Banks have declared war -- on you: Fasten your seat belts, credit card holders

[Better Believe It]

Banks have declared war -- on you
Changes are coming fast to the credit card world, and you can expect your bank to raise rates, slash credit limits, add fees and cut rewards. Consumers, brace yourselves
By Liz Pulliam Weston
MSN Money
June 9, 2009

Fasten your seat belts, credit card holders. It's going to be a bumpy few months.

When President Barack Obama signed credit card reforms into law recently, bankers shook their fists and warned us we'd be sorry. Though some of their threats are so much hot air, the new legislation will force some dramatic and often unwelcome changes.

Who's most at risk? Anyone who carries credit card debt, and that includes those of you with great FICO credit scores.

Who's least at risk? Big spenders with good credit scores who don't carry balances.

"Brace yourselves. For the next nine months, until this law takes effect, issuers will do more of the same: raising interest rates, pushing through new and higher fees, and continuing to scale back credit limits," said Greg McBride, a senior financial analyst at Bankrate.com. "Everybody, including those with very good credit, will have to get accustomed to lower credit limits, higher rates and higher fees as a result."

http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/banks-have-declared-war-on-you.aspx?gt1=33001

[DJ13]

1. This is what happens when the cowardly Congress doesnt impose a new law

immediately.

Giving those criminals 9 months of unrestricted gouging before that watered down Fed inspired law takes effect was just stupid.

[MadHound]

2. I keep telling people, and some are listening. Cut up your cards and go to a cash/check/debit system

Your budget, your life will be better because of it.

[billyoc]

3. As a preemptive strike, I'm not paying any of them off.

Come and get me, motherfuckers.

[Better Believe It]

8. It was a credit card law change the banks could believe in ....

and no caps on interest rates!

Any more reforms along those lines and we are f*cked!

Wait until you see the social security and Medicare "entitlement reforms" coming down the road.

[leftyladyfrommo]

11. Atta Boy! You go get em! n/t

[LisaM]

4. I just got turned down for a Discover card for absolutely no reason

My current credit card is normally completely paid up. It's not right now, because we had some emergency vet bills, but I've stilled paid well over the balance (one $1000 payment, one $500 payment) far in advance of the deadlines. I filled out Discover's pre-approved form and still got turned down. I don't need another card, but I thought I would use it for airline miles. It bugged me (especially their condescending advice on getting a credit card and paying it on time, which I do!) And I've only carried this (unusual for me) balance for about six weeks.

[katmondoo]

9. LisaM I got turned down too

I have very good credit and only owe about $200.00 on credit card. They sent me the application and I applied knowing I would be refused for age, in my opinion not for credit. I am writing to them to thank them for refusing me, I wasn't going to use it anyway, just wanted to see what they would do.

[Hannah Bell]

16. i'm thinking we're going to see a bigger proportion of the population

unable to access *any* kind of credit in the years to come.
i think they're going to a different profit model; a smaller, more "select" group of customers; higher fees, fewer defaults.

but the lack of access will have repercussions at the bottom: in home ownership, college attendance costs/rates, etc.

[roamer65]

26. The different model you mention is how it used to be with credit cards.

Very select.

[Hannah Bell]

32. yes, i know. & what troubles me is that it suggests a racheting-back

to that economic structure; when, for example, you had to save most of the principle before you could buy a house - which meant a lot of people didn't own one.

there are some negative things about easy credit, but there are some bad things about tight credit too.

[Gormy Cuss]

36. The home ownership access can be addressed through HUD programs

and state-run first time buyer programs. There was a fair amount of that in place before the housing market frenzy fueled by securitized loans changed the landscape.

IMHO The lack of access to credit cards will hurt more people immediately because they may be forced to choose more expensive ways to finance short term debt.

[MADem]

5. Maybe more people will eschew them entirely. I think the people with the best

"credit scores" should be people who pay their bills, not those who carry a lot of plastic. But that's just me!!

[LisaM]

20. I normally didn't use my card at all - just for dinner once in a while

to keep a credit history established, but I'd pay the bill immediately. As I said, we had emergency vet bills come up. I paid about $4000 in cash, but with the CT scans, surgery, follow up appointments, etc., my total was around $6000. Instead of dipping into savings, I decided for cash flow purposes to spread the remaining $2000 or so out over the next two months. I've paid most of the balance off. I just thought I'd prefer to leave my savings untouched, knowing I could cover the credit card balance if necessary.

The good news is, the dog is doing very well - his operation was a success, and he is going through chemo (it was thyroid cancer, caught early, thank God) as a precaution only. So it was worth spending the money.

[MADem]

30. Yay for the dog! Boo for the vet.

I realize vets aren't charities, but you'd think they could take monthly payments with a fee. Particularly with reguar, ordinary, bill paying customers.

I just lost a dog. I am still bummed out. Debating the whole "get a new one" thing. The little dog left behind is bummed.


Of course, it's easier to travel with a dog, cat and bird than TWO dogs, a cat and a bird....


Torn. What a situation.

Beside the point, though, eh? You'd think vets would be a bit more accomodating to "regulars," I am thinking. They sure are in UK.

[LisaM]

35. It wasn't our regular vet, and I think they do take payments.

I'm very pleased with the results. Now our OTHER, younger dog, is having back pain, and yelps when she jumps up. It's horrible, because she is an active, jumpy dog. The cancer dog is lively and seems in perfect health. Go figure. We took the non-cancer dog to the vet and he gave her arthritis medicine, but so far it hasn't helped much. I'm hoping it's just a strained ligament. They did rule our neurological damage, thank God.

I'd recommend getting another dog. They love the company. We've twice had a single dog when the older one passed away, and got new dogs, that quickly became inseparable with the older one. In fact, I'm wondering if the stress of Gordie's cancer contributed in some way to Bonnie's back pain.

[kirby]

6. What is wrong with this?

Don't most people agree that credit card debt has been 'too available?' in this country? We were in a bubble, things need to shrink.

This is a very healthy sign.

[Wednesdays]

23. Not a very healthy sign for those holding balances. nt

[wtbymark]

7. Haven't had a card since 03'

and never will I have one again.

[DontTreadOnMe]

10. I have two credit cards... with zero balance.

I have them in case I have to rent a a car or check into a hotel....

I make ALL my purchases on my debit card. Can't spend over your limit with a debit card.

And no interest penalty at the end of the month.

Americans need to stop using credit cards.

[Better Believe It]

13. I and my spouse have two credit cards which are paid off every month

They are for motel, car, grocery and other general living expenses.

As long as we don't owe anything and pay off the credit cards right away we're OK.

[Hannah Bell]

12. "Big spenders with good credit scores who don't carry balances."

i.e. rich people. big surprise.

to those saying "cut up your cards," i think it's not wise to completely cut off your access to credit.

i'm thinking you may find it increasingly hard to regain access once you give it up.
by design.

[Hugabear]

14. This is exactly why we need to nationalize the banking industry

We give them BILLIONS, and what do they do? They take the money, and say "Thank you very much, now fuck off." This is precisely why we need to nationalize the ENTIRE banking industry. We need to wrest control away from the corporate fatcats whose only concern is fattening the wallets of themselves and their shareholders. They do not give a flying fuck about any of us - they want our money, but absolutely do not want to have to provide us with anything in return.

[DebbieCDC]

15. I put all my cards in a debt management program

ALL issuers HAD to lower my payments AND interest rates -- some as low as 7.99% and they are locked in until my cards are paid in full. I don't even have to send them any checks. The Consumer Credit Counseling group I'm working through automatically withdraws enough from my checking account on the same day each month and THEY pay the cc companies. I love it. :evilgrin:

[ananda]

17. Congress .. not cowardly. C O R R U P T ..

.. compromised.. owned.

[customerserviceguy]

18. Thanks for posting this

it reminded me to download my Bank of America statement. I just finally started paying interest on the account, had a $2.5 K loan from them for a year with zero interest, and this recent statement was the one that they showed that interest.

Good news, they didn't jack it up from the 11.75% rate that they had promised when the zero deal ran out, and they have not monkeyed around with payments, either. I pay them electronically from my non-B of A bank account, and they credit the payment the very next day. They did jack the minimum payment up, but since I've lately paid them quite a bit more than that, no problem. So far, so good.

I have the balance down to less than $1,800 at this point, should pay them off in about six months, but if they do pull any shit, I will just refi the balance to my credit union's card at 12%. I paid them just a bit more than minimum payments for the first ten months of the loan, so I could pay off a much bigger balance on another zero rate card. After that, the only thing left will be my car payment, which will be gone in a year. We'll see what sort of credit deals I can get at that point.

[pinniped]

19. Uh, many consumers were getting reamed with these BS changes last year.

It's a good thing the banks got a jump on things.

When President Barack Obama signed credit card reforms into law recently, bankers shook their fists and warned us we'd be sorry.

It's a good thing banks received their hundreds of billions in BS TARP shit scam funds, or they'd really be mad.

[sendero]

21. Well..

.... first of all this "reform" is a bunch of hot air. Without a cap on interest rates, it is not much of a reform at all.

I use credit cards to pay for restaurants, groceries, gas and online purchases. I pay off the balance every month and I get about $400 in cash back per year.

If they take away my cash back, I will cancel the card and find another way to pay for things.

[lildreamer316]

22. Who's least at risk? Someone who doesn't HAVE a credit card. Duh. n/t

[Better Believe It]

24. For the DU night owls

[roamer65]

25. Bring it on, scumbag banks.

The more you fuck with people, the higher the CC failure rates will go AND the more responsible people will just fuck you right back even harder. In the end...YOU LOSE.

[MadMaddie]

27. That's why I bank at a Credit Union just cancelled my BOA

acct. Good Riddance!

[deaniac21]

28. But we own the banks now. I have seen the enemy and he is us?

[Better Believe It]

29. We don't run the banks! And I don't own any bank. Bet you don't either!

[Quantess]

31. Ha ha. Yeah, right.

[dkf]

33. Big spenders generate "interchange" fees---will be prized by banks.

Arnold believes big-spending customers will continue to be prized, even if they don't carry balances, because they generate "interchange" fees, the fees paid by merchants to card issuers that average 1% to 2% of each transaction.

"Those interchange fees, 12 to 24 months from now, are going to be increasingly important for issuers," Arnold said.

[Greyhound]

34. Tonight I'm in a mood to celebrate this.

Yes, it will mean greater hardship for millions.

Yes, it will slow or maybe even kill any recovery over the summer.

Yes, it will put millions more into the pockets of the parasites that have been plaguing us for decades.

But tonight I'm just so damn disgusted with the sheeple and their determinedly aggressive ignorance, that I don't care.

Maybe the only thing that will finally break through those adamantine skulls is prolonged suffering in deprivation.

Yay parasites! Gobama!

[HOLOS]

37. stop paying