The Huffington Post does a nice job of explaining it;

SERVICE FEES

THEN: Banks could charge as much as they wanted. They could assess annual fees, activation fees and other fees. This was mostly a problem for subprime cards marketed to those with poor credit scores. One popular card, for example, the Premier Bankcard, charged $256 in first-year fees for a $250 credit line.

NOW: Service fees, such as activation and annual fees, will be capped at 25 percent of the credit limit during the first year of use. After that, there is no cap.

There is a lot more of this kinds of crap throughout the legislation. Seems like the CC industry will be doing just fine for a very long time.

UPDATE: On a similiar note, fellow SF Cartoonist John Daiker has entered a cartoon contest (his entry below) you can vote for him HERE.

11 Thoughts on “What do the new CC laws mean to you? (H/T- Helga)

  1. What do the new CC laws mean to me? Not a damn thing really. Just the personal satisfaction that guys like Miles Beacom and Dana Dykhouse will have to find new and more creative ways to fleece the public.

    Good link l3wis. All was good reading. I especially liked these parts.

    DISCLOSURES

    THEN: The fine print on cardholder agreements was often difficult to understand. Rates, fees and penalties for other services such as cash advances, for example, could be hard to find. The impact of the interest rate on paying down a balance was hard to compute.

    NOW: Cardholders will see how many months it will take to pay off a balance if only minimum payments are made. Statements will also indicate how much needs to be paid each month to pay off a balance within three years.

    STUDENTS

    THEN: Students arriving on college campuses often confronted a gantlet of credit card marketers handing out T-shirts, pizza and other gifts in exchange for filling out card applications. Credit cards were frequently handed out without checking the applicant’s income sources. In 2008, 84 percent of undergraduates had at least one credit card. Average balances topped $3,100.

    NOW: Credit cards may no longer be issued to anyone under age 21, unless the applicant has a co-signer, or can show independent means to repay the debt. Colleges must disclose any marketing deals they make with credit card companies. Banks are not allowed to hand out gifts on or near campuses or at college-related events.

  2. Costner on February 23, 2010 at 7:14 am said:

    What do the new CC laws mean to me? Not a damn thing really.

    I’d have to agree with this… I haven’t noticed any changes to my own accounts and from what I’ve read I don’t expect to.

    However, I do know several companies had to make significant changes to their pricing structure. The lasting effects may not be known for quite some time, but I would bet companies will just find loopholes or other ways to tack on new fees or higher rates. At the end of the day this is just some more “feel good” legislation which won’t really change anything.

    Maybe instead of being able to get a 21% APR credit card, now a person with below average credit won’t be able to qualify so they will run down to the local payday loan center where they will reap the rewards of a 400% yearly APR. That’s progress.

  3. Plaintiff Guy on February 23, 2010 at 3:59 pm said:

    I travel and must have CC for reservations. To escape funding the city with sales tax, I buy on the web with CC. Everyone should have at least 1 for these cases and emergencies. I’ll close some of mine and use just MC and Visa.

    New legislation will have a significant impact on SD economy. If people close accounts, there will be less call center employment. Team this with Obama health care (streamlined, less accounting, lower costs = fewer jobs) and SD could steep into recession.

  4. Ghost of Dude on February 23, 2010 at 4:06 pm said:

    1) I doubt the CC industry in SD will see too many layoffs from this new law. All it really requires is more information given to cardholders and more transparency. it also cracks down on practices that are really scammy. They’ll find any loopholes in the law and exploit them.

    2) I have the platinum card from SFFCU, and I’ll never have another CC in my life if I can help it. Great interest rate, no ridiculous fees, and I don’t have to call India to get customer service.

    3) If you really believe healthcare reform will pass through and be pooped out by congress in any form that actually streamlines anything then I have a really big bridge to sell you.

  5. I have the platinum card from SFFCU, and I’ll never have another CC in my life if I can help it. Great interest rate, no ridiculous fees, and I don’t have to call India to get customer service.

    We got our first cc back in ’84 when I was 35 years old. Only reason we got one was we heard we needed one to rent a vehicle when we were on a vacation. Before we always carried travelers checks. That one card is all we’ve ever had since. Upgraded it two years ago from the same bank where we have always done our banking at. Same as you dude. SFFCU and the platinum card. Good card. Anf if they ever start playing games with it, we’ll just get a debit card.

  6. I have one CC that I got after consolidating my CC debt about 4 years ago, almost paid off, haven’t charged anything on it, and it has a good rate. I use my debit card if I have to. I get CC offers in the mail EVERY SINGLE DAY. Sometimes 2 or 3 a day. Thank God for paper shreaders.

  7. Costner on February 24, 2010 at 8:25 am said:

    I hear you about those offers. I get something from AMEX and CapitalOne just about every week. I probably shred 4 or 5 CC apps a week.

    I do have two cards in my wallet, but the one is never used and I might as well just cancel it. The other one is used, but I always…and I do mean always…pay off the balance each and every month so I never pay interest. The rate is a good one, but it doesn’t really matter. The only reason I even use it is because I get a rebate on my purchases so it can add up throughout the year – but I typically only use it for larger ticket items or when I buy online.

    What I will never understand is why anyone would pay an annual fee to have a credit card. I’ve never paid an annual fee (or any other fee for that matter) and I never will. I’d rather go without, and frankly I end up using my debit card for most of my day to day purchases like gas or food anyway just because it is easier.

    Dave Ramsey probably has it right… avoid credit cards and just pay cash (or use a debit card) for everything and you will never get into trouble.

  8. I do mean always…pay off the balance each and every month so I never pay interest…

    Dave Ramsey probably has it right… avoid credit cards and just pay cash (or use a debit card) for everything and you will never get into trouble.

    Ditto.

  9. I would watch out for debit cards. They are not as safe as credit cards.
    This is one of the latest things to happen to affect people who use debit and credit cards. Has happened in CA also.
    http://www.sltrib.com/News/ci_14410150

  10. http://www.sltrib.com/News/ci_14410150

    Damnit Helga…I really didn’t need to read that. Guess if my SFFCU card goes tits up and starts playin games, I’m back to pre 1984 days.

    Thanx for the heads up.

  11. Costner on February 25, 2010 at 1:32 pm said:

    Skimming devices are commonly attached to ATMs because the theives can also install a camera to catch the PIN number being entered, but either way they work the same for credit cards or debit cards or ATM cards.

    There is no way to protect yourself 100% of the time and unless you refuse to use a credit or debit card and only get cash directly from the hands of a teller then you are at risk… even if that risk is extremely small.

    Then again, with cash there is risk of losing it or having it stolen – so a debit card is still probably exponentially safer to use for day to day purchases.

    I suppose banks could require fingerprint verification to use the card or some type of retinal scan… but then you would have people complaining aboug “big brother”. I don’t see how to ever be 100% safe when it comes to money. The crooks are always a step ahead.

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