From experience of a friend:

He is an honest person who got accepted to a college here. He didn't know enough English to teach classes so he didn't have as much income as a normal grad-student. He had to rack up money on a credit card, however he ALWAYS paid his monthly minimum.... Except for one Christmas. He sent in his check like every other month, however there was a mix around the time of the holidays and it got there 2 days late. TWO DAYS. He was paying 400 a month just to pay off interest for the past 10 years and he wass just able to pay off his full debt when they reduced his interest rate back to normal because he was consistent with his payments. The company ruined his life for 10 years for something that wassn't even his fault.

After than, you know what? Fuck the credit card companies, Obama is doing what's right here. Could be a a little overboard, but consumers also need protection from this shit. Mafoo as always, just fails.

*sighs* No, this isn't Obama's fault. If anything, I'm glad to see that he's taking this change, which prevents the companies from randomly changing your terms to jump your interest rate.

Firstly, this does not outlaw variable rates, which some of you are making this out to be. When you get your card, you are told that your rate is prime + X%, changing usually quarterly. This is fine, and will remain so. What is being outlawed, though, is the ease of which they're willing to jump your rate for anything else other than prime going up. Say you pay on time for 3 years. The bills keep coming later and later. You pay one when it comes in (say, Wednesday), mail it out that evening, not noting that the bill says it's due Sunday. Of course, they won't get it until Monday, when it's late, and then they jump your interest to 29.99% for "a late payment." It also outlaws other companies who see this "late payment", despite paying every month on time with them, from jacking up your rates in a similar fashion.

Then you have the problem with the value of X. This new law is designed to protect your balances from a sudden change in X. For example, say you have a $5000 balance, and pay Prime + 2% on it. (X=2.) You receive notification that next month, X is going to equal 8. When you made that $5000 in purchases, it was under the guise of X=2. Your $5000 balance will be protected at this interest rate, provided that you don't severely default on your bill. Of course, any purchases you make after that date will then be at said higher interest rate.

Which brings us to the next part of the bill- fair distribution of payments. Right now, all payments are applied to the lowest interest part. Take that $5000. Say, $2000 is at a promo rate of X=-1, the other $3000 is at X=2. A $500 payment as of right now would bring the X=-1 to $1500, leaving the $3000 intact to collect higher interest. With the new bill, instead, that $500 would make the numbers $1800 and $2700 respectively, instead of the $1500/$3000.

So you have a fixed rate. Great! Any purchase you make with this term will stay fixed, again, unless you default. You will be protected against having this balance forcefully changed to a higher and variable rate. And this is a case where I would have liked protection.

I had a card with 9.9% fixed. In November 2008 (so it can't be blamed on Obama's bill), I got notification that in the billing cycle with 1/1/09, my rate would switch to 14.99% variable and not lower than 14.99%. At this time, I had no protection. I had only 2 options- suck it up and deal with it, or, the one I picked, opt out of the new terms, effectively closing the card under the old terms. So I'm paying off the card under the old terms, but when it's paid off, it gets closed out, and as it closes, there too, goes part of my credit history. It's a card I've had for 9 years when I received that letter, with nary even a late payment. But their predatory action, from the card having a balance for most of that 9 years, cost them a customer. It's no longer my primary card, the one that sees most of my internet purchases. Foolish Citibank...

So no, I don't, nor can I, blame Obama. If anything, it's just too late. And as others have said, the predators are trying to get in one last bite before they're banned from doing so. The best thing I can suggest now is to pay bills online. Read the terms carefully, though, as some of them will wait a few days to post your payment online. But it also means that companies like Capital One can't sit on a payment to post it late, citing mail delays to jack up rates and fees. (I actually sent C1 a payment with delivery confirmation. Received on Tuesday, due Thursday, processed Friday. The card was immeadiately closed afterwards by me.)

Mafoo wrote:

"Well I have three questions for you.

1. do you think it's the governments job to protect us from ourselves?

2. Do you think the reform we are talking about is to protect us from ourselves?

3. Are you for this reform laws?"


1. Yes

2. Yes

3. Yes

      A lot of these credit card companies are the same banks that received multi-billion dollar bailout packages from the government in the past six to seven months.  That would seem like revenue to me.  I mean if I got a billion dollars from the government and had wasted most of it within six months flying to monaco or something, then I would think there was definitely something wrong with me.

  Yet, these companies like Citi Bank that received these bailouts are still calling up their credit card holders that can't pay their bills at least once or twice a week and demanding money or threatening lawsuits on people that can't pay.

   And whose fault is it these people can't pay?  Some of these companies are pre-approving people with minimum wage jobs for thousands of dollars of credit card money?  Would you pre-approve a maintenance man at a fastfood restaurant thousands of dollars in loans with them having no collateral?  Then raise rates and expect them to be able to pay?

Anyway, I think these companies are trying to double dip.  They're trying to get the bailout money from the government and and still trying to get the money back from those they loaned it to.  Such a practice is double dipping.  Teachers can't get teacher retirement and social security benefits too.  So what makes these companies any different.

I don't think the Founding Fathers of this country saw corporations rising up to be their own gestapos in a free society and I think they would have nipped it in the bud if they did.