December 08, 2009
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News: 'POP!' Goes the CC Score Myth
Haven't written one of these type articles in awhile and credit card behavior has undergone some radical changes in the past year. Moreover, the speed of this evolutionary transformation is accelerating exponentially quicker as the day of reckoning approaches. Beginning on February 13, 2010, the age-old protection mandates will start being enforced. I call them age-old because they'll be a year old by then and only going into effect a year later. The year was deemed necessary at the time because the credit card issuers cried loudly that it would take that long for them to revise their credit card processing structure.
Indeed, they did go right to work on it, however. Credit card APRs began to soar, almost immediately. Credit limits were slashed to the bone for credit card holders who had always been in perfect standing. New fees for every occasion started popping up like mushrooms after a rainy day. Things got so extreme that Congress had to step in once again. Only two or three months ago, congress was poised to move the effective date up to this month. So important, it was, that it quickly reached the point of a final vote.
Pundents howled and bankers whined (and dined lawmakers). Bribes (by any other name) carried the day. The credit card lenders promised to behave themselves, pointing to the "well-known fact" that big business will always govern itself fairly and the government only exists to make war. Stay out of regulating business. So right now, I'm typically receiving about 4 notices every week reminding me of all the great deals my banks will be giving me after February 13 (when they really have no choice). It's interesting to note the subtle way these "good deals" introduce the news that the damage has already been done and my APR has already been raised to the hilt. Blame it on the Prime, right?
This series is not intended to bash the banks, understand. After all, they have to make a living too. (Be advised, however, that "making a living" to a corporation is defined as "squeezing every dime possible from the client base as due diligence to the shareholders". Credit card scores will remain in disarray until the dust settles this summer. Please proceed to article series entitled "'POP!' Goes the CC Score Myth, Pt.1" to be apprised of "effective" rules governing credit card ratings until that time.