June 12,2009
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Brave New Credit Card World, Pt.3
Where can we find the bad?The Interrum: Forty years in the wilderness. Well, actually only one, but it may seem like 40. We've stirred the sleeping giant before securing protection. All through the revisional hearings, the credit card industry has constantly forewarned of the dire consequences awaiting credit card consumers if Senator Dodd's bill becomes law. Now it's law but will have no bite for a year and provides no protection for a year. We're already feeling the repercussions. Rates are jumping through the roof and credit card limits have been reduced to being a bad joke ($500 instead of the usual $3,000).
Introductory rates: If you're one of the lucky few with an introductory low-interest credit card (as I am), you should be safe for awhile. Unless things get even worse, your deal should stay in place. Just don't mess up. Things could change quickly for you.
If you don't already have one of those %0 credit card intros you're out of luck, I'm afraid. Don't expect them for a while. Not until the credit card industry finally becomes desperate for new customers will they again offer all those nice perks most of us have enjoyed for all these years. The scare is that, once a good offer is made, it won't be easily rescindable any longer and that increases risk for the credit card issuer. They claim they're already losing $10 billion per annum in the year to come. In the meantime they need to pinch every penny. The net effect is to show 'those guys on Capital Hill' they have hurt the nation's economy worse with their meddling. In truth, it appears that a little balanced joint cooperation would have been a better remedy (as it usually is).
Balance transfers: These appear to be the hardest hit. Now, their placed in the same category as cash advances (27% , not including the %4 transfer fee at with HSBC). Cash advances, of course, carry the greatest to the credit card lender and the greatest benefit to the borrower. Ready-cash is, by far, the ultimate value to a borrower and should be charged at the highest rate. How can balance transfers possibly equal that value? Go figure.