Holiday Shoppers Beware: COMING SOON to a bank near you, "CARD," Opens nationwide on 2.21.10

Some still aren't aware of the major implications of the credit card reform that is happening in February 2010. In May '09, President Obama signed legislation (aka the Credit Card Accountability, Responsibility & Disclosure Act) to prevent credit card companies from continuing their shady behavior (raising interest rates, closing accounts w/o warning, decreasing credit limits BELOW existing balances & so on). Some of the pluses of the legislation are as follows:

• Restricts retroactive rate increases. Card issuers cannot raise the rate on your existing balance unless you are more than 60 days late on your account. They can only raise your rate on new purchases going forward. (If you are more than 60 days late, issuers are required to revert to the lower rate after you make six months of on-time payments.)

• Provides more advance notice of rate hikes. Card issuers must notify consumers of changes at least 45 days in advance. (This one has already gone into effect.)

• Increases time to pay bills. Card issuers must mail out statements at least 21 days before the due date. They must also consider a payment made before 5 p.m. Eastern on the due date as on-time. Payments due on a day when the issuer is closed for business (for example, a weekend or holiday) cannot be subject to late fees.

• Applies payments to high interest rate balances first. Many consumers’ accounts have different rates for different transactions. For ex. if you transferred a balance from an old card at a low interest rate but have since made new purchases at the regular interest rate with the new card. Under the new law, credit card companies must apply payments in excess of the monthly minimum toward the highest interest rate portion of the balance first.

• Eliminates universal default. If you’re late with a payment to another company, issuers can no longer raise your rate.

• Requires an opt-in for over-limit fees. Issuers must obtain a consumer’s permission to process a transaction that would put his or her account over its limit.

• Restricts college credit. Consumers under age 18 cannot receive credit, unless they are emancipated under state law or are designated as a secondary cardholder to a parent or legal guardian’s account. College-age applicants’ account limits will be limited to 20% of their annual income or $500, whichever is greater.
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If any of this is confusing to you then guess what??? You shouldn't be using a credit card!!! WHY would you buy something w/o knowing the price? That's exactly what you're doing if you use a credit card to purchase something w/o understanding how your credit card company is going to bill you for it. THINK TWICE BEFORE YOU SWIPE!

Especially since the credit card companies are coming back swingin! They're not taking this laying down. Many credit card issuers are strategically coming up with new ways to get around these new laws and still keep their grubby hands deep in your Louis Vuitton wallet.

Exhibit A: The 79.9% APR credit card....Yes, you read it right - 79.99999% interest on a credit card! Beware if you get a credit card offer in the mail from First Premier Bank for this debt-trap. Just to give you an idea of the implications. If you had a $300 balance on this card you would pay $20 per month in interest. Now multiply 20 times 12. I don't think I need to spell it out any further. It's absolute thievery. The saddest part is that First Premier is targeting people who already have bad credit b/c those are the ones who most rely on it & are likely to incur the most finance charges. *shaking my head* source



Please, please for the love of Gucci think twice before making all of those ridiculous holiday gift purchases for people you probably barely like or won't even be speaking to this time next year. Also, make sure that before 2.21.10 you take the time to find out exactly what changes your creditors are making to their terms for your own sake. For more on what CARD means for you personally CLICK HERE. And remember commandment #3 - if you can't afford to pay cash then you don't need to buy it!