credit card and banking disasters are the same people who consider themselves above the law.
      And, I’m willing to bet that you’ll see why it’s so important that Americans always DENY all politicians any consecutive terms.

  • Ashley

    After giving sufficient time for the financial institutions to make changes to their contracts and agreements, the government now decides it can move up the effective date of the new law. After all the contracts have already been redone, just what good is moving up the effective date of the law going to do? This type of law or regulations needs to be effective immediately upon passage to do any good for the consumers.

  • Claire

    I have to share this with all of you. Since I have show dogs, I have a credit card exclusively for them should anything god-awful happens to one of them and I have to take them to the Emergency Clinic in the middle of the night or to the U of I. small animal clinic. Believe me, the fees are horrendous if you take any dog to Emergency or to the U of I. The card is called “Care Credit” and it is through GE Money Bank. At this time, (thank God) I do not have an outstanding balance. I received notification from them in the mail today and they have upped the interest rate to 26.99% effective immediately. The old rate was 8.99% and to be on the safe side, I NEEDED something for my dogs just in case. So, apparently the 12-1-09 date will not help me at all. But I am sure going to call them on Monday. I also have a Citibank Visa and I received notification from them yesterday and they have also upped the interest to 26.99% Their effective date is 12-5-09. Right now I have about $400 on this credit card. I am wondering if the date of 12-1-09 will be of any use. Different banks, but same amount of increase for interest. Apparently the banks are going to screw us one way or another. Like that old song: “One Way or another, I’m gonna gitcha, gitcha, one way of another.” Wish me luck since I will call them on Monday. It will be interesting to see if this happens to any of you on this post. Beware, it seems everything is backfiring.

  • Claire

    Also, in regards to my earlier post, both card upped the limit for charges. Citibank upped theirs to $25,000.00 and Care Credit upped theirs to $ 15,000.00. This is almost like entrapment especially for people that do not use their cards wisely.

    • DaveH

      Our credit card rates are sky-high because somebody has to pay for the deadbeats. Read this article please for a better understanding of the mess Government makes with their regulations:
      http://reason.org/blog/show/new-wall-street-regulations-wi

      • Joe H.

        DaveH,
        finally someone with common sense!! People are in the habit of spending more than they earn!!! Carry balances on plastic, buy that new car on credit, on and on!!! I make sure all my cards are over paid by five dollars each month!! I have never paid one cent of interest on any of the three we have!!! Never will! If every one did this and didn’t request a card until they could afford to, we wouldn’t be in this pickle!!!

  • Claire

    DaveH: Thanks for the article you provided in your post. I understood the post, but it appears that these banks are increasing their interest rates for almost everybody. I have talked to numerous friends, and some of my neighbors. Most of them are having the same issue. It really aggravates me because (like you said) the people with good credit have to pay for the deadbeats. I have a really good credit rating on both of these cards and I am not going to let this drop. I will call them tomorrow and see what happens. I am going to emphatically protest, and if the results are not to my liking, I will contact the Attorney General’s office here in my state, and will go further if necessary.

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