Cheat Sheet
The Best In Brief
Relief for Credit Card Holders
The government has not yet aided struggling homeowners directly, but the Federal Reserve is considering relief for credit card holders. The Washington Post reports the Fed will vote on Thursday "on sweeping reform of the credit card industry that would ban practices such as retroactively increasing interest rates at will and charging late fees when consumers are not given a reasonable amount of time to make payments." The proposal includes a ban on raising the interest rates on credit card debt unless the customer was more than 30 days late in paying the minimum. If the Fed approves, it will be, consumer advocates say, the biggest overhaul of the credit card industry in decades. "It covers a lot of issues and is really unprecedented in its scope," said the CEO of the American Bankers Association. "You add them all up, it's going to mark the beginning of a new market."
Partner Sites: Expedia| Hotels| Hotwire| Urbanspoon| Vimeo
Regardless of the credit card bill about to be passed; what is the strategy for the billions of dollars in credit card debt held by financial institutions that will have to reconciled when people who have lost their jobs or "down sized" cannot pay their credit card balances?
Will this be the next "shoe to drop" in the financial crisis?
How about this... only allow BANKS to issue credit cards, and require the interest rate to be tied to the interest they pay on savings accounts. Let the spread be 5-8%, so if they want to charge 20% interest, they need to offer anyone who wants one, a savings account that pays 12-15% interest. If they only want to pay 1% interest on savings, they can only charge 6-9% interest on credit.
This is not relief for those who pay their bills on time and in full. The banks will now look to institute annual fees and do away with rewards and points to make up for the lost revenue they made on those who paid late and not in full. Thanks President Obama. I'm glad we are bailing out the people who shouldn't have been given mortgages in the first place and couldn't keep up w/ their payments plus the deadbeats with credit cards. Plus, we bailed out the same institutions that contributed to this mess. I love being charitable. What a country. Welcome to Europe folks.
Thank you.
As a first time user, your comment has been submitted for review. It can take anywhere from a few hours to a day or two for your comment to be reviewed, depending on the time of week and the volume of comments we receive.
Please log in to leave comments.