mingster

i don't want to discuss the political merit (or not) behind the bill that's surely to be passed soon and signed by the prez. what i want to know is what do you think the impact will be for people (i'm assuming most here are responsible borrowers) who're considered "deadbeats" - people who pay on time and never pays any fees, interest, etc.

from my perspective, i think i'll lose out quite a bit. i've used balance transfer offers (0%, no fee/no cost transfers) for the past 4 years to make money in my savings account. when the interest rates were higher, i was pocketing somewhere in the $1200/year range in interest. not a whole lot, but free money is free money, right?

now i'm looking at this bill and i'm thinking those days will probably be over. what are your thoughts?

GPMike

good riddance. Cheap money promulgated by the fed policies over the past decade and a half is what created the massively massive bubbles to begin with, and fueled an economy based on nothingness.

When a saver puts money away and that money is actually shrinking vs. the rate of inflation and zero to low interest rates...it actually ruined sound economic principles across the board in public and private sectors.

With these bailouts and government takeovers, rather than pure bankruptcies which should have happened, instead of the economy getting better, it will get far worse now as taxes will increase massively.

clawhammer

I think we will see a cut in rewards credit cards, maybe more cards offered with annual fees and no more introductory rates.

I haven't been able to take advantage of those 0% balance transfers because I felt like I needed to keep my credit score high until I owned my own house.

The one thing that I have been taking advantage of is the 1% cashback that I've been getting through my Citi card. I expect that this will be gone soon.

aklucsarits

It started already, long before this legislation was even created. All my best rewards cards have had their rewards programs eviscerated. The days of 2-5% cash back rewards are over.

Andrew

cthree

GPMike actually makes sense. People are stupid with credit especially revolving credit.

Get a home equity line of credit, pay your entire card balance each month and if you can't because you made a large one-time purchase pay the difference with your HELOC. Credit cards aren't a loan, they are a convenience. Credit card companies make their money from the merchants and from those who confuse revolving credit with a loan. People who pay their bills in full and on time each month are and have always been the banks least profitable customers.

The banks try to lure responsible people into their trap by ever increasing their credit limits hoping that some day you'll bite off more than you can chew. I have one card which has a limit of 1/3rd of my declared gross annual income. Do they really think I can rack up tens of thousands of dollars in purchases in a month and pay the bill in full? Of course not but they would like me too. I didn't ask for a high 5 digit credit line, it started at $5000 but within a year they raised it by a factor of more than 10. I've never spent more than $4000 a month on the card, why would I need enough credit to by a luxury car? I don't but they lay out a trap to lure you into a sense of having a lot more money than you really do and once you slip they whack you with a 19% interest rate and hundreds of dollars a month in interest charges.

They go after young people the hardest because they know that college students don't know their own limits yet and lack the discipline to use credit responsibly.

trackrat

My understanding is that the grace periods are now gone (at the option of the CC companies) and interest begins to accrue immediately. For those of us who had been putting everything on CC's (to rack up points, cashback, or whatever) and then paying the balance in full each month, i think we will have to pay close attention to any new envelopes full of fine print from the CC companies. I suspect these will tell us one of two things--that interest now accrues immediately, or that our annual fees have skyrocketed. In either event i will be paying with a debit card instead if things turn out that way. But really, who knows? Bottom line is that once the CC companies figure out what they want to do, we would all be wise to re-evaluate the cost/benefit of each individual card.

cthree

You have 21 days from the statement date to pay the balance before charges or interest. One practice the card companies were doing was mailing statements closer and closer to the due date to give you less time to pay. The new bill mandates a minimum of 21 days from the time the bill is mailed to the time it is due.

Incubus

I worked with a guy in college who charged up a $1000.00 card in a matter of months while paying the minimum ($20.00?) balance each month. One day he asked me how to go about getting his limit raised.

That's the only time I've ever lied to him. I said I don't really know, and they'd probably not want to since he's maxed out now. Little did he know they were itching to give him more credit.

He's since paid it off..(recently married) The only thing he's done now that I'm not sure about is lease a car simply to lower his debt:income and monthly bills to get a home loan.