Credit Card "Bill of Rights"

pvolcko wrote:'m not attributing to any of this a sense of honor, civic intent, or tough love benevolence on the part of credit card companies. I'm only saying that their greed serves the dual purpose of being the disincentive for being late, making only minimum payments, maintaining high balances, going over limits, etc. If people don't recognize these disincentives and go on merrily as if these companies lending them money are there as benevolent entities for their betterment through flat screen TVs, XBox games, and iPhone data plans, etc. then it's their own damned fault.

Sorry Paul but these CC companies are not hoping that you will pay on time & use your credit wisely.....They are hoping they can trick you into doing something that will allow them to retaliate with high fees & rates. Their motives for deception in hiding their actual fees & penalties amongst a blizzard of legal gobbledygook is not benign.....It is meant to deceive & the laws need to be tightened to protect us from their greed.


Edit: Watch just a few of the witnesses who's lives have been ruined by these CC companies in those linked hearings Paul. If you still feel the CC Companies are right...then there are no words in the English language that I can string together in any particular order that will change you mind.

Richard S. wrote:I'll tell you what the bastards did to me once, my payment got there late by like a day or two and they charged me $30 late fee... fine with me that's my own damn fault. They applied the payment to the late month and charged me $30 again the next damn month.

Okay, this must be what was referenced at that link as a "roll-over repeat" late charge. I'm not sure I'm understanding this, please bear with me.

Month 1: payment shows up late, $30 late fee assessed unknown to you.
Month 2: Bill shows up, you see the late fee from last month and since it is the next billing cycle there is a $30 late fee assessed again, but again this fee isn't known to you because it is only going to be noted on the next bill.
Month 3: You see the late fee from month 2, swear a few times upon figuring out what is going on, and end up paying the second late fee of $30.

Meaning what started as a $30 late charge in Month 1 ended up being a 3 cycle $60 set of fees?

Huh... sneaky bastards. Or were they super sneaky and nail you with another late fee for the late late late fee?

I would think that the second late fee, on the bill for month 2 would have been assessed and noted on that bill since it was for the then lateness of the late fee on the prior month's bill. Or am I not getting how this happens?

Devil505 wrote:Sorry Paul but these CC companies are not hoping that you will pay on time & use your credit wisely.....

Of course not. They are wanting to walk the chasm between people who pay their balances in full each month and those who go overboard and end up going bankrupt. They want to extend enough credit to enough people that are just responsible enough to pay their debts over time and irresponsible enough to accumulate and let sit those debts.

I'm not some Pollyanna here. I just do not buy into the notion that government should get too heavily involved.

Edit: Watch just a few of the witnesses who's lives have been ruined by these CC companies in those linked hearings Paul. If you still feel the CC Companies are right...then I have no words in the English language that I can string together in any order that will change you mind.

I will watch some, probably tomorrow or later tonight. I have a very faded view of the "sob story" victims that congress critters parade into such hearings, though. I don't deny their pain (well, not prejudicially anyway) and I can sympathize with their trouble. However, their pain and troubles aren't a national priority just because Chuck Schumer and his buddies says it is. And I do not trust at all their ability to find a reasonable balance between preventing such pain and unnecessarily or unfairly impeding the freedoms of the rest of the population and businesses.

pvolcko wrote:'m not some Pollyanna here. I just do not buy into the notion that government should get too heavily involved.

Maybe if the government got in involved in time to curb some of these excesses we wouldn't be on the verge of this nation's second Great Depression. Perhaps we taxpayers wouldn't be left "holding the bag" & paying for the greed that is bringing down our country & turning our democracy into a socialist state. I've said it before but if the government is going to force me to buy corporate bad debts....I don't want them......I want to own Exxon-Mobil........Let's nationalize the industry at the heart of corporate greed!!

Know what?....I'm going to go look for something involving COAL to talk about!

I don't know how the CC holders can stand to pay interest on fiat money that the banks create for free. Banking is not so hard to understand, and once you do understand it you will be repulsed.

pvolcko wrote:Meaning what started as a $30 late charge in Month 1 ended up being a 3 cycle $60 set of fees?

It's been a while but if I remember correctly the bill was due on let's say Oct 15. I forgot to pay it and remembered about a day or two later. I went online and transferred the entire balance due, the $30 late fee was not on my online statement yet or I would have paid that too and I wouldn't be having this conversation because I would have had a $0 balance.

What they did was retrocatively apply my online payment to the billing cycle I was late for BUT still charged me a late fee for $30. Now I have $30 charge on my CC that by all rights I should have however I was unaware the payment was applied to the previous month. I assumed the payment was applied to the next billing cycle and never made a payment the next month so I again get whacked with $30 late fee. So now I have grand total of $60 on my CC, all late fees.

In other words within a two month billing cycle I made one payment and got whacked for two late fees. If I had waited to make the payment instead of sending it a day or two after the due date then I'd be in the clear.... I argued with the guy on the phone for an hour and they wouldn't drop the second late fee. I'm like pick a month to apply the payment too, if it's the first month then I owe you nothing. If its the second month then I owe you the late fee for the first month.

How about 2 simple law changes for starters Paul:

1. CC Companies will be required to simply refuse to authorize a purchsae that exceeds a customer's credit limit. (no fees, no penalties...just refuse authorization in the first place)

2. The application of any fees or penalties to an account, will not be allowed to push a customer over his/her credit limit allowing for the application of an "over limit" charge.

pvolcko wrote:2) There is a "Ban retoractive rate increases" item, which is the idiotic idea I mentioned before of essentially turning a credit card into a monthly fixed interest loan for each month's purchases. This is bad for a lot of reasons which I'll go into if you want to delve into it, but suffice it to say I think there is a compromise that would be okay. Impose a prior notice clause on rate changes. If a change is desired by the company, they notify in the statement for the month that it will go into effect starting on the purchases made 1 month from that time. This allows time to either pay off the balance, get a loan to pay it off, or to transfer it to another card if desired. It will also prevent people from making a purchase in the time between the statement being printed and the statement being opened. This one month delay allows the card to retain it's adjustable rate nature while not surprising anyone with a new rate without time to adjust their spending behavior and/or make arrangements for the current balance.

There is no such prior notification in place Paul & the CC companies are fighting one. ( & why should I have to pay a higher rate on my prior balance if I have always paid on time. They should be required to keep with the original contract rates we signed. Higher future rates...with notification...fine. applying higher rates on the old balances....SCAM)

pvolcko wrote:4) Ban universal default in all its forms: I suppose they want to stop car insurance companies from raising rates on people for speeding tickets too. When a person defaults on another line of credit or even misses a payment, it is a sign that things might be going off the rails and it makes all the sense in the world for other credit lenders to assess the person's risk of defaulting on their credit as being higher and charge higher rates as a result.

If done before a CC is issued.......fine. Agreeing to a certain rate & then raising on a customer who pays on time is a scam.
(it would be like a car dealer calling you back a week after you bought & picked up your new car & telling you that the price had gone up & you now owe them $2,000 more, which they will tack onto your car loan)

pvolcko wrote:8) Ban pre-dispute binding mandatory arbitration: I hate that they usually precondition that any arbitration or court dispute has to be in a jurisdiction of their choosing (DE or CA). But, I'm against this item none the less. Such clauses are a cost saving measure that attempts to handle disputes without going to the expense of a trial. These clauses don't preclude trials from happening,

Yes they do preclude trials from happening,...or try to anyway!.....That's the entire purpose for their requiring arbitration.....To take away your rights to be heard in court. (it's really an intimidation attempt anyway. I have taken Chase to court on a bogus charge on my wife's charge, AFTER we deliberately failed to show up in front of THEIR guy at the arbitration. I let a real (impartial judge hear the case....& we won)

pvolcko wrote: I've recently read that some want to actually make it illegal for credit card companies to change the rate of interest on any outstanding balance. This is insanity. Credit cards are not fixed interest rate loan instruments. They are relatively high risk for credit card companies, so they rightly charge high interest rates with high penalties and make frequent adjustments to rates. Of course these new rates should apply to current balances. If someone wants a fixed interest rate they should negotiate a fixed interest line of credit with their bank or get a personal loan.

I don't think they should have the right to just charge what ever interest rate that they want too. I had a rate of 6.99% for the longest time and I always have a balance on it for one reason or another. One month I get my statement and the rate jumps from 6.99% to 21.99% for no good reason, credit rating didn't change, income didn't change, nothing changed. I went from paying $38 a month in interest to paying $138 a month in just interest all because they can. The sales rep said there was nothing that they could do about it and it was now their new rate, she said it was either a take it or leave it kind of thing. Of course not to many of us are ready to hand over a few thousand dollars to pay off our balances to avoid the interest charge, so we get screwed for doing business with them.

How many times did the interest rate get cut by the Treasury Department this year? Not once did the rate ever change on my credit card.

Devil505 wrote:How about 2 simple law changes for starters Paul:

1. CC Companies will be required to simply refuse to authorize a purchsae that exceeds a customer's credit limit. (no fees, no penalties...just refuse authorization in the first place)

2. The application of any fees or penalties to an account, will not be allowed to push a customer over his/her credit limit allowing for the application of an "over limit" charge.

I'm down with #1, but I'm against #2.

And I'm not convinced #1 isn't already being done. I've never had a purchase that would put me over limit at that time be allowed. If they didn't do this then no one would ever be denied a charge, which happens all the time (it is the stuff of embarrassing moments in romantic comedies and sitcoms!). Isn't this the case for all credit cards and companies? They deny new charges that would put you over the limit at the time of the purchase. It was my understanding that people go over limit (assuming no penalties or late charges) by both running a previous month unpaid balance that's accruing interest and making a new purchase that itself doesn't put the card over limit at the time, but at some point between the purchase and the end of the billing cycle the daily interest charges put the account over the limit. In this way it isn't the new purchase that causes the overlimit, but rather the daily accrued interest after the purchase that does it.

An example to clarify what I'm talking about:

If I had a $500 outstanding balance from last month, then go buy a $4400 item, putting me still under the $5000 credit limit of the card, and then wait until the billing cycle to end before making a payment, at which point the interest has put me over the limit... what the hell can anyone do to prevent this? This is an extreme example to demonstrate the mechanics of going over limit without ever making a purchase to cause it to go over limit, but all the other examples are just different in terms of the balance between prior balance vs new purchases. At which point should the government tell CC companies to prevent the new purchase that is still under limit?

I think what you are really wanting to be the new law for #1 is not to merely to prevent new purchases that would put one over limit at the time of the purchase (and I said, I believe this is already done), but rather deny new charges that when added to both the existing balance and the interest that will accrue on the prior balance through the end of the current billing period, would put the card over limit in the future before the end of the billing cycle.

Of course, that doesn't quite protect the credit card holder from himself enough because we have to consider that the billing cycle ends well before the payment for the cycle is due (usually 2-3 weeks). If we go with the above purchase denial rule, the card can still go over limit in the period between the bill being sent out and the bill being paid, making for an unexpected surprise on the next bill. So in fact, you want to make sure that no new charges are accepted that would put us over limit when combined with existing balance and interest that will accrue through the end of the current billing cycle and the time allowed for payment of the bill.

In either case, I'm against that level of protection and regulation. If it isn't already a regulation, fine, I'm down with making sure companies deny charges that, at the time of the purchase, will put the card over limit. I think this is already the case though, or at least a predominant practice within the industry.

pvolcko wrote:And I'm not convinced #1 isn't already being done. I've never had a purchase that would put me over limit at that time be allowed. If they didn't do this then no one would ever be denied a charge, which happens all the tim

I've had that happen to me too but with a ATM card. I usually pay for stuff up front as long as I can because it's cheaper. My previous hosting allowed for a yearly payment and to set it on automatic billing. The account came due and I didn't have sufficient funds in the account but they charged it anyway giving me negative balance. Yet another $30, my fault and no argument from me but I have to agree with devil. If the charge is going to result in an immediate penalty it shouldn't be allowed to be processed.

Devil505 wrote:There is no such prior notification in place Paul & the CC companies are fighting one. ( & why should I have to pay a higher rate on my prior balance if I have always paid on time. They should be required to keep with the original contract rates we signed. Higher future rates...with notification...fine. applying higher rates on the old balances....SCAM)

You may have noticed that this was under the "what I think should be done" heading and I used the word "Impose" in regard to this item. Of course it doesn't exist now. I was trying to meet the plan at the link half way on this point. Apparently you are not interested in compromise though. Instead you want to change the fundamental nature of a credit card from being that of an adjustable rate credit line to an adjustable fixed rate credit line. I am not in favor of imposing such a fundamental change on credit cards of the kind of credit they offer. If you want such a thing, start a credit card company with those terms or pitch the idea to people who want to go into such a business with you. According to the video series SAU posted banks and credit card companies just create money out of nothing anyway, so you shouldn't need anything to get going.

If done before a CC is issued.......fine. Agreeing to a certain rate & then raising on a customer who pays on time is a scam.
(it would be like a car dealer calling you back a week after you bought & picked up your new car & telling you that the price had gone up & you now owe them $2,000 more, which they will tack onto your car loan)

Ummm... have you heard of an adjustable rate loan? That is precisely what millions of car loans in this country do, change rates from time to time, affecting how much interest you have to pay back. Credit cards are at their core an adjustable rate credit instrument. You sign on for this when you get one. It is an understood thing. It is not hidden in any way. It most certainly is not indicative of a "scam". At least not by any definition I know.

Yes they do preclude trials from happening,...or try to anyway!.....That's the entire purpose for their requiring arbitration.....To take away your rights to be heard in court. (it's really an intimidation attempt anyway. I have taken Chase to court on a bogus charge on my wife's charge, AFTER we deliberately failed to show up in front of THEIR guy at the arbitration. I let a real (impartial judge hear the case....& we won)

So, your own personal experience proves my point. Thanks.

Richard S. wrote:I've had that happen to me too but with a ATM card. I usually pay for stuff up front as long as I can because it's cheaper. My previous hosting allowed for a yearly payment and to set it on automatic billing. The account came due and I didn't have sufficient funds in the account but they charged it anyway giving me negative balance. Yet another $30, my fault and no argument from me but I have to agree with devil. If the charge is going to result in an immediate penalty it shouldn't be allowed to be processed.

I agreed that if it isn't already the case that it is a reasonable regulatory change, but only for charges that would immediately put the card over limit. As I said, I'm pretty sure it is either already the case this is done or it is a predominant industry practice. If the later, I'm still fine with making it a law/regulation. I just don't want to go down the road I think is really being talked about on that item, preventing charges that would put it over limit at some point in the future in the billing cycle, or worse at a point before payment is due for the cycle.

Adamiscold wrote:I don't think they should have the right to just charge what ever interest rate that they want too. I had a rate of 6.99% for the longest time and I always have a balance on it for one reason or another. One month I get my statement and the rate jumps from 6.99% to 21.99% for no good reason, credit rating didn't change, income didn't change, nothing changed. I went from paying $38 a month in interest to paying $138 a month in just interest all because they can. The sales rep said there was nothing that they could do about it and it was now their new rate, she said it was either a take it or leave it kind of thing. Of course not to many of us are ready to hand over a few thousand dollars to pay off our balances to avoid the interest charge, so we get screwed for doing business with them.

I think they do have the right to change it whenever they want without notice and personally have no issue with the practice, particularly given that it is fully disclosed in applications and agreements that this is the case. However, I do agree it can be a pain to deal with and can catch people off guard since such changes aren't known until after its gone into effect and resulted in unexpected interest charges. So I support a new notice period for such changes such that the new rate goes into effect in the billing cycle after notice is given in the monthly statement/bill. Notice should also apply to penalty and fee changes and any other changes in terms of service too (privacy policy changes, etc.). Seems a fair way to handle it to me.

pvolcko wrote:Apparently you are not interested in compromise though. Instead you want to change the fundamental nature of a credit card from being that of an adjustable rate credit line to an adjustable fixed rate credit line.

No Paul.....Please don't tell me what I'm saying...because you are wrong. You are right though when you say ..."you are not interested in compromise"......I am not!

What I want is for the CC Companies to write a contract simple enough to be read & understood by the average person, not require a Supreme Court Justice to interpret, & then for them to live up to their end of the contract!

(If I agree to pay 9.99% APR on purchases & I make all my payments to them on time, I expect the rate to stay at 9.99%.....PERIOD!!)
If they want to raise their APR on any future purchases I make, & they notify me of that intention in time for me to accept or decline, absolutely fine. (again...car analogy.....cars always go up in price each year...I have no problem with that)
BUT

they should not be able to change the APR on my old purchases, bought under the original contractual APR.
(car analogy: A dealer notifying you that they are tacking on another $2,000.00 to your car loan for an after sale price adjustment!....Would you pay that additional $2,000 Paul?))