June 11,2009
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Brave New Credit Card World, Pt.2
Where can we find the good?Triple-long notification period: After the year, credit card issuers will be mandated to provide a 45-day advance notice before jumping your interest rates. Right now, it's still only 15 days.
Statement on time: When the new laws take effect, monthly statements will have to be mailed to you a minimum of 21 days before your credit card payment is due. To many, this seems moot. But to an empassionated few, it hits home. Thousands of unfortunates have received their statements in the mail after payment was due. They were shown no mercy by the unscrupulous few credit card issuers who have brought all this havoc on the rest of us.
Highest interest rate first: Again, the new laws will swat the nasty habit is socking it credit card holders who take the bate of using one of those ubiquitous mailers enticing us all to use them as normal checks. Once used, our fate is sealed with an exorbitant interest rate which we can't get to or pay down until we have paid off every dime of the lower interest first. Finally, the snare will become illegal and the predatory credit card issuer will have to apply your hard-earned payments against your highest first. Tough luck, sharkies.
Double-cycle billing: Double-time it outta here.
Minors must be accompanied by adult: Well, not really. But they will have to either prove they can handle it or else get a co-sign.
Simplified disclosure: Perhaps the most subtle but, also the most profound. Every body has a story. Almost invariably, the common element involves debt "sneaking up". If this one minor element could be resolved, the drop in uncontrolled debt would plummet. Paradoxically, credit card issuers would probably benefit, as well. They seem to stuck in this "punishment" mentality to control default loses and make money in the process. The big change now is that the liability has overtaken the premium. People can’t pay...ever. Secondary markets won't touch their securitization offers unless government pay's the risk premium.
The biggie here is that credit card consumers will be reminded each month that the debt they're paying on will take 1,000 years to pay at the current minimum rate they're paying. They need to pay way more then the minimum to ever escape the bank's gravity.