I agree Mike, they have really out-done themselves this year, that’s for sure!

As a fellow Debt prisoner, it seems to me that the grace period given to the credit card companies has allowed them to increase all interest rates in order to offset not being able to charge crazy fees. Problem is, I NEVER pay any fees because I pay attention to my due date, limits and avoid fees at all costs possible. The way I see it, the CARD act has hurt me greatly because all of my interest rates have doubled due to the market changes and economy (whatever they want to use as an excuse) and now there is nothing I can do besides paying WAY more money than I should have to in interest or default and ruin my credit completely. Is there anything in the bill that addresses the fact that the credit card companies basically said, “OK, go ahead and pass a bill saying that I can’t increase interest rates because, thanks to the grace period, all of my customers will be paying 20% + in interest by February 2010 anyway.” ???

Will the passing of the CARD act in February change anything with these horrible rate increases for Excellent standing customers like myself?

Wanna write a guest post for me? lol – well said! – Joel

How would you like to be lending money to someone who is borrowing from you to stave off homelessness, or under the duress of life-threatening illness? Sure, they need it and depending on your religion you might see your rewards in heaven, but are they good credit risks? Hardly. Are you being a good steward of your stockholders’ money, that they are counting on for their retirement? Are you acting responsibly toward the people who work for you, who will be out of a job if you go under? Short answers: No and No.

ALL credit has become more risky in the last few years, and higher risk increases the reward that lenders demand. If they demand too much reward, they’ll lose good customers and therefore money, and if they demand too little reward, they’ll also lose money. It’s a difficult balancing act, and inevitably some will get it wrong.

Congress can further complicate the lenders’ balancing act, but where is the evidence that Congress knows what it is doing better than the market as a whole? The only law that Congress can never repeal, no matter how hard it tries, is the Law of Unintended Consequences.

If Congress succeeds in lowering the rewards companies receive from higher risk debtors, which is obviously its goal, then one or both of two things MUST happen: Either more lenders will go broke, reducing the supply of lenders (not a good thing for debtors or for the shareholders and employees of those lenders) or lower risk debtors will be forced to make up the difference or bear the inconvenience of going without credit, shifting the cost from one group of debtors to another.

I hope we can all understand why someone would charge groceries on a credit card rather than see their children go hungry, even if they have no clue how they’ll pay for it. But as a public policy matter, we should be asking why they don’t qualify for food stamps, not how we can stick the credit card company with their grocery tab.

Anyway, although it’s still not a fair fight the credit card companies did lose the battle on this one. I’m just curious how long these laws will be in place. After the next election? or permanent?

It may not be possible to move balances to another card in this environment, but the mistreatment should serve as a call to begin paying off the balances we have, and eventually to cut off the offending lenders.

If getting mad at our debt is too abstract to imagine, then maybe getting mad at the banks will be easier, and motivate us to get out of debt. It’s a matter of channeling negative energy into a positive direction. If we can, the abuse will turn out to be a blessing in disguise.

I know from first hand experience how frustrating it is to have a credit limit unexpectedly decreased (although I just applied for and was approved for a different credit card to make up for it so I can still keep getting cash back rewards to my hearts content) but I don’t think that that has anything to do with the Universal Default provision (I won’t get into that though because I have made my thoughts known on Matt’s Universal Default post already).

My one big concern though is that if the government continues to invade more and more into the private industry that it will only make it harder for people to have access to much needed credit in the first place (and Matt, I am referring to people that use credit responsibly – aka people like myself and this gentleman who always make payments on time or pay off balances in full or need a line of business credit or just want to get cash back, etc. ) – Joel

I don’t believe I intimated that in my original message, but if I did, I want to clear that up immediately.

Seriously, I have been following the CARD Act for a couple of years, since back when it was the Cardholders Bill of Rights. And, it is long overdue to protect consumers from preditory credit policies, such as Universal Default and nasty due date tricks.

Many are quick to blame consumers who have been iresponsible with credit and they definitely have been. But, that doesn’t give banks the right to abuse customers, which they are doing to the extreme.

Two wrongs don’t make a right.

That’s the most accurate statement I have heard today!