December 8, 2008
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News: Santa Levels Credit-card Playing Field.
Well, maybe not directly but still… Government regulators are taking advantage of a rare situation where they have the serious attention of the credit card industry. With that opportunity, they have decided that now is the time to straighten some things out. Within the next several weeks, federal regulators will start unveiling some new rules that will restrict some of the practices which they deem as unfair or deceptive to credit-card holders. Some of the areas being addressed are:
1) Rate jumps on debt that already exists and was created at a lower interest level. There may be a few exceptions.
2) Applying over-and-above payments in ways to cost the consumer the most in interest charges. The reasoning is, when consumers pay ahead, they should get greater benefit.
3) Allowing a ‘reasonable grace' period to allow consumers who are a little late in payments from going into delinquency too quickly.
All these long-awaited changes were not just the result of foresight. For a long time now, consumers have been complaining to the Federal Reserve's Web site in great numbers about these problems and with strong language. They want something done about the predatory practices of the credit card lenders and the aggressive new techniques being used to drum up new business by them. Most of these requests are not in favor of more lax credit card standards nor to seek greater protection for the guilty. They're in the vein of treating honest people like honest people and the credit card issuers not taking advantage of them just because they can.
Of course, those in the credit card industry has issues concerning these new regulations. The industry is not plying for license to mistreat consumers in their plea. But some of the measures, they say, have not been well thought out. The industry players warn of possible ‘extreme and unintended consequences' if some issues are not resolved.