Credit Card Reform Act Lunacy (more nonsensical governmental meddling)

Discussion in 'The Fire For Effect and Totally Politically Incorr' started by ponycar17, Mar 7, 2010.

  1. ponycar17

    ponycar17 Active Member

    Feb 17, 2005
    South Carolina
    My wife started telling me about some of the potential changes that could be coming from major credit card providers since she works in the financial industry. She was mentioning the fact that the credit card companies are taking a major hit in revenue since they can no longer charge multiple overdraft fees per laps in user judgement/responsibility, and that some card companies are going back to annual fees. Here's an article I found.

    Emphasis added by me...


    Did you catch that one action? If you're successfully paying off your balances and being a responsible consumer one bank has now decided that you must be assessed a $19 fee. I am under the impression that this will mean that if you have a $0 balance you will be assessed a $19 fee for inactivity because it costs money to maintain the account. Forget to pay that $19 because you don't have a balance and watch the interest and fees start mounting even if you're not using the card. This will catch most consumers off guard, and is the most glaring problem the good old feds just created. Gone are the days of having an account that you don't use just for security; it'll cost you now. :rolleyes:

    The White House suggests that the card-issuing industry makes $15B annually on penalty fees. You know, the fees accrued by those who have either had a lapse in judgment or behave totally financially irresponsible. This act did nothing to punish the banks, since the financial industry always reacts to maintain their profits. Look at what banks did with the sub-prime mortgage market. They were told, "Look, you need to loan to people who can't afford the mortgages they're issued." In response, the banks created the mortgage-derived securities market that protected lending profits in the short term but later ravaged the world economy in 2008 when the market collapsed. Government intervention that tries to usurp basic economic principles ALWAYS produces results which are WORSE than the previous state.

    So, what does this all mean for the banks' revenue? Very little in the long run... Why? All of the responsible consumers will be paying for the mistakes of those who couldn't manage their accounts responsibly. Let's score another win for the good ol' US Government and their economically inept reaction to non-problems... :mad:

    Just thought you should know.... :mad:
  2. ponycar17

    ponycar17 Active Member

    Feb 17, 2005
    South Carolina
    Basically, if you carry a card that you don't use (or do use) review your statements and terms of use carefully. You could end up in trouble and this really won't be your fault. Blame it on those who couldn't manage their finances for calling in the Superheroes of 'Ekuhnawmics' from DC. :rolleyes:

  3. pinecone70

    pinecone70 Active Member

    Jul 30, 2008
    Minnesota Gal!
    Fantastic, more dumbing down. Now they start punishing me for being a responsible card carrier for twenty plus years? One time I missed paying the monthly balance in full, ever. I think I'll cut them up, maybe find one that is the least painful and keep it. After all, credit cards are required for some things.....Bah.
  4. dbrodin

    dbrodin New Member

    Apr 15, 2009
    Duluth MN
    Non-use of a credit card shows as a negative factor on your credit score. Same with paying the balance in full every month. This is considered bad behavior because they don't make any money off you.
  5. ponycar17

    ponycar17 Active Member

    Feb 17, 2005
    South Carolina
    dbrodin, that's partially true. What the FICO score takes into consideration is your total available credit compared to what you owe, along with how responsible you are with making payments. If you have a mortgage and a car payment but two open credit cards with zero balances that isn't going to hurt your score. Now, closing one of those two cards WILL hurt your score as your percentage utilization of open credit lines will increase. In other words, your available credit will have suddenly decreased but your total amount owed will remain the same. So, it used to be that if you could keep an unused card open it made sense to do so because closing it would hurt your credit. Now, with the reemergence of annual fees it may make more sense to bite the FICO bullet and close the card. If someone has no other debt and they close their credit cards, then their FICO score will go to the crapper. Now, that's not a totally bad thing either if you don't need access to credit. :)
  6. pinecone70

    pinecone70 Active Member

    Jul 30, 2008
    Minnesota Gal!
    I'm sure I have wrecked everything for myself by having no loans or debt. It's not the American Dream.

    I was taught that a credit card is essentially a one month loan.
  7. todd51

    todd51 Well-Known Member Supporting Member

    Mar 20, 2009
    Central, Ohio
    Do any of you know what the facts are on charges to vendors where I have made a purchase using my card. I was under the impression that the vendor (Home Depot, Kroger's, Walmart, etc.) had to pay the card issuer (Visa, Master Card, Discover, etc) a percentage fee (2%-3%) on the amount of the purchase I made. Therefore giving a profit to the card issuer even though I paid the account in full each month. When I have given a vendor the option of payment especially small independent vendors have always chosen a personal check over a credit card method of payment saying to me it cost them if I used the card. I was under the impression that this is why so many of the large vendors want to issue you their card rather than have you use one of the universal cards. Is any of this close to the truth?
  8. Bobitis

    Bobitis Guest

    At least we can carry in parks now.:rolleyes:

    I too have one card only. I got a card from Sears about a month ago. In the mail!:mad: All ready to go. I haven't bought anything from them in 20+ years.
    My son gets more card offers than I do, and he doesn't even work.

    My credit score is 760+, but I can't get a loan for him to go to school.
    The fed has several programs available, but for some reason I don't qualify as a co-signer.:confused: It must be that 'risk' factor.:rolleyes:

    No risk, no loan.

    And Todd, you are correct. Every time we process a card where I work, we get dinged for it.
    It's the lenders way of saying thanks.
    Last edited by a moderator: Mar 7, 2010
  9. Gee, now I'm really glad I never got a credit card, and at this rate, I'll never get one. Thanks a bunch, Barry:rolleyes:
  10. armedandsafe

    armedandsafe Guest

    The only time I've been involved with a credit card was the one the CC company sent to my (ex) wife, to an address of her co-worker. Co-worker suddenly had bunches of money to blow. Took awhile and a plane trip to Anchorage to get that one straightened out.

    I have no idea what my credit score is, as they won't send me my federally mandated free report. Something about never having had any credit. hmmmmmm

  11. Gun Geezer

    Gun Geezer Well-Known Member

    Oct 5, 2009
    Central Florida
    A banker type told me once that the only reason credit card companies retain those who pay the monthly balance in full is the hope that just once the card holder will over-spend and not be able to pay the balance, then they got you. Even though they lose money on the card holder who pays the monthly balance, they make it up on the 3 or 4 per-cent they charge the business for accepting the card. Even when they lose they win.
  12. pinecone70

    pinecone70 Active Member

    Jul 30, 2008
    Minnesota Gal!
    I bet the vast majority of Americans carry a balance on all their credit cards, especially now.
  13. ponycar17

    ponycar17 Active Member

    Feb 17, 2005
    South Carolina
    Keep in mind too that this isn't only about credit cards.

    Debit cards are also affected by this legislation. Do you enjoy a free debit card now? I have for many years. Debit cards used to require a monthly fee for their use. That too will likely return as banks (and credit unions) are only allowed to charge a one-time overdraft fee if someone goes on a spending binge and purchases 5 items over their limit. Some people don't care how much is available in their account - they'll work that out later. That's a tremendous loss in income to the financial institutions and THEY WILL recoup the losses. It's only a question of how quickly the reactions will be implemented.

    Since banks and credit unions are hurt by decreasing revenue that will lower interest paid on investment products, raise maintenance fees for check copies, talking to a live teller, online banking, interest on mortgage and auto loan products and the list goes on... Again, responsible patrons will pay the price.

    Thanks to all the financially-inept people in DC who have given us this gift. :rolleyes:
    Last edited: Mar 7, 2010
  14. ponycar17

    ponycar17 Active Member

    Feb 17, 2005
    South Carolina
    And yes, the right to carry in national parks is the only thing I see positive about this bill. It really scares me though, that Obama (and anti-gun zealot) would sign a bill concerning credit card reform with a pro-gun rider attached. What is there about this 'reform' bill that's going to be so important that it was worth allowing pro-gun legislation to pass through? :confused: The real reaming may be on the horizon. :eek:
  15. ponycar17

    ponycar17 Active Member

    Feb 17, 2005
    South Carolina
    So I had to revisit this topic. I said that financial institutions WOULD make up for their losses because of this bill. Here's the most obvious example to emerge...

    Bank of America $5 Debit Fee Protest Gains Steam

    And these people protesting?... That's just crazy. Let them take matters into their own hands and leave BOA. It's stupid to protest it.
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