Stop Helping Me

Originally published at Flametoad. You can comment here or there.

So, you know the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act that the president just signed? The one that’s supposed to give all of us common people relief from the tyranny of the card companies by letting us go longer before we’re charged late fees? The one in which card companies have to give 60 days notice before they raise your rates? What a great thing for consumers! Way to stick it to those greedy banks!

Except…it’s not quite that easy. Card banks aren’t able to apply the cost of riskier transactions onto the people who are making those risky transactions–those with bad credit, who pay late, or who don’t pay at all. That was the idea behind the law. But the card banks aren’t just shrugging their shoulders and giving up. Someone has to cover those risky transactions. Since the card banks can’t make those people pay, they’re starting to look at other places to shift that cost. But how?

Fees

Remember when card banks charged annual fees ranging anywhere from $40-$100 for the privilege of using their card? Market competition has mostly driven those fees away. Look for some banks to start charging annual fees again. But hey, they have to give you 60 days notice before they do it so it’s a victory for consumers, right?

Goodnight, Grace

Here’s one even better. Keep an eye out for this letter from your card companies. Chase, one of my card banks, already sent me notification that in 60 days they’re setting my rates to x%–on all charges from the time of purchase.

Card banks (or at least mine) are eliminating the 30 day grace period cardholders have traditionally been given to pay back purchases without interest. All the Obama administration’s law has done is allow the card banks to shift the costs of all the people who are defaulting on their credit card payments to those of us who faithfully pay off our balances every month on time.

What’s a person to do?

Keep an eye on your mail, and read notices carefully. Don’t be afraid to call up your card bank and cancel your card. Getting screwed with 60 days notice is still getting screwed. Even though I’ll be forgoing the rewards points, I’ll probably be shifting most of my purchases to a debit/check card. Most of all, please tell the government to stop “helping” us. I can’t afford it.

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