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Author: BaritoneFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308519  
Subject: Credit Card Consumers Bill of Rights Date: 6/9/2000 5:49 PM
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I've had it with the credit card industry. The scum of the earth First USA continues to get away with its atrocities, unregulated. Unfortunately, the rest of the industry is watching and ultimately following.

It's time now to reign them in. I want ten new regulations on the conduct of credit card companies. It will be our Bill of Rights.

So reply to this message with your suggestions. In a week or so, I will compile them and issue polls to decide which suggestions have the most merit, which need more debate, and which to leave out.

I'll start with some of my suggestions:

THE CREDITOR MAY NOT BAIT AND SWITCH

The consumer has the right to keep the original credit terms. If a credit card company subsequently wants to raise interest rates, the balance under the previous rate remains under the previous rate until paid. New charges create a separate balance that is charged a higher rate. Customer payments are applied first to the minimum payment due on the higher APR balance, then to the lower APR balance.

[This seems to be all the rage. Every card issuer is abusing this and it's time to stop it.]

THE CREDITOR MUST GIVE CLEAR NOTICE

Notices sent to consumers must be sent in an envelope separate of any advertising or other obfuscating material. The envelope must be clearly marked "IMPORTANT CHANGE OF CREDIT TERMS NOTICE ENCLOSED." The notice is limited to information detailing and explaining the change of terms.

[Can't hide the notice in a sidebar for a throw-away ad enclosed with your bill. Hear that, First USA?]

NO MORE LATE FEE GAMES

Timliness in payment in determining late fees or account delinquencies are calculated by the date of the postmark or electronic funds transmission, not on when the bank received the funds. Any ambiguity due to a missing or illegible postmark will be decided in favor of the consumer. If the funds transfer is not subsequently honored by the customer's bank, then a late fee may apply.

[A law like this would have prevented the First USA debacle last summer. First USA is being sued by investors alleging that they intentionally posted payments late in order to collect late fees, thus falsely propping up their earnings. Evidence on First Scams seems to confirm this.]

CREDIT LIMIT CHANGES

If the creditor desires to decrease a credit limit, it must give 30 days notice before affecting the change.

[Hey MBNA, I wrote this just for you.]

NO REAPPROVAL REQUIRED

Creditors may not change the terms of an agreement based on subsequent information appearing in credit reports.

[Another bait and switch scam. Give you a $10,000 credit line and then when you use half, run the credit report and jack up the rate or lower the limit. Puh-leeze.]

SIMPLER MATH, PLEASE

Creditors must calculate finance charges based on the activity within a single billing cycle using a formula or algorithm demonstrated accessible to 85% of High School graduates.

[Enough of this two-cycle double backflip compound complex method of figuring out how much my finance charge is. It's so difficult, MS Money and Quicken don't even try to do it anymore.]

DON'T HIDE MY CREDIT WORTHINESS

Creditors who rely on credit bureau reports should report all the information about their accountholders, including balance, credit limit, terms, and timeliness of payments.

[If I'm a good payer, tell the credit bureau.]

FEES FOR CASH TRANSACTIONS

No fees for cash or cash-like transactions are permitted unless individually acknowledged electronically or in writing at the time of the cash advance.

[No more tricking your customer into fees by sending them checks.]

ALL COMPLAINTS SERIAL NUMBERED

All complaints or disputes received by a credit card issuer are to be assigned a serial number which is communicated back to the consumer. The creditor must maintain a adequate system of tracking the complaints and disputes, the serial numbers, the status of the investigation, the disposition, and the communication of the results to the customer.

[No more "I can't find any record of your dispute and I can't accept it now because it's over 60 days" stories.]

That's all I can think of right now. Please add your suggestions. Maybe we can get some laws passed in the next congress.

Robb
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Author: estermae Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36024 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/9/2000 7:58 PM
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ALL COMPLAINTS SERIAL NUMBERED

All complaints or disputes received by a credit card issuer are to be assigned a serial number which is communicated back to the consumer. The creditor must maintain a adequate system of tracking the complaints and disputes, the serial numbers, the status of the investigation, the disposition, and the communication of the results to the customer.

[No more "I can't find any record of your dispute and I can't accept it now because it's over 60 days" stories.]


I love this one. Robb, you are priceless. You get this one passed and I'll throw you a party that will make the Democratic National Convention look like a Monday at work.

I'll have to think of this for a while to add any ideas. You have already covered my first thoughts on the subject.

Ester




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Author: estermae Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36030 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/9/2000 10:17 PM
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I have a few more for you. These are for our own protection because the credit companies feed on our lack of knowledge and willpower.

How about no soliciting on College Campus'. Or maybe "school grounds" since they are now soliciting even high school seniors.

All applicants must actually have an income before a card can be issued (this happens all the time).

Combined credit limits of all of the applicants cards must not exceed 15% of the applicants net annual income. (Beyond that is where everybody gets into trouble. The credit card companies know it and don't care.)

Thats all for now.

Ester

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Author: PlasticLeo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36031 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/9/2000 10:30 PM
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Very impressive Robb!
Hey man, I want in...
I'll be like that Irish guy character in 'Bravehart' (Mel Gibson's movie). Except that my line would be something like this... "If I join you, do I get to kill some CC?" :-)
All kidding aside, I think I may have a suggestion.

TERMINATION OF CONTRACT
The contract may be terminated at any time by the consumer by written notice to the creditor. The creditor will be required to respond within "a reasonable time." When the creditor still have not complied with their obligation, consumer will file a complaint with the FTC and retain his/her attorney to pursue his/her right to recover damages under the Fair Credit Reporting Act. The creditor will also have to forward the consumer the names and adresses of individual they contacted to verify the information so the consumer may follow up.


I know that I'm not the only one that have a problem when it comes to closing my account.


PlasticLeo


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Author: Toto2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36051 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/10/2000 7:50 AM
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Hey, Robb,

This is a great piece, really!

Once it's completed, I think I'll be sending a copy to my senators and congressmen as well.

I'm looking forward to other Foolish input on it, too.

Again, great piece,

mike

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Author: TMF2Aruba Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36085 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/10/2000 2:24 PM
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Once it's completed, I think I'll be sending a copy to my senators and congressmen as well.

Toto, if they don't move on it, perhaps you could run for office and get the bill enacted.

And all your supporters will shout....

"Run, Toto, Run! Run, Toto, Run!"

(couldn't resist) ;)

Tony
...but I still am...

Off2Aruba



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Author: estermae Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36091 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/10/2000 3:34 PM
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And all your supporters will shout....

"Run, Toto, Run! Run, Toto, Run!"

(couldn't resist) ;)


What a hoot!!

Follow the yellow brick road.

Ester



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Author: Toto2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36093 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/10/2000 3:50 PM
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And all your supporters will shout....

"Run, Toto, Run! Run, Toto, Run!"

(couldn't resist) ;)

Tony


Anyone know why I'm picturing Janet Reno chasing me on a bicycle?!

mike

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Author: TMF2Aruba Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36096 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/10/2000 3:59 PM
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Anyone know why I'm picturing Janet Reno chasing me on a bicycle?!

ROFL!!! What an image!

Tony
...but I still am...

Off2Aruba

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Author: woefulisme Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36117 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/11/2000 1:07 PM
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Great thread so far! And I'm sure it will only get better! I agree with the original post and with most of what's already been added. I have a couple of additions to suggest and then one mildly strong disagreement to a portion of a follow-up post. BaritoneFool, I'm don't know yet how to create large font bold headings in my reply, so I'll place my suggested topic headings in quotation marks:

"The Creditor Must Acknowledge That The ONLY Legitimate Business Relationship Is The One Existing Between the Creditor and the Customer"

No more jacking up interest rates or changing other conditions because the customer made a late payment to SOMEONE ELSE! If the customer was late on another bill, that is NONE OF THE CREDITOR'S BUSINESS until and unless the customer also makes a late payment to it, and is certainly no excuse for 'piling it it on' by universally jacking up all the customer's other rates. On the contrary, if the customer was late for someone else, but CHOSE to keep current with you, that is something you, as a creditor with supposedly good business sense, should want to ENCOURAGE!

"The Creditor Will NOT Make Agreement-in-Advance To Arbitration For Settling Future Legal Disagreements a Condition for Opening an Account or for Continuing an Existing Account"

Self-explanatory. I look forward to the day when some court declares this transparently ugly and self-serving tactic unenforceable.

Now, for my one bit of disagreement, with Estermae's reply. She proposed limiting total extensions of credit to 15% of income. 15% sounds very arbitrary, and was probably just a figure plucked out of the air. I am against any consumer legislation placing such caps. It is one thing if an individual creditor's underwriting standards frown on that level of credit. It is quite another thing to try to "legislate" such cookie-cutter formulas. We already have enough nannyism in this country. People are each entitled to their own risk comfort-levels. Knowing yourself, you may feel uncomfortable going beyond 15%. Your neighbor, however, may tolerate, and in fact may even have a legitimate need for, let's say 20%. In my opinion, no consumer Bill of Rights should touch the issue of deciding for people how much credit they can LEGALLY have. That totally negates Freedom of Choice. People (again, in my opinion) even have the right to make stupid mistakes (and hopefully learn from them).



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Author: estermae Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36122 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/11/2000 5:02 PM
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She proposed limiting total extensions of credit to 15% of income. 15% sounds very arbitrary, and was probably just a figure plucked out of the air.

Hi woefulisme,

Yes, 15% was an arbitrary figure. Actually, the "suggested" rate is 12% but of course I would not expect legislation limiting a specified % of income to credit limit ratio. I was venting. :-) It was Friday and it had been one of those days. We had too many clients with limited income (under $2000 per month-hosehold) with credit card debts in excess of $25k even $50k. Granted, they are the ones that got the cards and used them but wouldn't the cc companies have some responsibility for extending such high credit limits to someone with such limited income? Anyways, that was my point. I just didn't state it. If such a bill was to come up I would be one to argue against it.

Another point I had made was All applicants must actually have an income before a card can be issued (this happens all the time). :-) That was also venting.

I stand by my first one though, "No soliciting on school campuses".

And please call me ....Ester

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Author: BaritoneFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36151 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/12/2000 12:31 AM
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Hi everyone,

Good input so far. I've taken the liberty of editing some of the language to make it fit, but I tried not to change the meaning. Please let me know if I unintentionally changed the meaning of your favorite provision.

If you are new to this thread, we are proposing new legislation to defang the credit card industry. While they deserve the right to a profitable return on their business services, some of their latest practices are downright predatory. We hope to return some humanity to the industry with these provisions.

Comments and additions welcome!

Thanks

Robb

CREDIT CARD BILL OF RIGHTS

THE CUSTOMER HAS THE RIGHT TO THE AGREED TERMS

The consumer has the right to keep the original credit pricing terms. If a credit card company subsequently wants to change the pricing terms, 30 days written notice is required. After the notice period, the balance under the previous pricing terms remains under the previous terms until paid. New charges create a separate balance that is charged according to the new pricing terms. Customer payments are applied first to the minimum payment due on the higher effective-APR balance, then to the lower effective-APR balance.

Pricing terms means any term that affects the resulting APR, including, but not limited to, rates, payment periods, fees, and grace periods.


THE CREDITOR MUST GIVE CLEAR NOTICE

Notices sent to consumers must be sent in an envelope separate of any other advertising or other obfuscating material. The envelope must be clearly marked "IMPORTANT CHANGE OF CREDIT TERMS NOTICE ENCLOSED." The language in the notice is limited to information detailing and explaining the change of terms.


NO MORE LATE FEE GAMES

Timeliness of payment for determining late fees or account delinquencies are calculated by the date of the payment postmark or other transmission. Any ambiguity due to a missing or illegible postmark will be decided in favor of the consumer.


CREDIT LIMIT CHANGES

If the creditor desires to decrease a credit limit or otherwise restrict charging privileges allowed under the current agreement, it must give 30 days notice before affecting the change.


NO 3RD-PARTY CREDITOR INFORMATION AS A BASIS OF A DECISION TO CHANGE TERMS

Except in the case of suspected fraud, creditors may not change the terms of an agreement based on subsequent information appearing in credit reports including but not limited to 3rd party creditor histories, public record information.


CLEAR AND CONCISE CREDIT TERMS

Creditors must calculate finance charges based using a formula or algorithm demonstrated accessible to 85% of High School graduates.


TRUTH IN CREDIT REPORTING

Creditors who rely on credit bureau reports should report all the information about their accountholders, including balance, credit limit, terms, and timeliness of payments.


FEES FOR CASH TRANSACTIONS

No fees for cash or cash-like transactions are permitted unless individually acknowledged electronically or in writing at the time of the cash advance.


ALL COMPLAINTS SERIAL NUMBERED

All complaints or disputes received by a credit card issuer are to be assigned a serial number which is communicated back to the consumer. The creditor must maintain an adequate system of tracking the complaints and disputes, the serial numbers, the status of the investigation, the disposition, and the communication of the results to the customer.


NO SOLICITITING TO STUDENTS

A credit card issuer may not market or solicit its business to students under the age of majority, nor shall it market or solicit at student campuses or to student bodies where students are benefiting from government provided or guaranteed student loans.


TERMINATION OF AGREEMENT IS PERMANENT

Account closures shall be permanent and irrevocable. The issuer is no longer permitted to charge items on the consumers account or bill the consumer for charges. The credit card issuer may not subsequently provide the consumer's personal information to any 3rd party except a credit bureau for the purposes of credit reporting. The card issuer will acknowledge the permanent closure of the account and the termination of the agreement in writing.


NO BINDING ARBITRATION

A credit card issuer can not require or enforce an agreement requiring non-judicial arbitration of disputes.


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Author: bstroh Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36170 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/12/2000 11:21 AM
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I've got a few comments on this (which I'm sure folks were expecting...:)


CREDIT CARD BILL OF RIGHTS

...An Affirmation of the Consumer's Right to Remain Uninformed and Irresponsible...

THE CUSTOMER HAS THE RIGHT TO THE AGREED TERMS

The consumer has the right to keep the original credit pricing terms. If a credit card company subsequently wants to change the pricing terms, 30 days written notice is required. After the notice period, the balance under the previous pricing terms remains under the previous terms until paid. New charges create a separate balance that is charged according to the new pricing terms. Customer payments are applied first to the minimum payment due on the higher effective-APR balance, then to the lower effective-APR balance.

Pricing terms means any term that affects the resulting APR, including, but not limited to, rates, payment periods, fees, and grace periods.


Of course you realize, this will be the end of any type of low rate offers... As the economy changes, the 'cost of money' changes. When it costs more for the card issuer to get financing, the rate is passed on to card holders. (Surprise - the card issuers don't print money; they borrow the money to pay for the purchases up front.)

If this type of regulation was created, APR would be set for 'worst case' situations, as it would not be able to be changed relative to the economy.


THE CREDITOR MUST GIVE CLEAR NOTICE

Notices sent to consumers must be sent in an envelope separate of any other advertising or other obfuscating material. The envelope must be clearly marked "IMPORTANT CHANGE OF CREDIT TERMS NOTICE ENCLOSED." The language in the notice is limited to information detailing and explaining the change of terms.


The creditor currently sends notice. Maybe just to be on the safe side, we should require that the account information be delivered by a process server, and stapled to the forehead of the account holder?

Is the concept of >READ YOUR MAIL< so hard to grasp?


NO MORE LATE FEE GAMES

Timeliness of payment for determining late fees or account delinquencies are calculated by the date of the payment postmark or other transmission. Any ambiguity due to a missing or illegible postmark will be decided in favor of the consumer.


This, I actually agree with. In many cases, agreeing to accept money by mail makes the Postal Service an 'agent' of the recipient, and the recipient is considered to have it as soon as it's mailed.


NO 3RD-PARTY CREDITOR INFORMATION AS A BASIS OF A DECISION TO CHANGE TERMS

Except in the case of suspected fraud, creditors may not change the terms of an agreement based on subsequent information appearing in credit reports including but not limited to 3rd party creditor histories, public record information.


This doesn't make any sense at all. That's the entire point of the credit bureaus. It provides a single source of information about a person's creditworthiness and financial history. If the credit issuers can't look at this history, how do you expect them to correctly assess their risk?

Are you saying that a person with 4 accounts over 30 days presents the same credit risk as the person with none? Surprise - they're the same person, 90 days apart.


CLEAR AND CONCISE CREDIT TERMS

Creditors must calculate finance charges based using a formula or algorithm demonstrated accessible to 85% of High School graduates.


Like multiplication and division?

APR / (1/12) = monthly rate
Average Balance * monthly rate = monthly interest

Average Balance may be calculated slightly differently depending on normal or two-cycle calculation, but it's still just an average.

There are slight modifications to this for daily accrual, but the point remains - this isn't differential calculus...

...and btw, I took that off my monthly statement.

TRUTH IN CREDIT REPORTING

Creditors who rely on credit bureau reports should report all the information about their accountholders, including balance, credit limit, terms, and timeliness of payments.


I agree here, also. It's not fair to hide customers from other companies, if you're using information from some of those same other companies.

I think a reciprocal relationship from anyone using credit bureau information is appropriate.


FEES FOR CASH TRANSACTIONS

No fees for cash or cash-like transactions are permitted unless individually acknowledged electronically or in writing at the time of the cash advance.


That's absurd. For starters, it's not reasonable to reprogram every ATM in the world to get transaction cost information from every card issuer. (Before you mention that they currently print the fee notice, remember that they only print the fee for the ATM owning bank, >NOT< the card issuer.)

It's also lowering the bar to a point where many of us wouldn't even trip over it. I really dislike the 'Assume everyone is uninformed/unaware/clueless because someone might be' approach.

It's amazing to me that people spend more time learning how to program their universal remote than they do learning the terms of their financial accounts.


ALL COMPLAINTS SERIAL NUMBERED

All complaints or disputes received by a credit card issuer are to be assigned a serial number which is communicated back to the consumer. The creditor must maintain an adequate system of tracking the complaints and disputes, the serial numbers, the status of the investigation, the disposition, and the communication of the results to the customer.


Fair enough. In my dealings with various card issuers, I've never had a problem resolving a dispute. For the record, though, in a lot of cases, you'll be given a call number or something similar already. Choosing to write it down and follow up are up the consumer.


NO SOLICITITING TO STUDENTS

A credit card issuer may not market or solicit its business to students under the age of majority, nor shall it market or solicit at student campuses or to student bodies where students are benefiting from government provided or guaranteed student loans.


...and we're back to our assumption that legal adults are apparently not capable of entering legal contracts. Students creating Yahoo, Excite, Fogdog, etc, and ending up multi-millionaires are still so incompetent, they must be protected from credit card issuers.

It's interesting that everyone wants to prevent applying for the account, before any irresponsibility has been demonstrated.

The problem isn't credit - it's irresponsible use of credit. No one is forced to charge anything, not pay it off in full, carry a balance, make late payments, or go over the limit. Those are >decisions< made by >adults.<


TERMINATION OF AGREEMENT IS PERMANENT

Account closures shall be permanent and irrevocable. The issuer is no longer permitted to charge items on the consumers account or bill the consumer for charges. The credit card issuer may not subsequently provide the consumer's personal information to any 3rd party except a credit bureau for the purposes of credit reporting. The card issuer will acknowledge the permanent closure of the account and the termination of the agreement in writing.


Here again, we agree. After an account has been closed, charges should not be accepted on it. At that point, the vendor has recourse to the former card holder, not the card issuer.

I'd amend this, though, so the account could be reopened by the cardholder. Someone might actually want to reactivate an account on more favorable terms, for example.


NO BINDING ARBITRATION

A credit card issuer can not require or enforce an agreement requiring non-judicial arbitration of disputes.


Is this just targetted at credit card issuers? Because they aren't the only companies doing this. If not, could you explain how that would be fair and appropriate?



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Author: BaritoneFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36178 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/12/2000 12:46 PM
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THE CUSTOMER HAS THE RIGHT TO THE AGREED TERMS

The consumer has the right to keep the original credit pricing terms. If a credit card company subsequently wants to change the pricing terms, 30 days written notice is required. After the notice period, the balance under the previous pricing terms remains under the previous terms until paid. New charges create a separate balance that is charged according to the new pricing terms. Customer payments are applied first to the minimum payment due on the higher effective-APR balance, then to the lower effective-APR balance.

Pricing terms means any term that affects the resulting APR, including, but not limited to, rates, payment periods, fees, and grace periods.


Of course you realize, this will be the end of any type of low rate offers... As the economy changes, the 'cost of money' changes. When it costs more for the card issuer to get financing, the rate is passed on to card holders. (Surprise - the card issuers don't print money; they borrow the money to pay for the purchases up front.)

If this type of regulation was created, APR would be set for 'worst case' situations, as it would not be able to be changed relative to the economy.


As you observed, when the economy changes, the cost of money changes. However, when a customer has built a balance, the money is already spent. It did not suddenly become more expensive. The banks borrowed the money at one percentage rate and pay it back at that rate which remains the same even if rates subsequently go up. But they treat us consumers differently, raising rates on existing balances.

What is the definition of a fixed interest rate? What is the difference between a variable-rate card and a fixed-rate card where the credit card issuer raises the "fixed" rate every time the Fed does? Answer: There is no difference. This is an abuse called "bait and switch." Sign the customer up for a "fixed" deal that is defacto a variable one.

This proposal stops that abuse.

They can still raise the rate, but only on future balances, which is exactly the way that banks pay for the money they are lending.


THE CREDITOR MUST GIVE CLEAR NOTICE

Notices sent to consumers must be sent in an envelope separate of any other advertising or other obfuscating material. The envelope must be clearly marked "IMPORTANT CHANGE OF CREDIT TERMS NOTICE ENCLOSED." The language in the notice is limited to information detailing and explaining the change of terms.


The creditor currently sends notice. Maybe just to be on the safe side, we should require that the account information be delivered by a process server, and stapled to the forehead of the account holder?

Is the concept of >READ YOUR MAIL< so hard to grasp?


Actually, there are many documented cases on First Scams were no notice was ever received (from First USA). And there are even more documented cases where the notice came in 6 point type on the side bar of some 4-page ad for merchandise that most people would view as junk mail and habitually throw away.

The reason that credit card companies do this, according to them, is to provide the customers with maximum value by offering them goods and services they might enjoy while they are making necessary communication with them.

I think that the reason that card companies do this is to hide the fact that they are changing the terms of the agreement so that customers won't notice in time to close their credit lines to prevent the unfavorable terms from going into effect.

First USA is not the only card company that does this now, so it's not fair to blame just them.

NO 3RD-PARTY CREDITOR INFORMATION AS A BASIS OF A DECISION TO CHANGE TERMS

Except in the case of suspected fraud, creditors may not change the terms of an agreement based on subsequent information appearing in credit reports including but not limited to 3rd party creditor histories, public record information.


This doesn't make any sense at all. That's the entire point of the credit bureaus. It provides a single source of information about a person's creditworthiness and financial history. If the credit issuers can't look at this history, how do you expect them to correctly assess their risk?

Are you saying that a person with 4 accounts over 30 days presents the same credit risk as the person with none? Surprise - they're the same person, 90 days apart.


Issuers of loans of any type have been successfully weighing risk at the time of the application for decades. Only recently have credit card companies started looking at credit histories every two or three months as an excuse to jack up rates. The consumer is not notified when a payment is reported late the bureaus, and has no opportunity to dispute it or provide mitigating information prior to an unfavorable change of credit terms. That is an abuse of the system. This corrects that abuse and returns the credit card industry back into the fold of common lending practice.


CLEAR AND CONCISE CREDIT TERMS

Creditors must calculate finance charges based using a formula or algorithm demonstrated accessible to 85% of High School graduates.


Like multiplication and division?

APR / (1/12) = monthly rate
Average Balance * monthly rate = monthly interest

Average Balance may be calculated slightly differently depending on normal or two-cycle calculation, but it's still just an average.

There are slight modifications to this for daily accrual, but the point remains - this isn't differential calculus...

...and btw, I took that off my monthly statement.


I might be with you on this. I see the two-cycle calculation as an interest-rate-hiding money grab. In my attempts to stop that abuse, I don't think I've come up with the right solution. Maybe you have a better way to express it.

The two-cycle system is designed to reap interest that is not deserved. The money has been paid back -- stop charging interest on it!


FEES FOR CASH TRANSACTIONS

No fees for cash or cash-like transactions are permitted unless individually acknowledged electronically or in writing at the time of the cash advance.


That's absurd. For starters, it's not reasonable to reprogram every ATM in the world to get transaction cost information from every card issuer. (Before you mention that they currently print the fee notice, remember that they only print the fee for the ATM owning bank, >NOT< the card issuer.)

It's also lowering the bar to a point where many of us wouldn't even trip over it. I really dislike the 'Assume everyone is uninformed/unaware/clueless because someone might be' approach.

It's amazing to me that people spend more time learning how to program their universal remote than they do learning the terms of their financial accounts.


Ask yourself, why does the credit card industry charge these fees for cash transactions? They are not more expensive. They are not more risky. The banks actually promote them by sending you those "convenience checks."

The reason is that they've looked at the average consumer and figured out that they don't read the cardmember agreement before deciding to do a cash transaction. So they promote these and deal with the surprised and disappointed customer later, usually rudely.

And yes, if this was federal law, you can be sure that terminals would quickly and easily be programmed to support the provisions of this bill. Otherwise, they're out of the cash advance business, and that's just not a wise decision.

It's also lowering the bar to a point where many of us wouldn't even trip over it.

Yeah, cool huh! I'm amazed that you don't see this as a good thing. But you are obviously aware that the way things are now, they are designed so that many of us WILL trip over it.


NO SOLICITITING TO STUDENTS

A credit card issuer may not market or solicit its business to students under the age of majority, nor shall it market or solicit at student campuses or to student bodies where students are benefiting from government provided or guaranteed student loans.


...and we're back to our assumption that legal adults are apparently not capable of entering legal contracts. Students creating Yahoo, Excite, Fogdog, etc, and ending up multi-millionaires are still so incompetent, they must be protected from credit card issuers.

It's interesting that everyone wants to prevent applying for the account, before any irresponsibility has been demonstrated.

The problem isn't credit - it's irresponsible use of credit. No one is forced to charge anything, not pay it off in full, carry a balance, make late payments, or go over the limit. Those are >decisions< made by >adults.<


I think it's inconsistent to be offering low-rate, secured loans to students and at the same time encourage them to rack up credit card debt. Students smart enough to control their debt are also smart enough to go to their bank and apply for it. But these days students are signing up for cards and getting "cool shades" and t-shirts and have no means of paying back their balances. They enter the working world tens of thousands of dollars in debt, aside from the student loan they must begin repaying.

I'm a tax payer and it's my money being lent or being used as security for these loans. I don't want to see it paying for a $2,000 stereo charged to someone's Visa.


TERMINATION OF AGREEMENT IS PERMANENT

Account closures shall be permanent and irrevocable. The issuer is no longer permitted to charge items on the consumers account or bill the consumer for charges. The credit card issuer may not subsequently provide the consumer's personal information to any 3rd party except a credit bureau for the purposes of credit reporting. The card issuer will acknowledge the permanent closure of the account and the termination of the agreement in writing.


Here again, we agree. After an account has been closed, charges should not be accepted on it. At that point, the vendor has recourse to the former card holder, not the card issuer.

I'd amend this, though, so the account could be reopened by the cardholder. Someone might actually want to reactivate an account on more favorable terms, for example.


Nothing should prohibit you from getting a new agreement, but it should clearly be a new agreement. I don't want the bank to be able to interpret some new (usually bogus) charge coming across the wire 6 month later as your prima facie evidence that you wish to reopen the account. This is the abuse we're trying to avoid.


NO BINDING ARBITRATION

A credit card issuer can not require or enforce an agreement requiring non-judicial arbitration of disputes.


Is this just targetted at credit card issuers? Because they aren't the only companies doing this. If not, could you explain how that would be fair and appropriate?

Credit card companies are using binding arbitration to avoid class-actions by their cardholders. You can't open a class-action binding arbitration. They know that, but cardmembers do not think about it when they first see this provision and accept it.

Lacking any other method for little Joe Consumer to face down MBNA, this gives the consumer some legal clout.


Good arguments, let's keep them coming and stay positive. We can disagree and still be friends.

If you have a better suggestion for that two-cycle preventing simple math provision, please let me have it.

Thanks,

Robb

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Author: bstroh Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36199 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/12/2000 2:42 PM
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As you observed, when the economy changes, the cost of money changes. However, when a customer has built a balance, the money is already spent. It did not suddenly become more expensive. The banks borrowed the money at one percentage rate and pay it back at that rate which remains the same even if rates subsequently go up. But they treat us consumers differently, raising rates on existing balances.

I'd also point out that the issuer borrowed the money at fixed terms, including the length of the loan. In the case of a credit card account, there is no defined term. A customer could choose to revolve that balance forever.

This seems like a good time to point out that the customer has the option of not accepting the rate increases, by sending a written notice, and no longer using the account.

Again, no one is forcing higher rates on anyone.

Also, having different rates for different pieces of the balance seems to fly in the face of your request for simpler math.

What is the definition of a fixed interest rate? What is the difference between a variable-rate card and a fixed-rate card where the credit card issuer raises the "fixed" rate every time the Fed does? Answer: There is no difference. This is an abuse called "bait and switch." Sign the customer up for a "fixed" deal that is defacto a variable one.

A fixed rate is not based on a common index; LIBOR + x%, Prime + x%, whatever. Variable rates automatically vary with changes in the underlying index. Fixed rates don't. Fixed rates are changed due to economic factors, account history, etc.

I'd agree that 'fixed' isn't the word I'd choose to differentiate the accounts. However, the process of changing the rate on the account is in the cardholder agreements, which people seem to find not worth the trouble to read.

This proposal stops that abuse.

For those who think it's abuse, as opposed to customers who don't take the time to understand the terminology of the industry...

They can still raise the rate, but only on future balances, which is exactly the way that banks pay for the money they are lending.

I think you'll find that banks lending money in non-credit card situations have a few other things in common - a fixed term, fixed payments, collateral in many cases, etc. I'm guessing you don't suggest that we back credit cards with a house or car?

Card issuers get financing via investors, selling CDs, deposit accounts in some cases, etc. All fixed instruments...

Actually, there are many documented cases on First Scams were no notice was ever received (from First USA). And there are even more documented cases where the notice came in 6 point type on the side bar of some 4-page ad for merchandise that most people would view as junk mail and habitually throw away.

As I'm sure you're aware, you can't prove a negative. I don't doubt that First USA has their share of questionable activities, let me point one thing out:

First Scams is a site devoted to people who are angry at FirstUSA for whatever reason. If you're angry enough to post your story to a web site, you probably aren't going to start off with "Although I never looked at any of the statement inserts, and I didn't read the letters that came with the convenience checks, it's still FirstUSA's fault that I didn't read the terms."

I guess I'm in a small group of people. When I see mail from any institution I hold an account with, I open and read it. FirstUSA doesn't normally sell leatherette address books, so that's probably not the primary reason for the letter. I'd think that the folks with the 'cards are evil' mentality would be especially vigilant when looking for dirty tricks.

Issuers of loans of any type have been successfully weighing risk at the time of the application for decades. Only recently have credit card companies started looking at credit histories every two or three months as an excuse to jack up rates. The consumer is not notified when a payment is reported late the bureaus, and has no opportunity to dispute it or provide mitigating information prior to an unfavorable change of credit terms. That is an abuse of the system. This corrects that abuse and returns the credit card industry back into the fold of common lending practice.

'Loans of any type' have fixed terms. If you buy a car with a loan, you can't go back to the dealer a month later and put another one on your account. If you default on a car loan or home loan, the bank at least gets a house or a car out of the deal. An unsecured loan is usually a fairly short term, at an appropriately higher interest rate.

The fact that card issuers are becoming more vigilant in monitoring their accounts is good news for shareholders. As trends can be identified, that means lower losses for the card issuer.

As far as being notified that they are being reported to a credit bureau, my guess is that the consumer is probably aware he hasn't made a payment in two months. It shouldn't really be a surprise...

Mitigating circumstances? Guess I'm harsh, but from a business perspective, it doesn't really matter that you had to buy new tires last month. Plus, I think you'd be pleasantly surprised if you called your card issuers and asked to be transferred to the hardship department. The issuers do tend to be flexible in a lot of cases.

I might be with you on this. I see the two-cycle calculation as an interest-rate-hiding money grab. In my attempts to stop that abuse, I don't think I've come up with the right solution. Maybe you have a better way to express it.

The two-cycle system is designed to reap interest that is not deserved. The money has been paid back -- stop charging interest on it!


I guess I really don't understand the bold portion above. On my statements, from various issuers, the interest rate shows up in about 4 different places. Sometimes in bold type. If I don't pay attention to it, I'm not sure how that becomes Visa Bank Inc's problem...

I'd also like to point out that the consumer actually comes out ahead on interest while running the balance >up< on two cycle billing. The consumer and the issuer are about equal when the balance is being maintained. The issuer comes out ahead during the pay down phase. So, over the life of the account, it's a wash. Unless the consumer maxes the card in a few months and then takes 3 years to pay it off. Which is a series of >decisions< made by the card holder.

Ask yourself, why does the credit card industry charge these fees for cash transactions? They are not more expensive. They are not more risky. The banks actually promote them by sending you those "convenience checks."

I know exactly why fees are charged. People will pay them. It's the free market in action. It's the same reason that a can of soda is 25 cents when you buy a case, but a dollar from a vending machine.

The reason is that they've looked at the average consumer and figured out that they don't read the cardmember agreement before deciding to do a cash transaction. So they promote these and deal with the surprised and disappointed customer later, usually rudely.

Sounds like you're aiming your legislation at the wrong crowd. The issuers don't have a problem reading and understanding the agreement...

And yes, if this was federal law, you can be sure that terminals would quickly and easily be programmed to support the provisions of this bill. Otherwise, they're out of the cash advance business, and that's just not a wise decision.

Although it could be done, (anything is possible with computers...) I'll maintain that it's an absurd requirement.

Yeah, cool huh! I'm amazed that you don't see this as a good thing. But you are obviously aware that the way things are now, they are designed so that many of us WILL trip over it.

I really dislike the dumbing down of the world. This is just one more symptom. "Warning: Coffee is hot." "Warning: Do not stick your hand in this blender." "Warning: This hedge trimmer is not designed for personal grooming."

Where does it end?

I think it's inconsistent to be offering low-rate, secured loans to students and at the same time encourage them to rack up credit card debt. Students smart enough to control their debt are also smart enough to go to their bank and apply for it. But these days students are signing up for cards and getting "cool shades" and t-shirts and have no means of paying back their balances. They enter the working world tens of thousands of dollars in debt, aside from the student loan they must begin repaying.

I think it's inconsistent to consider a student an adult for purposes of prosecution, military service, voting, etc. but to consider them children when it comes to making financial choices.

You can point to folks with lots of debt coming out of school. And they exist. I can point to lots of folks in their 40's with lots of credit card debt. They exist, too.

No matter what group you look at, there will be some who 'get it' and some who don't.

I'd lay pretty good odds that those students who aren't financially aware enough to seek out a credit card at their bank are still receiving mail and watching TV, too. Since we can't restrict mail delivery to students (how could you even identify them if they were living off campus?) and I'm pretty sure cutting off television service is equally impossible, all you accomplish here is removing a kiosk from a campus, which also limits an opportunity for the responsible adult students.

I'm a tax payer and it's my money being lent or being used as security for these loans. I don't want to see it paying for a $2,000 stereo charged to someone's Visa.

I don't want to see my tax money do lots of things it does...

I'd suggest that your solution here is to make student loans payable only to the school and/or bookstore, rather than to the student. This could make paying for off-campus housing a bit tricky, I suppose... Never had a student loan, so I'm not sure how they currently work...

Nothing should prohibit you from getting a new agreement, but it should clearly be a new agreement. I don't want the bank to be able to interpret some new (usually bogus) charge coming across the wire 6 month later as your prima facie evidence that you wish to reopen the account. This is the abuse we're trying to avoid.

Double check my comments - I agree that charges on a closed account should be rejected. It should take an explicit action on the part of the cardholder to reopen the account.

Credit card companies are using binding arbitration to avoid class-actions by their cardholders. You can't open a class-action binding arbitration. They know that, but cardmembers do not think about it when they first see this provision and accept it.

Lacking any other method for little Joe Consumer to face down MBNA, this gives the consumer some legal clout.


The highlighted portion above seems to summarize the root cause of a lot of credit card problems...

Good arguments, let's keep them coming and stay positive. We can disagree and still be friends.

Agreed. I'm not saying all card issuers are the consumers' best friend, either. I just take issue with the 'demons vs. victims' mentality that many people seem to hold. (Not a specific reference to this thread, either...)

Although I had my share of issues with cards when I was younger, I don't see that as a reason to treat younger adults like children and protect them from themselves. The world has sharp edges, and the quicker people learn that, the better.

If you have a better suggestion for that two-cycle preventing simple math provision, please let me have it.

Two cycle calculation really isn't any more difficult. It just doubles the length of the period used to calculate the average daily balance.

I hope this was coherent; I cut and pasted a few paragraphs out of order, and this reply window isn't large enough for me to get an overall feel of how well the cleanup worked... :)





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Author: BaritoneFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36204 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/12/2000 3:37 PM
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I hope this was coherent; I cut and pasted a few paragraphs out of order, and this reply window isn't large enough for me to get an overall feel of how well the cleanup worked... :)

These are excellent, well-thought, well-explained arguments. I know it took you a long time to type them in and do the formatting.

Please don't take the brevity of my reply as any kind of discount to the work you did and time you spent arguing your points very well.

Instead of continuing this debate, which is about two messages short of an impasse, I think what we should do is chart out the proposals with an "arguments in favor" and an "arguments in opposition" and then use the TMF Polls to pare these down to 10.

Although I disagree (I am so tempted to keep this going a few more rounds), you make good points and have made them well enough to use in an "arguments opposed" section.

Robb

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Author: bstroh Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36214 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/12/2000 4:56 PM
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Instead of continuing this debate, which is about two messages short of an impasse, I think what we should do is chart out the proposals with an "arguments in favor" and an "arguments in opposition" and then use the TMF Polls to pare these down to 10.

Although I disagree (I am so tempted to keep this going a few more rounds), you make good points and have made them well enough to use in an "arguments opposed" section.


Sounds like a fair proposal to me.

My opinions are pretty much as argued here, although I do sometimes step slightly closer to 'extreme' during the discussions, in order to play devil's advocate. (I'm sure the appropriateness of that phrase, when supporting card issuers, is not lost on the demonizers... :)

I'm going to be on vacation for a week, so you won't see me around here for a while. Just didn't want you to think I'd wandered off...


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Author: MaryGold Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36262 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 10:19 AM
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I couldn't agree with you more. I'd add this one: After extending an offer for a FIXED rate of interest, no increasing the rate for at least a year. Creditors run offers with low intro rates to encourage balance transfers and after the time period increase the rate to a fixed amount. Great. I understand that. But don't turn around a couple of months later and start increasing the fixed rate. I think where credit card companies are concerned, fixed should mean fixed.

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Author: chrismohr Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36263 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 10:22 AM
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"THE CREDITOR MAY NOT BAIT AND SWITCH

The consumer has the right to keep the original credit terms. If a credit card company subsequently wants to raise interest rates, the balance under the previous rate remains under the previous rate until paid. New charges create a separate balance that is charged a higher rate. Customer payments are applied first to the minimum payment due on the higher APR balance, then to the lower APR balance.

[This seems to be all the rage. Every card issuer is abusing this and it's time to stop it.]"

A personal note first. I enjoy throwing away First USA's solicitations b/c I know that each time they've wasted postage and are that much closer to bankruptcy. I had a card and then voted with my feet, watching with glee as the press reported their slide into the toilet.

That said, I'm not exactly sure what you mean by bait and switch. If the bank offers a 0 APR for six months, and then you get kicked up to 12 or 13 points after that point, the consumer knows that they effectively have a six-month interest free loan. Extending that term would give the consumer a windfall, and that doesn't seem fair.

A rate that's tied to general interest rate hikes also seems fair as long as it's in the terms and conditions. Money is the input for credit card companies; if it gets more expensive, they should be able to pass the cost on to the consumer. The same is also true if the consumer is repeatedly (and legitimately--unlike your First USA's of the world) late with their payment. That imposes a greater risk on the lender, one for which they should be allowed to charge.

So I guess my question is what you mean by abuse?

Great post by the way.

Cheers.

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Author: bshiels Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36265 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 10:28 AM
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Excellent Ideas...

Now for a rule the credit card companies should mandate to the merchants:

(Rule Number 11)

Recurring billings (without a specific authorization by the consumer each time) must be restricted to some rules such as:

* No automatic "renewals"
* Anything that will be paid off in for example 10 payments of 49.95 must be noted (as a memo) on the first statement.
* Do not allow any recurring intervals other than monthly.
* Anything that is "FREE" or "WITHOUT OBLIGATION" (but really costs money after 30 days), must rely on a specific customer authorization at the end of the 30 days before anything is charged.


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Author: whitemiata Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36268 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:07 AM
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I have one too:
================================
FULL FINANCIAL DISCLOSURE

Monthly Statements with a minimum payment must clearly state:

1) How long it will take to repay the debt assuming no more spending on the account

2) What the total payment will be once you've repaid the account using minimum payments

3) What percetage (and amount) of your minimum payment is going to interest vs. principal.

================================

Also to add to the previous post (about recurring billings) I would like to add this provision:

Any agreement that may be entered into over the phone must be exitable out of over the phone (if you didn't need my signature to sign up for the disability then you don't need my signature to opt out of it).

Alessandro
One week, five days, 3 hours, 57 minutes and 33 seconds. 304 cigarettes not smoked, saving $48.66. Life saved: 1 day, 1 hour, 20 minutes.


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Author: JoLizzy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36270 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:18 AM
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"No fees for cash or cash-like transactions are permitted unless individually acknowledged electronically or in writing at the time of the cash advance."

This is awesome! I've noticed time and time again that "special offers" on convenience checks come with some deeply buried finance charges or transaction fees...whenever tempted to use one of those checks, I call the company to find out what the actual terms are.

Not long ago I was planning to use one of these with a "special rate" to pay for a large purchase...when suddenly, buried deep in the terms in 6 point type, I found the transaction fee of $50 or 3%, whichever was greater.

So, for convenience checks at least, the applicable finance charges AND transaction fees need to be stated IN THE BODY OF THE OFFER LETTER!!! Not in some footnote or within 2000 words of type.

As for giving credit to students...NONSENSE! Credit should be available to anyone who has income (student loans and the like do not count). If anyone who does not have income wants a credit card, then they must produce a cosignor (who, obviously, does have income). Credit card companies assume that parents will cover their children's debt. If the card is issued in the parents' name, this is a reasonable assumption...if the card is issued in the student's name, then the student should be required to have income to qualify in the first place.

Thanks for all these good thoughts!

Jolizzy

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Author: vickerbi Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36271 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:19 AM
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I believe it was the EVIL Furst Onion with which I ONCE had an account, that had some charge at the super low rate and a cash advance on the books. I sent in a payment for the higher interest rate cash advance and they posted payment to the lower interest rate item. I want to be able to designate where my payment goes for instances where I let the remaining balance carry over.

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Author: hayrow One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36272 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:21 AM
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I don't have an item to add to the bill of rights. I just wanted yall to know how I do try and "get back" at credit card companies.

When I get a solicitation from one of them, I tear up the application and put all of the material, the envelope, and other junk mail in the Business Reply Envelope (BRE). Then, I send it back to them.

Companies have to pay a flat fee for using a BRE, but if the return is over the registered return weight (usually 1 ounce), then the company has to pay extra for that postage. Not only does this cost them money for the postage, it also makes the company handle the return and account for the increase.

In the big fish bowl of life, I know this action is just pennies on the hundreds of dollars, but it sure makes me feel good. Also, it gets rid of some of my junk mail.

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Author: JoLizzy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36273 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:21 AM
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"Alessandro
One week, five days, 3 hours, 57 minutes and 33 seconds. 304 cigarettes not smoked, saving $48.66. Life saved: 1 day, 1 hour, 20 minutes."

Alessandro, Congratulations on quitting smoking!! You'll be a rich man in no time!

Jolizzy


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Author: nedludd Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36275 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:33 AM
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Recurring billings (without a specific authorization by the consumer each time) must be restricted to some rules such as:

* No automatic "renewals"
* Anything that will be paid off in for example 10 payments of 49.95 must be noted (as a memo) on the first statement.
* Do not allow any recurring intervals other than monthly.
* Anything that is "FREE" or "WITHOUT OBLIGATION" (but really costs money after 30 days), must rely on a specific customer authorization at the end of the 30 days before anything is charged.


A couple of points. You must authorize the company that will do the billing that they can automatically charge your credit card. I never do this, and only had a problem once. I disputed the billing, and since the billing company did not have signed authorization from me at the time of opening the account the billers were stuck. It is not the credit card issuers fault, it was the company that tried bill me without my authorization.

Second, no one is either forcing you to get a credit card or keep one. I recently cancelled one that did not provide the level of service I desired, and I average about five offers a week for new ones. I have the choice to open one or not. Most banks now offer debit cards which are accepted the same as Visa or Mastercard, so you don't need a credit card to book a hotel, etc. It is your choice to have one.

You are asking the bank to authorized you to spend their money merely on your promise to pay it back, and people then complain about the rates they are being charged. Either don't carry a balance, at which point the rate is moot, or find a lower balance. No one is making you use the things.

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Author: JoLizzy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36276 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:33 AM
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And another thing...

Late fees should be based on a percentage of the amount due, up to ($20? $40?). I was once charged a $20 late fee AND about $20 in finance charges on a $7.95 bill. The company was kind enough to credit my account (after I called and screamed at them), but that I should have been charged 5x the amount due is absurd.

Thanks,

Jolizzy

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Author: Mycroft2000 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36277 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:44 AM
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Simply Outstanding ideas! You got my vote.

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Author: richardpor Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36278 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:57 AM
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First of all I get very nervous every time somebody want to create his or her own "Bill of Rights". Government is way too large and intrusive as it is.
Your first two points make sense because it is the role of government to protect its citizens from force and fraud. I totally disagree with the rest. As for late fees, I do not believe government should get involved when it involves personal folly. Nobody forced a person to get a credit card. One should cancel their credit account if they cannot be responsible enough to make payment on time.
As for the rest, government should not interfere with privet business unless force or fraud is found. The credit business has every right to dictate policy concerning approval, rates, fees and credit limits. If you do not like it, don't use their credit card.

There should be only one bill of rights. It is the one attached to our constitution.


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Author: voda Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36279 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 11:58 AM
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How about reviving the usury laws that were in effect until the early 70s?

Allowing 18, 19, 20 percent interest is a practically a guaranteed way of indebting consumsers PERMANENTLY to the game playing card companies.

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Author: pzalvo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36281 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:08 PM
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Because of their very high profitablity, credit card companies should be obligated to help those who make a good faith effort to pay. If a person, or part of a couple loses a source of income CC companies usually use that a means to start piling on fees for late and overlimit as well as jacking the rate.

If a person demonstrates temporary hardship and makes a good faith effort to pay the company should be disallowed from piling on fee after fee. Interest rates should be lowered or suspended for a fixed time, late fees should be suspended and overlimit fees should be limited to 10% of the customer's payment.

The Credit Card company's dream client is one who tries to pay but can't. This is especially true for people who are newly unemployed, newly employed or disabled.


Here's another one:

Because the nature of this business is predatory, credit card companies should be made to pay a % of their earnings to a watchdog/lobby group for credit card customers. This fund will pay for an arbitration organization, and lawyers who represent customers in artbitration hearings and other dispute resolution. The group will also enforce accountability on the part of the CC Co's, who have run roughshod over the public for decades.

If the company loses a case and doesn't settle the matter within 45 days, the customer is rebated partial interest, say, $29/mo.:)











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Author: luke007 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36282 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:12 PM
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Bad, bad, bad idea. Instead of making these laws that credit cards have to follow, it would be a much better idea to continue the way things are (ie- if their service is crappy, take your business elsewhere). Like most attempts to regulate, this one is well intentioned but would cost more overall to implement than it would save. And as for those people too ignorant to realize when they're being had, I refuse to pay for their ignorance. They're the reason I can pay off my credit card monthly and not pay any interest if I pay in full. Ignorance has a cost, and I'm not willing to pay for someone else's. I am certainly ignorant in areas other than finance and I'm sure I pay for it. Why should credit cards be any different?

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Author: ajhorne Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36284 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:14 PM
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To the above, I would add that credit card companies are required to credit your account in the same period for returns / refunds etc. as the transaction is made. It is very unfair that credits take 2 -3 months to appear on your account when debits appear automatically - - especially for airline tickets.

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Author: blackmare Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36286 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:18 PM
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I'm enjoying this thread and the debate.

I agree that "fixed rates" should be fixed but only for a specified time period (and I don't think anyone here meant to say this should apply to "introductory offers" which are exactly that). It's unreasonable to expect card companies to keep a rate down indefinitely when interest rates are rising and their OWN loan has a fixed repayment schedule. It's also unfair to promise a fixed rate and then decide to raise it a month or two later. One may argue that consumers can then vote with their feet, and get another card, and I agree, but if they must do so too often I understand it will damage their credit rating.

I also agree that notice of any changes should be sent in a well-marked envelope. I am not stupid; I read my mail. But I once had a Household Visa and, if they ever notified me of their intent to raise my rate to 24%, they must have buried it in with the reams of ads for insurance, magazines, clock radios etc. that they sent me every week. I never saw it. I had a responsible roomie whose card company lowered her limit so that they could charge overlimit fees, and if she received any notice of this important, and expensive, change, it was done in the same manner. I agree that the world has already been dumbed-down enough; I know that the coffee is hot. However, I don't think that consumers should be required to read through pages of subscription pitches, sweepstakes rules, and other advertising material in the hopes of catching whatever tiny notice might or might not be hidden in the junk.

Having said that, please note that I now have a Visa with Fidelity National Bank, and they don't do this sort of thing. Neither did my previous company, before Household bought them out. I don't think most lenders abuse their customers, or are evil. Most of the time, consumers dig their own hole. But I would like to see a few more safeguards against really unfair, misleading and predatory practices.

One thing that I believe ought to be illegal, is the sending out of "live checks." These are an instant loan: just sign, deposit or cash it, and your account is opened. I got one in the mail just before last Christmas. Amount: $3000. Interest: 24.99%. The materials they sent with it, were very obviously aimed at seducing low-income, uneducated people who wanted some extra holiday money and would not understand what they were actually getting into. I know that everyone is responsible for the choices they make, but some practices are just plain wrong and I believe this is one of them.

As for college campus solicitation, I dislike it but think legislation is not really a good answer. Education (perhaps offering free, voluntary "financial orientation" sessions?) is a better response. It would help solve the root problem of financial ignorance.

That's all for now. I'll be following this with interest.

Tracie



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Author: pzalvo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36287 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:18 PM
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Not only is this person sarcastic, but shows an obvious disregard or lack of knowledge of how the real world works.

Circumstance, as well as choice, play a large role in how cards are used. People sometimes find themselves in need of money, and use the cards for survival rather than trips to the Bahamas.

As far as your formula for caluculating payments...I tried your formula on both of my credit accounts. The first one was off by $32, the second was off by a whopping $104, (which by the way fell in favor of the company). This on accounts that have relatively low balances.

Your input is constructive, but your sarcastic, infantile demeanor decimates what is potentially helpful.





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Author: speisert Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36288 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:19 PM
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I would like to add another one.

"When the customer has signed a form to debit their balance in full from their checking account, the credit card company must honor that agreement and withdraw the full amount, instead of withdrawing only a partial amount and charging interest for the amount that they didn't withdraw."

(Hi, First USA!)

Sean

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Author: johnnstace Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36289 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:20 PM
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As for the rest, government should not interfere with privet business unless force or fraud is found. The credit business has every right to dictate policy concerning approval, rates, fees and credit limits. If you do not like it, don't use their credit card.

There should be only one bill of rights. It is the one attached to our constitution


I completely agree. I have read this whole thread and it sounds like more government to protect the stupid and lazy.

Credit cards are a quick loan. Unsecured and risky to the lender. No one is forcing anyone into using them or maintaning a balance. It is a personal choice. The last thing we need is the goverment to tell us and the companies what they can and can't do.

The one statement about students not being able to get a card without income is absured. These are adults. They can vote, they can die in a war even though they do not want to be there. They can drive a 2 ton piece of steel at velocities at 117 feet/second without questioning their ability to pay for gas. Why can't they be responsable to owe someone money?

There is a a saying that goes something like freedom is a very dangerous thing to those who like to be controlled.

Like bstroh and others I read my mail and learn about the contracts I have engaged in or are about to engage in and make my decisions based upon this. If I make a bad one I do not expect anyone to help me out of it and I expect others to be the same way.


john

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Author: usa777 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36290 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:30 PM
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Hi Robb,

I'm 100% in agreement with you. I have one other suggestion which goes a little farther than your "Simpler Math" - how about only charging interest on what the customer actually owes, rather than on the entire amount, even in one billing cycle? One time (the first and last time I did this!) I couldn't quite pay all of my credit balance and, because of their method of calculating interest, was charged $65 on only $300 that I owed for only 3 weeks! This is usury. It should be illegal to use the "average daily balance" method to charge someone interest on what they don't even owe! We need to complain, and complain loudly about this. Of course, being a Fool, I never charge more than I can pay off without being charged interest. But, I certainly don't like to be cheated as I was on that occasion when I messed up!

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Author: SCotton Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36293 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:43 PM
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I think this is a great idea. Maybe we can put the Justice Department on them and effectively run them out of business. Personal responsibility is not the answer. Let's put more regulation in place. Maybe we can even start a new government agency for over-site, perfect job for Mr. Clinton after he leaves office. I'm positive we can trust him. Better yet, let's just do away with credit cards. Nobody needs them anyway.
Firmly tongue in cheek!!Puhleeze!

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Author: anothersojourner Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36294 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:47 PM
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NO MORE LATE FEE GAMES

Timliness in payment in determining late fees or account delinquencies are calculated by the date of the postmark or electronic funds transmission, not on when the bank received the funds. Any ambiguity due to a missing or illegible postmark will be decided in favor of the consumer. If the funds transfer is not subsequently honored by the customer's bank, then a late fee may apply.


This is the one which I like the most. There use to be a five day grace period from the stated due date on the bill, which i always perceived to be for postage delivery time. But now the trend seems to be that the postmark carries no validity even if it indicates a few days prior the date due, but arrived a day late or took a day to process after arriving the day due. Anyways, since the postmark carries contractual law implications, the least it can do is be an advocate for the consumer and represent timeliness honored.

I also like the one about no soliciting on campuses especially high schoolers and college students with no income.

And I think that our persoanl/credit information shall be held private.(PERIOD) Not if we as consumers take the initiative to write (not even able to call in this request, but required to write in) in a request to not share our personal/credit information for profit. It should be up to the credit card company's initiative to request from us that right to share our information and only after permission HAS BEEN RECEIVED are they allowed to share such info. As it is now (from my understanding) they have the right until told not to, which in my opinion has the law in their favor.

BUT, i'm curious how this becomes the primary focus for the Fools that we are. Yes, I believe these to be valid concerns to be addressed at the Credit Card Industry, but they can be easily side-stepped by not being a victim to the credit card industry. Simply control your cards instead of them controling you. Realize the money charged on any card is, until you pay it off, money you don't have. And as a result causes you to borrow from your future. Therefore, have balances that are easily managed with your income. Balances that can be paid off in full. If there is from time to time items too expensive and you choose to purchase them by credit card by choice or circumstance (internet) then be sure to pay them off in a timely manner before additional purchases are compounded on top of the large purchase. 'Timely manner' obviously varies, but i would state it as a period in which interest accrued doesn't override the value of the item and especially doesn't degrade your financial stability.

Even though I have opinions with the due date issues and wish that regulations would be more on the side of consumers; I also recognize that there is still sufficient time to pay at least the minimum due by the due date. So if payment depends on coinciding with a paycheck cycle simply call the creditor and they receptably change the billing cycle per request and while you have them on the phone request a lower interest rate.

Anyways, I've rambled enough I hope haven't stepped on anyone's toes concerning beating the creditors on their home court advantage. Remember they're in the business to make money. Make it your business to keep your money from them. The better we become as consumers at doing just this the more it will become in their favor to meet our requests/needs.

Fool On!



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Author: kultrek Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36295 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:48 PM
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Robb --

I absolutely agree. I'm cancelling my credit card from First USA Bank for just the reasons you describe --

a) $29 late fee for my last bill
b) increased APR

I suggest more people cancel their cards. The only language the credit card companies understand is that one.

kultrek

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Author: nospam4me Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36298 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:02 PM
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When I get a solicitation from one of them, I tear up the application and put all of the material, the envelope, and other junk mail in the Business Reply Envelope (BRE). Then, I send it back to them.


EXCELLENT!!

<OT rant> i do this to all my junk-mail purveyors, signing the postage-paid return cards "Nomore Junkmail" and stuffing unrelated junkmail into return envelopes. Why should i pay city taxes to have the trash hauled to an ever-expanding dump? Let the creators of the trash figure out what to do with it. </OT rant>

cassandra

/**/

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Author: anothersojourner Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36300 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:06 PM
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I don't have an item to add to the bill of rights. I just wanted yall to know how I do try and "get back" at credit card companies.

When I get a solicitation from one of them, I tear up the application and put all of the material, the envelope, and other junk mail in the Business Reply Envelope (BRE). Then, I send it back to them.

Companies have to pay a flat fee for using a BRE, but if the return is over the registered return weight (usually 1 ounce), then the company has to pay extra for that postage. Not only does this cost them money for the postage, it also makes the company handle the return and account for the increase.

In the big fish bowl of life, I know this action is just pennies on the hundreds of dollars, but it sure makes me feel good. Also, it gets rid of some of my junk mail.


I abolsolutely love this idea and shall share it with anyone that I hear complain about those mailings. Thanks for the idea, I too will join in on that fun. Cheap humor, it's great.

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Author: JoLizzy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36301 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:07 PM
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Take a pill! Most of this is just venting (I think)...not a suggestion that the government should take over...any more than they already have.

I think the main points are that credit card companies should be required to disclose pertinent information in a clear, concise, and timely manner...and, since they're recruiting high school debtors now, in language that an average high school student can understand.

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Author: yarahall One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36304 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:21 PM
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NO SOLICITITING TO STUDENTS
A credit card issuer may not market or solicit its business to students under the age of majority, nor shall it market or solicit at student campuses or to student bodies where students are benefiting from government provided or guaranteed student loans.


what i'd rather see is an education program sponsored by the credit card companies where students are required to attend classes on basic personal finance and how credit works before they are allowed to get the card. Minors under the age 18 should be required to have a parental consent signature on the credit application and also attend the credit class with their child. Failure to attend the class means application denied.

-yara

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Author: Willmac Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36306 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:38 PM
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Yes on all except for the following...

NO REAPPROVAL REQUIRED

I would allow them to change after 6 or 12 months

DON'T HIDE MY CREDIT WORTHINESS

I think you need to deal with the credit bureau for this not the credit cards. I think everyone operates on the principal that no negative news for an account is good news. I'm fine with that.

FEES FOR CASH TRANSACTIONS

Any fees should spelled out in bold faced type, at least 12 point, both on the letter and the Check.
(I got hit with one of these fees and I watch for them)

ALL COMPLAINTS SERIAL NUMBERED

and tracked for at least 4 years after you are no longer a card holder...Yes, YesYesYesYesYesYesYes

additionally...
Capital One...I got hit for a late fee--I had sent in two seperate payments (for the same bill, one the minimum and the second to pay the balance off). One I sent 20 days before it was due (an on-line payment from my bank) and the next 14 days before it was due (a balance transfer from another card, and yes I confirmed that it was actually sent 14 days before it was due) and Capital One cashed them both the day after they were due. It took me 2 months to get a credit, 3 phone calls and a letter(a person on the phone could not authorize such a credit). I no longer have their card.

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Author: sam322 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36307 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:42 PM
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PLEASE DO NOT TAKE AWAY ALL OF MY RIGHTS

FYI: I am a high school junior with a Dell Platinum Visa through First USA. I have NEVER paid an annual fee, interest charges, or other charges. I feel FirstUSA's fee and interest structures to be incrediblely simple and anyone who cannot understand them should be embarrassed to admit to their own incompetence.
So far I have racked up more than $150.00 in Dell points toward Dell equipment using my card. I find FirstUSA policies to be nothing but above board and very honorable. I have never had a problem with them and find them to be very polite and straight forward. Any changes to my contract with them are promptly detailed in a legal notice which is not near as complicated as you make it out to be. You request MORE government regulation, to "protect" consumers from their own lack of self-control, I have a major problem with this. If people can not understand their contractual obligations, they have no business having or using a credit card.

For my sake, my Atlas soon Shrug

Sams

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Author: sdb2000 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36308 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:46 PM
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At Least 10% of the Minimum Payment must be Applied to the Outstanding Balance

I think on average CCCs only apply about 1.5%-2% of the minimum payment to the credit card balance. That amount is ridiculous.

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Author: wisetd Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36309 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 1:50 PM
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I receive Credit Card solicitations and cash advance checks nearly daily from a variety of Credit Card companies. Never have I been lulled into accepting the generally unfavorable credit terms being peddled. While I would agree that some of the practices used by some Credit Card companies to generate revenues rely on the inattentiveness, complacency, and ignorance of customers, I would not advocate the increase of Government legislation or regulation to rectify this. I WOULD advocate that people vote with their feet and cancel their credit cards from companies that offer unacceptable terms.

The costs that we all pay when the Government gets involved in something (paying the salaries of high- payed federal employees and legislators to craft, execute, and ensure compliance with legislation and regulation, plus the cost to all Credit Card companies to comply with Government regulation and legislation) should make Government regulation the last resort.
All that is needed to avoid being taken advantage of by Credit Card companies (or anybody else for that matter) is good old-fashioned common-sense, reasonable diligence, and personal responsibility.

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Author: luke007 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36311 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:04 PM
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Sams said:

PLEASE DO NOT TAKE AWAY ALL OF MY RIGHTS

FYI: I am a high school junior with a Dell Platinum Visa through First USA. I have NEVER paid an annual fee, interest charges, or other charges. I feel FirstUSA's fee and interest structures to be incrediblely simple and anyone who cannot understand them should be embarrassed to admit to their own incompetence.


I'm in the same boat as this guy. I've had a credit card since high school or early college and have never paid interest on a purchase. It's merely a convenience. When I was living more check to check than I am now, I stopped using my credit card because it was difficult to keep track of the size of the bill coming at the end of the month and, therefore, difficult to tell how much money I had to work with during that month. That's called financial responsibility and I take full credit for it, just as I would demand to be held accountable if I had been irresponsible.

Sams also said:

So far I have racked up more than $150.00 in Dell points toward Dell equipment using my card. I find FirstUSA policies to be nothing but above board and very honorable. I have never had a problem with them and find them to be very polite and straight forward. Any changes to my contract with them are promptly detailed in a legal notice which is not near as complicated as you make it out to be.


This high school sophomore seems able to grasp the 'complicated' language of credit card contracts. I find it laughable to think that college students are in over their heads because the credit card companies are blinding their judgement by giving away free T-shirts. May I suggest that if you're so out of control that you can't handle a credit card, you are also wasting your money by being at an institute of higher learning?

Sams added:

You request MORE government regulation, to "protect" consumers from their own lack of self-control, I have a major problem with this. If people can not understand their contractual obligations, they have no business having or using a credit card.


This guy's comments are far more lucid than most of the rest in this string. Furthermore, his ability to behave responsibly and avoid unwanted costs in the use of his credit card would be put in jeopardy by instituting the myriad regulations that have been suggested here. Regulations are not implemented and enforced for free. You will pay for them through taxes, annual credit card fees, or by driving the credit card business away entirely, which would be a shame for myself and this fellow, for whom credit cards are nothing more than a very cheap convenience.


-Luke

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Author: bstroh Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36312 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:14 PM
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My vacation doesn't start until (too) early tomorrow morning, and I had to address this...

Because of their very high profitablity, credit card companies should be obligated to help those who make a good faith effort to pay. If a person, or part of a couple loses a source of income CC companies usually use that a means to start piling on fees for late and overlimit as well as jacking the rate.

"Because of their high profitability, Coca Cola should be obligated to give free soda to anyone who asks."

The CC companies 'pile on' fees for late payments and going over the credit limit as a result of consumers making late payments or going over their pre-assigned credit limit. Income has nothing to do with it.

Because the nature of this business is predatory, credit card companies should be made to pay a % of their earnings to a watchdog/lobby group for credit card customers. This fund will pay for an arbitration organization, and lawyers who represent customers in artbitration hearings and other dispute resolution. The group will also enforce accountability on the part of the CC Co's, who have run roughshod over the public for decades.

Predatory? Please. Consumers have one option available to them that the gazelles don't - the gazelle can't cancel the lion. Or refuse to apply for the lion. Or responsibly use the lion. Or refuse to carry a balance on the lion.

Run roughshod? Whatever. I've paid my share of interest and fees over the years, and you know what? In each case, it was my own damn fault. I knew the terms up front. I mailed a payment late. I jumped over my credit limit. Etc. I wasn't happy about it, but I wasn't some innocent victim, either.

It's interesting how no one has an issue with credit cards when they're getting a stereo system for as little as one signature. Once you've got the stereo, you're a victim when you're expected to pay for it...

Having said all that, I get the feeling you don't know a whole lot about how credit card companies work. Make a few calls to the issuers of your cards. When you're speaking to customer service, tell them you're in financial straights, and ask about hardship programs. They already exist at many card issuers, voluntarily.

Ever heard of CCCS? Consumer Credit Counseling Services. This organization is funded by the credit card issuers, and exists to help people get their credit card debt under control. They do this by cancelling fees, and lowering interest rates for a specified time. Again, voluntary on the part of the card issuers.

Like any other debt situation, you'll get a lot further if you're honest up front; don't wait until you're six months late making payments, and then expect VisaBank, Inc. to be your best friend. Communication is critical, as soon as you identify the problem.



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Author: nospam4me Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36313 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:17 PM
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Excellent thread, and great work so far.

Now, for my serious (and LONG) suggestions:

===========================================
I:
the CREDITOR RESPONSIBILITY CLAUSES

a> Purveyors of unsolicited credit cards to uncreditworthy individuals (including individuals who have already accumulated credit cards and CC debt) shall be the last in line (behind CCs and other unsecured debt solicited by a consumer) at bankruptcy.

Rationale: Financial institutions that attempt to make unsecured loans to people ought to do "due diligence" on the loans they are offering: the lender has an obligation to itself and its stakeholders (shareholders, depositors, federal insurers) to make sure any loans made will be repaid. Failure by the CC purveyor(s) to perform this "due diligence" ought not to harm any other entity than the lazy financial institution(s) and its/their stockholders.


b> Purveyors of unsolicited credit cards to entities already in bankruptcy or which have been in bankruptcy in the past 7 years (and are thus ineligible for bankruptcy) shall be subject to Chapter 69 (so to speak) bankruptcy, equivalent to Chapters 7 and 13 (at judge's/independent arbitrator's discretion) but having no time limit on the frequency of declaration.

Rationale:
i> Due diligence (see a>)
ii> Enticing a person with a proven record of financial failure (even if the failure was for good reason) to accumulate unsecured debt is (small-f) foolish. Thus, the "due diligence" hurdle must be higher. The lender, rather than the bankrupt entity (individual or corporation, and whatever governmental or charitable support network eventually gets stuck with the bill) needs to pay the price of its foolishness. Why give a foolish CC issuer a free ride after it makes a predictable blunder?

Yes, i know this will deny CCs to those with a history of bankruptcy -- even those whose bankruptcy was caused by legitimate catastrophes (medical, uninsurable losses, disability, ...). Such is the unfairness of life. This provision will not stop a CC company from carefully evauating an individual's new status (disabled, with 1/3 of his/her previous income, or whatever) and issuing a CC with rational limits: ie, due diligence by the lender. Bankrupt entities should be considered greater risks, not lesser risks simply because they cannot declare bankruptcy again for several years and can't easily weasel out of loans that never should have been made in the first place.


These proposals are in marked contrast to the "tightening up" of bankruptcy laws proposed by the banking (CC) industry in response to the waves of bankruptcy arguably caused by the deluge of credit card offers to people of low creditworthiness and minimal financial sophistication.


==============================================
II:
the TRULY INDEPENDENT ARBITRATORS REQUIREMENT

a:> Arbitration under the terms of a CC agreement will be done by a board with consumer representation and with no ties to the CC or banking industry, or by a Federal/State arbitrator with no ties to the CC/banking industry.

Rationale: Arbitration is much better than protracted, lawyer-infe$ted court proceedings for settling disputes. The arbitration committee or arbitrator must be neutral and must also be perceived as neutral for arbitration to work. NB: Brokerage industry.


b:> Binding arbitration agreements will require a separate signature line from the remainder of the application (ie, a separate contract).

Rationale: If a binding arbitration agreement must be signed separately:
i> The consumer could not argue s/he didn't know about the arbitration requirement.
ii> The consumer could refuse binding arbitration and let the CC company decide whether to offer the card without it.

Stone two birds with one extra signature line.


... and finally, the minor gripe

THE ZERO-DIVIDEND STOCK EXCEPTION
to the income requirement for CC issuance. A CC could rationally be issued to an investor who bought 100 shares of MSFT at the IPO, and diversified half his/her portfolio into AOL in the mid-90s. Primary residences, however, should NOT be considered assets to back a CC (try a mortgage or a reverse-mortgage).
Ability to repay ought to be the cornerstone of any loan agreement, and a retired old (or young) goat with a handsome portfolio is a good credit risk.


Time to shut up and see if anybody else came up with these bloviations while i was typing.

Take a pill!
{glUrk} Thanks, i needed tha...

cassandra
/**/

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Author: bstroh Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36315 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:29 PM
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Not only is this person sarcastic, but shows an obvious disregard or lack of knowledge of how the real world works.

Interesting perspective. My assumption is that you're replying to my comments, anyway.

Circumstance, as well as choice, play a large role in how cards are used. People sometimes find themselves in need of money, and use the cards for survival rather than trips to the Bahamas.

Using the cards to survive is also a choice. Humanity did survive before the creation of credit cards. I don't recall ever saying that every credit card transaction was on a luxury or unnecessary item.

Part of being financially responsible is to be aware of the choices you're making, and their consequences. If you're $100 short every month, and you continue to charge it, you're going to be really short at the end of the year.

As far as your formula for caluculating payments...I tried your formula on both of my credit accounts. The first one was off by $32, the second was off by a whopping $104, (which by the way fell in favor of the company). This on accounts that have relatively low balances.

Perhaps you skipped over the note following the equation -

Average Balance may be calculated slightly
differently depending on normal or two-cycle
calculation, but it's still just an average.

There are slight modifications to this for daily
accrual, but the point remains - this isn't
differential calculus...

Daily accrual is going to produce a higher number than monthly accrual. If your account is using two cycle average daily balance and you're in the middle of paying it down, it will produce a higher number than the result above. Did you calculate the average daily balance, or just use the bottom line of your last statement? There are a lot of variables, depending on your account.

Your input is constructive, but your sarcastic, infantile demeanor decimates what is potentially helpful.

Thanks.



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Author: Norm101 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36316 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:35 PM
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As a current Grad student and recent undergrad, I think the credit card companies should not be able to take advantage of the foolish (small f)students that arrive at college and are bombarded with Pre-pre-approved credit card applications.
Many of my friends have ruined their credit and run up a hefty amount of debt, all from the lure of the snake-oil salesmen and their pitches of "free T-shirts", "it will only take about five minutes to do" and about twenty years to undo. This happens at every campus across America.

Henceforth,
All credit card companies must be required to issue information regarding the dangers of credit cards, before soliciting to young or foolish people.

Norm101

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Author: whyohwhyoh Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36317 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:49 PM
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It is incredible to see so many people discussing new regulation for credit card companies. My thoughts are with nedlud, richardpor, luke007 and johnnstace...

If you don't like credit cards, don't use them!

As mentioned earlier you can get a visa check card nowadays from banks, so you don't need credit cards anymore.

One thing I would recommend is teaching personal finance in our high schools. Granted it might take a couple of days to go through the details of how credit cards work, but this type of pratical training is necessary, especially as you peruse this board and see so many people who don't fully understand all the "tactics" credit card companies use.

I, as many of you, receive about 5 application a week. When I got my most recent credit card, I carefully read through about 3 months of them, until I found one I thought I would like.

Nowadays, with the internet, I would recommend using a forum like this one to discuss which CC's are better than others. Then use this information to find one that suits your needs.

Fraud is one thing, but trying to regulate the entire CC industry into the perfect Credit Card would be difficult, and as most regulation, not worthwhile. Especially nowadays with the internet you can research just about anything before you plunk your money down.

And trying to protect the naive with regulation only takes freedom away from others.

Regulation would get rid of the 3.9% interest rates for 6 months (since these are only profitable if they bait and switch a few customers). I like those for when I need to make a purchase and know I can pay it off in a couple of months.

Also, before using one of those low interest checks, make sure your credit card balance is zero and don't use that credit card for other purchases. If you read the details on credit cards, it's all there.

Too much rambling by me.....

whyohwhyoh





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Author: luke007 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36318 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:50 PM
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As a current Grad student and recent undergrad, I think the credit card companies should not be able to take advantage of the foolish (small f)students that arrive at college and are bombarded with Pre-pre-approved credit card applications.
Many of my friends have ruined their credit and run up a hefty amount of debt, all from the lure of the snake-oil salesmen and their pitches of "free T-shirts", "it will only take about five minutes to do" and about twenty years to undo. This happens at every campus across America.


To quote myself from earlier in this thread:
'I find it laughable to think that college students are in over their heads because the credit card companies are blinding their judgement by giving away free T-shirts. May I suggest that if you're so out of control that you can't handle a credit card, you are also wasting your money by being at an institute of higher learning?'

Norm, read sam322's post further up. He just finished his sophomore year of high school.

Henceforth,
All credit card companies must be required to issue information regarding the dangers of credit cards, before soliciting to young or foolish people.


I hate to have to put it this way, but your friends aren't my friends. As a taxpayer and a credit card holder, I don't want to pay for regulation of the credit card industry to protect your friends. Come to think of it, I don't want to pay for it to protect my friends either.

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Author: blackmare Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36319 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:51 PM
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Hi again.

The more I consider it, the more I am in favor of Fools like ourselves supporting EDUCATION rather than legislation. It's cheaper, and probably a lot more effective.

Perhaps the discussion needs to shift from, "What legislation do we need?" to, "How can we help educate people so that legislation isn't necessary?" Can we, as Fools in our own little communities, get together and try starting local adult-ed classes or something? Can we encourage our school boards to offer courses or events focusing on responsible use of money? Are we willing to help?

I do think that a few carefully selected rules ARE in order. I still like the requirement of clearly marked notice of any changes to an account. I still think "live checks" should not be legal, because they provide such an easy opportunity for fraud if the wrong person gets their hands on the check...and because they are an extremely irresponsible extension of credit, and such things hurt a lot more people than just the debtors.

For the most part, though, what we need are more people who understand how credit works and the consequences of misusing it. Then we're getting to the disease (ignorance) rather than the symptom (gullibility and subsequent debt).

Any suggestions on how to do it?

Tracie

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Author: xcollectr Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36320 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 2:54 PM
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I agree with ALL of the above. How about adding this one . . .

When adding the finance charges or late fees causes you to be over your credit limit, the over limit fee does not apply. Talk about a vicious cycle!

And I want to know whatever happened to usury laws.

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Author: luke007 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36325 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 3:43 PM
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Consumers have one option available to them that the gazelles don't - the gazelle can't cancel the lion. Or refuse to apply for the lion. Or responsibly use the lion. Or refuse to carry a balance on the lion.

I love this.


-Luke

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Author: Maaty Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36334 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 4:42 PM
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Excellent question! Whatever DID happen to usury laws?

After filing for bankruptcy in 1994, (bad attoreny advice I owed less than $20K, most of which was a car note).

After living off cash for 2 years, I was in need of a vehicle. I walked into a buy here, pay here dealerships (aka loan sharks). Yes, they would get me financing, no, the bankruptcy and my credit weren't problems. The vehicle I chose with 60,000 was priced at about $11,000. Upon delivery, I nearly had to be revived from "payment shock". The terms -- 30 months at 29%! The payments -- $645 per month! The out -- forfeiting my $1,500 deposit! With heart pounding, legs wobbling and forehead sweating, I vowed never again getting screwed. Giving away $1,500 of my dollars was not an option. I had the (loan shark) uh, financing person take off all the extra "insurances" and the payment went down to $508 per month. Still hefty -- I drove out of there in tears. Never again will I sign and understand. Buyer be ware, credit card and finance companies will NEVER give you anything -- the consumer must be educated -- SO ALL OF YOU WHO WANT LEGISLATION SHOULD RETHINK THIS OPTION -- haven't many of your rights been taken away already -- Look at whats happending with Miranda. DO FOR SELF. Credit Card companies are not your friend.

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Author: nedludd Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36335 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 4:47 PM
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I keep reading for a return of usury laws, and I think that those calling for it may want to think that wish through. Every bank has a certain number of charge offs every year, and they would even if they only issued to those with spotless credit history. These charge offs must be paid for, and they are paid for by the interest received from the rest of us. If you are going to cap the interest that they can charge with usury laws, then you will have lenders much less willing to risk capital on someone without a long, clean credit history. If they loan it to someone who defaults, it represents a larger portion of that now limited income. Remember, you are asking them to loan you money on your signature, you are putting up nothing, other than your word, as collateral.

If you return to usury laws, you will have a reduction in the spending of America, because credit will be that much tighter. Look at what the Fed tries to do with increasing rates, make money more expensive to use. Now, if you have 50% of people currently with cards suddenly unable to get credit, because they are too high a risk for the small amount of interest that they would pay, how do you think that will effect the economy?

If you want to limit the amount of interest you pay, don't carry a balance. I use my cards as swing loans. I don't charge anything I don't absolutely need if I can't pay it in full. In the mean time, I have my money in the bank earning me interest while I also have the new stereo. Control what you spend and you will not have to carry a balance. If you carry no balance, interest rate is of no concern.

I just cancelled a credit card. They announced that they were going to up my rate. While I don't carry a balance, I saw no reason to risk paying a higher rate if I decided to, therefore I cancelled the card and got a new one at 9.9% instead of the increased to 10.9% rate.

Remember, you are an unsubsidized loan to the card company. Like all loans the highter the risk, the greater the cost of capital.

If you don't like the card, don't use it. No law saying that you have to have one, or that you have to max it out.

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Author: Toto2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36343 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 5:35 PM
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There should be only one bill of rights. It is the one attached to our constitution.

That's right! The one with all the ammendments!

mike

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Author: luke007 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36345 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 5:38 PM
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Credit Card companies are not your friend.

No, they are not. Nor should they be. I don't have a credit card so I can befriend the folks at Visa. I have it because of the benefits it gives me. And Visa issues it because of the benefits they receive. That's a free market transaction for you- both parties receive something they value in return for something that they value less. You did the same, my friend, when you signed that contract. If I was loaning a large sum of money to someone who had just gone bankrupt, I'd charge some hefty interest too. But the fact is, that's the only place you could hope to get a loan in your situation- your alternative was to not have access to a car. The guy provided a service and demanded compensation. And if you didn't read the contract you signed, I don't think the moral of the story is that he's evil- I think it's that you ought to have read it.

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Author: Toto2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36349 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:07 PM
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Credit cards are a quick loan. Unsecured and risky to the lender. No one
is forcing anyone into using them or maintaning a balance. It is a personal
choice.


I know I'm flogging a dead horse here, but The Fact is, people who are in a desperate financial state are being nudged into taking on more and more debt by these *same* companies! Unsolicited Quick Fixes arrive daily in the mail, and those desparate enough to accept find themselves deeper in the hole.

And they don't know why. But, trust me...Citibank, etal. do!

While consumers need to be accountable for their actions, I think a sharp eye should also be turned on credit card companies, and their continuing decisions to extend credit to people who obviously shouldn't be getting it!

I'm glad that there are those out there who have a grasp on this. The ratio is probably 100-1 (or greater) for those who don't. And it's for them that this bugs me so much...

I've been accused of whining about credit card companies...all I'm "whining" about is their practices.

Banks know *exactly* what they're doing. They're taking advantage of the uneducated, and reaping the profits. If you're one of the fortunate few who've figured out the way to get ahead of the curve, then Salud!

But ostentatious extensions of credit to someone just starting out? Come on, Fools...even the Savviest among us has to admit that they wouldn't run a business that way...

mike



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Author: kool13 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36351 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:14 PM
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In addition to the total amount due on the billing statement, report the payoff amount as of a certain date when a cash advance has been issued (maybe include the daily interest so you can calculate it yourself). The amount due on the billing statement gives the amount due as of the billing statement cutoff date. Interest charges on a cash advance continue to accrue so that if you simply pay the total amount due by the due date, you still owe about .55/day in finance charges on a $1,000 cash advance. These charges will appear on your next statement even though you paid the total amount due and think you shouldn't have any finance charges left.

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Author: epdharma Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36352 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:16 PM
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We had too many clients with limited income (under $2000 per month-hosehold) with credit card debts in excess of $25k even $50k. Granted, they are the ones that got the cards and used them but wouldn't the cc companies have some responsibility for extending such high credit limits to someone with such limited income?

I respectfully disagree with you. One of my former bosses once told me, "One doesn't make real money by being smart. One makes real money by other people being stupid." In a free market economy, businesses are free to use whatever legal means they can to earn the most money for themselves. Consumers can take as much risk as they wish. Too often, however, most consumers are too dense or too impatient to learn the facts about credit card debt. Being foolish (not to be confused with Foolish), they get themselves into trouble with creditors all too willing to make a temporary gain on their large charges. It's all a numbers game for cc companies; a few debtors will go BK, a few will be charge-offs, but most will kill themselves to keep their credit clean so that they can get those ever-increasing credit limits, frequent flier miles, and cards with no annual membership fees.

Not to take the creditors' side on this issue (being a banker myself, I do see the benefits to the creditors), but how about this addition to the Bill of Rights.

AUTOMATIC CREDIT LINE FREEZE/CANCELLATION

No credit card issuer may keep open a customer's revolving account if that account's balance is 75% or more of the credit limit for any continuous period of a year or more. If a customer's account balance is continuously at 75% or more of the credit limit for a year or more, the creditor must freeze the account for any future use until the customer has reduced the account balance to zero. If the customer's account has been so frozen on three or more separate occasions, the creditor must permanently close the account. Upon closing the account, the creditor may no longer charge interest on the remaining balance or membership fees.

Just an idea to practice a little "tough love" on those credit card users who can't manage their finances, no matter how much you restrict the creditors. At some point, we have to make some consumers aware of how foolish they are to have so much debt. Who knows? This might stave off a number of personal BKs.

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Author: epdharma Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36354 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:20 PM
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When I get a solicitation from one of them, I tear up the application and put all of the material, the envelope, and other junk mail in the Business Reply Envelope (BRE). Then, I send it back to them.

Excellent idea! I have to remember that next time I get a bothersome solicitation like a credit card application!

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Author: Toto2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36355 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:23 PM
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what i'd rather see is an education program sponsored by the credit card
companies where students are required to attend classes on basic
personal finance and how credit works before they are allowed to get the
card


This is kind of like asking the tobacco companies exactly "why" they're against underage smoking. They just say they're against it, but no one ever asks them Why.

CC companies will *never* finance classes on how to understand finance. Their profits come from the un-taught (although, Lord knows, if they ever do, I'm gonna be there, to hear their spin on it!)

mike

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Author: epdharma Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36356 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:32 PM
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what i'd rather see is an education program sponsored by the credit card companies where students are required to attend classes on basic personal finance and how credit works before they are allowed to get the card

As it has already been said, creditors will <u>never</u> spend the money it earns on stupid consumers trying to educate them how to borrow intelligently. There are plenty of consumer advocacy groups (and Fools like us) to do that. It was said earlier that those who do not wish to abide by the practices of credit card issuers need not use credit cards, especially as the creditors intend for them to be used. Get an American Express Card if you cannot bear to part with your cash. You can't get jacked on interest, the fee is fixed, and you're responsible for the entire balance every month. There's only so much one can do to mess this up (unless you intend to mess it up).


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Author: IngridB Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36360 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:43 PM
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I'd like to add one comment which is not a reply to any particular poster. Several people have mentioned that credit card companies should not target people who are, to quote one poster, "uncreditworthy" (meaning people who've filed for bankruptcy, college students, people with no or low income), insinuating that this is "predatory" behavior, and irresponsible.

But what do any of these people suggest that responsible people who have had a bankruptcy, who are young, or who have a low income should do? Live without credit? This is an acceptable choice, and I admire tremendously the people on this board who have chosen to deal with their credit problems by living without credit. I also admire people who have chosen other ways to take responsibility for their mistakes.

I firmly believe that it's my right to take away anyone's choices unless I have a damn good reason. The fact that some people are irresponsible is nowhere close to a good enough reason. Should we outlaw driving because some people are reckless and get into accidents? Should we outlaw sugar because some people get fat and unhealthy? Where do you draw the line, and what is your plan to keep others from moving it past your personal comfort level?

Others have already made this point better than I have. But to those of you who agree that there should be limits on who the credit card companies can give credit to (beyond standard laws about who can sign a contract), I have one question. Would you like it if you were placed into this category of "uncreditworthy" (however someone else chooses to define it, unless you plan to become ruler of the universe before this plan takes effect) for a past mistake, or even for something you have no control over (like your age)?

Ingrid

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Author: wisetd Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36369 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 6:56 PM
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Those little pamphlets the Credit Card companies send you when you apply for a card are a great resource for consumer education about the costs and terms associated when obtaining unsecured credit.

Credit Card companies have nothing to fear from consumer education. There will still be those that will spend beyond their means and maintain a balance at 18% APR.

You can always count on business to fulfill the demands of the market. That's why the US econonmy thrives and prospers, because individuals and organizations are free and relatively unencumbered to create and deliver products to meet those demands. Whether that demand is created because of educated enlightenment, or because of a desire to live beyond your means makes no difference to the entrepreneur out there who is trying desperately to figure out how to make a buck and live a little better off.

Debt, like death is no recommendation, but in death we don't scorn the undertaker.

-td

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Author: sam322 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36391 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 8:51 PM
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Credit Card companies are not your friend.

No, they are not. Nor should they be.

It looks like Luke007 and I have a lot in common. I do not have a card to help the company, I have a card to help myself.
If you read my previous post (#36307), you know how I feel about the issue. I got my first credit card with a $1000.00 when I was 12 for my first trip to Europe. I switched to my Dell Card from FirstUSA for better rewards last year. Credit Cards have made consumers lives easier, and this thread is what the companies get in return? If consumers are not responible enough to use a card they have no business having one. BECAUSE of the fact that we live in a semi-free country, credit cards are NOT forced down peoples throats. I personally have no interest subsidizing other consumers through government involvment.
I think my feelings are summed up well by a quote from my favorite book.


I swear by my life and my love of it that I will never live for another man's life nor expect another man to live for mine.
Francisco d'Anconia
Atlas Shrugged


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Author: bkelley Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36392 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 9:01 PM
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Interesting Project! I haven't yet participated in any 2.9% APR short-term specials - or accepted cards with $50,000 limits ( that's more than my house is worth! ), so I've avoided some of the worst problems, but I agree with the concept.

My first quick reactions:

CREDITOR MUST GIVE CLEAR NOTICE

Good idea, but goes too far. The notice you suggest printed on the billing envelope and the change of terms as a separate, labeled inclusion, should be adequate.

CREDIT LIMIT CHANGES

doesn't go far enough. You want the 30 days notice to stop using the card. If the lowered limit is below your balance, you want to be able to pay down to the new limit with normal payments without incurring overlimit fees.

DON"T HIDE MY CREDIT WORTHINESS

I like the idea of credit bureaus reporting that I manage two - or five - or twenty - cards to the issuers' satisfactions. I'm not sure I want the balances available to the public.

ITEM 10

( your list had only 9 items. )

I'm not sure what to call it. I have a mortgage, a car payment, and three cards with limits in the $5000 - $10,000 range. I use them carefully - I have a few hundred $ of sudden expenses on two of them.

Yet I am offered cards with $50,000 limits!

Maybe such offers should be actionable. . . .


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Author: petem522 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36394 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 9:55 PM
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I agree -- First USA is a horrible company, but your cure is worse than the disease -- a recipe for higher rates, tighter credit. There are plenty of good credit card companies out there -- vote with you're feet switch issuers. The market really works...it just takes a little time, and the occasional -- but real -- threat of wrong-headed legislation like the Bill of Rights you suggest...

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Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36401 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 10:42 PM
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woefulisme writes (in part):

"The Creditor Will NOT Make Agreement-in-Advance To Arbitration For Settling Future Legal Disagreements a Condition for Opening an Account or for Continuing an Existing Account"

Self-explanatory. I look forward to the day when some court declares this transparently ugly and self-serving tactic unenforceable.


I reply:

Won't happen. The Federal Arbitration Act (9 U.S.C. §§ 1-8) makes arbitration agreements virtually bulletproof. In my view, this is frequently abused in the consumer setting and the employment setting, but without Congressional action, it's not going to change. --Bob


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Author: Leviathan Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36403 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 12:24 AM
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I admire tremendously the people on this board who have chosen to deal with their credit problems by living without credit. I also admire people who have chosen other ways to take responsibility for their mistakes.

Actually, I chose to get very wealthy by living without credit. Since time is now my friend, I feel fairly confident it will happen since I (knock wood) have a lot of it left.

Leviathan

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Author: eriknelson65 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36405 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 1:00 AM
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I'll be brief.

I agree that more regulation is a bad thing.

I believe the one sure way to alleviate credit card problems is pay off the balance in full each month as soon as you receive the bill. (Being Foolish <grin>)

As much discussion as has gone on, I'm surprised no one (that I've seen, anyway) has brought up the credit insurance scam. You know; the one where a nominal percentage of your bill is charged to protect you should you lose your job. I thought this was a good idea at one time until I actually thought about it and realized that if I lost my job and the insurance paid my minimum payment for me each month, my balance would actually GROW (finance charges exceeding the minimum payment). Not a bad deal for the credit card company, though. They get to charge you extra (even if you don't carry a balance), but there is no risk to them because interest charges continue to accumulate, and the owed balance will actually increase.

I don't think anything should be done about it (see my first comment), other than making people aware of it's fallacies.

And yes, I get tired of tearing off that advertisement from my Discover Card bill envelope each month ;-)

-Erik

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Author: ForAmusementOnly Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36407 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 1:58 AM
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So many good comments. . .but some that I REALLY disagree with, no matter how good they are!

Here we go --- my first post as a Fool.

A couple of comments regarding minimum payments caught my attention:

"I'm surprised no one (that I've seen, anyway) has brought up the credit insurance scam. You know; the one where a nominal percentage of your bill is charged to protect you should you lose your job. I thought this was a good idea at one time until I actually thought about it and realized that if I lost my job and the insurance paid my minimum payment for me each month, my balance would actually GROW (finance charges exceeding the minimum payment)."

I get my share of credit card offers too, probably a half-dozen a week. I've yet to see one that has minimum payments that are lower than the monthly finance charges. Sure, it may take a dozen years (or more) to pay it off by making minimum payments every month, but if you stop charging more things onto the balance, it WILL get paid-off eventually. If you've really got a credit card with "negative amortization," wow, that's a rare beast!

Another message that got my attention:

"At Least 10% of the Minimum Payment must be Applied to the Outstanding Balance

I think on average CCCs only apply about 1.5%-2% of the minimum payment to the credit card balance. That amount is ridiculous."

No, if you make the minimum payment, they apply it to that month's finance charge first --- and whatever is left over goes against your balance. In most cases, that should be considerably MORE than 10% of your payment. Assuming a dreadfully high 18% APR, that's 1.5% a month. If your card requires a minimum payment of 2% of the balance, then three-quarters of your payment goes to the finance charge, and 25% goes against the balance. Besides, if you feel that isn't enough, the solution is easy: Pay more than the minimum!

As far as other credit card comments --- I feel that credit card companies can pitch their wares to any adult. So I have no objections to them trying to get college students to get a card. If the students get themselves into trouble, they'll learn from it. If they don't get into trouble, they'll learn from that too! Hopefully they have Foolish parents that will educate them about credit before they even get to college (that's what I'm doing for my kids).

And those pricey "convenience checks?" Most of those get torn in half and thrown away at my house. (Which reminds me, I should probably buy a shredder!) But I read the fine print on every one, and every once in awhile a freebie shows up (a "purchase check" with no up-front fees and the same grace period as a normal purchase) --- it promptly goes into an interest-earning account (the day after the new billing cycle starts) and gets paid-in-full just before the next billing cycle ends. Thanks, Capital One!

ForAmusementOnly (drat, the username Pinball was already taken!)

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Author: johnnstace Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36416 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 7:41 AM
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Yet I am offered cards with $50,000 limits!

Maybe such offers should be actionable. . . .


I have a card with a $50k limit, actually 2 of them and they do have some value.

I had to make a quick trip to Tokyo and bought my plane ticket at the gate and stayed for about 2 weeks. My total charges ran into the $25k range. The difference is I paid it off about 3 weeks after returning.
A couple points about this... first there is a need for these tools. And if the credit card is so bad how come it helped me make a trip that ultimately led me to make about $500k in sales? Not a bad return on an investment.

john

john

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Author: morimoney Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36417 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 8:11 AM
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Right on Robb, I didn't see when you wrote this but I'm with you buddy. Any help I can be you know where to find me.

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Author: SilkySon Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36428 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 9:54 AM
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ANOTHER PIECE OF CRAP TECHNIQUE USED BY CREDITORS IS giving you the ability to over-charge your account a few bucks just to hit you with the over draft fee.(FIRST USA & MBNA) They call to solicit business, give you a 5K limit, and then if you charge some gas on your card after your spouse or one of your kids pushed the limit up or whatever, they hit you with the $39 or $49 dollar over-limit fee. When this happened to me, I called and the CSR told me that they were DOING ME A SERVICE by allowing me to make the charge (while sticking me up for another $40 bucks) even though I was close to the limit. If I wanted my card to freeze when reaching the limit, I would have to call another number and request to have the 'convenience' removed! I did just that, but WOW what a convenience! I even saw a friends statement that had 2 overdraft fees back to back for small purchases that were less than each of the penalty fees accessed! Ironically, the same card had a $14 unpaid balance once and was cut off after the payment was a week late. Funny I thought because when the card had reached the 7K limit they didn't mind letting the client over charge, but for $14 upaid dollars, they were very quick to cut off the service. Gotta appreciate good service when you recieve it!

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Author: SCotton Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36445 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 11:40 AM
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<I know I'm flogging a dead horse here, but The Fact is, people who are in a desperate financial state are being nudged into taking on more and more debt by these *same* companies!>

Can't understand why anyone thinks that individuals such as this are getting targeted in any manner. If they are in a 'desperate financial state', it apparently hasn't filtered to their credit report yet, or they wouldn't have been solicited for an account in the first place. Considering what a new account cost, believe me that a bank does not want the account if the customer is in this type of situation.
I get a bit frustrated with the 'nudging' excuse. If these people are in deperate straits and are desperate or ignorant enough to take on more debt, then I personally see that more as a personal responsibility issue. In my opinion, it's borderline fraud for you to accept the credit, knowing the risk is that high. Banks are not financial consultants, they are financial service providers. Why don't you call the bank and tell them the real situation and see if they are willing to provide you further credit.
At some point in time, people need to understand that THEY ARE RESPONSIBLE FOR THEIR OWN ACTIONS. Sorry for the caps, but I couldn't help myself.

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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36452 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 12:54 PM
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* No automatic "renewals"

perhaps this should read "no automatic renewals without prior authorization from the customer." some people put club/professional memberships, ISP charges, etc. on their cards, and these are "renewed" monthly, quarterly, yearly, etc. why deny me the convenience simply because someone else can't read the fine print for memberships and watch their billing statements?

zay34kc3

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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36460 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 1:17 PM
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Toto2 writes:

While consumers need to be accountable for their actions, I think a sharp eye should also be turned on credit card companies, and their continuing decisions to extend credit to people who obviously shouldn't be getting it!

<sarcasm>i know some overweight people who like eat red meat with lots of fat and baked potatoes with tons of sour cream. they obviously shouldn't be getting this stuff since it's not good for them. my uncle recently underwent bypass surgery....and he still drinks a lot. i think he shouldn't be getting that alcohol either.</sarcasm>

you can't make decisions for other people. i'll agree that someone making $16,000/year shouldn't have 5 credit cards with $20K racked up on them. but i can't force that person (either directly or via CCC restrictions) to not take/obtain that credit.

if i do so, then i open the door for well-intentioned busy-bodies to start legislating what type of credit I can get. i don't want that. i can handle my own personal finances, thankyouverymuch.

But ostentatious extensions of credit to someone just starting out? Come on, Fools...even the Savviest among us has to admit that they wouldn't run a business that way...

actually, the saviest among us would run a business in such a way that it legally maximizes profits*. obviously, CCC behavior maximizes their profits (or, at the very least, they think such behavior does). i doubt CCC managers sit in their offices thinking, "hmmmm....what's the best way to screw a new high school graduate with a part time job at K-mart? i know! let's overextend her credit!" CCC design their policies and actions to maximize profits.

zay34kc3
* i, personally, would never act that way in a business, but outrageous fees, late fees, variable interest rates, sub-prime lending, etc. are all legal



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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36467 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 1:40 PM
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Because the nature of this business is predatory, credit card companies should be made to pay a % of their earnings to a watchdog/lobby group for credit card customers. This fund will pay for an arbitration organization, and lawyers who represent customers in artbitration hearings and other dispute resolution. The group will also enforce accountability on the part of the CC Co's, who have run roughshod over the public for decades.



pzalvo, are you currently employed? if so, maybe we should have your employer/company pay a % of its profits to a watchdog group for your industry. after all, all companies make/provide products/services that could be misused, mismarketed, manipulated for company profit, etc., etc.

maybe we should have all companies pay this fee. then we could have one big arbitration company (which, of course, would have to pay its own fee to another company to watch it).

oh, let's also have people pay fees for private transactions. if i sell my car, i'd pay a fee to this company in case the buyer thinks i took him for a ride (no pun intended).

let's all have fees, fees, fees! i'm tired of thinking for myself. i'll pay a fee instead!

zay34kc3


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Author: TexLaw Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36468 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 2:28 PM
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--LONG POST--

Wow! Some kind of thread going on here!

There are some very good suggestions here, and there are some that are not so good. I'm going to do my best to stay somewhat organized in my comments, but who knows what will happen from here. Let me start by saying that I am more from the “Teach a man to fish” school, rather than the “Give a man a fish” school. I am also a bit of a libertarian, and I don't want to see any more regulation than is necessary, if any is necessary, to help this problem.

First thing's first, though, let's stop the name-calling. Such muckraking is only destructive. Why credit card users are ignorant is not yet important. Sure, it could be that some or all are “lazy,” and it could be that they are “dense,” but let's stop slapping labels on everyone who carries a balance or gets stuck with a fee and focus on the root problem: ignorance. By the same token, let's stop some of the snide remarks and attitudes that seem to be prevalent. Dismissing someone with sarcasm is rarely a good idea, and this is not one of those rare occasions.

Alright, any solution that has any hope of truly making things better all around must be focused. Many of the suggestions that have been made throughout the posts take something of a “whack-a-mole” approach to the problem without looking to the root cause (i.e., “Hey, there's a trouble spot! Whack it! Hey, there's another one! Whack it, too! Where are all these things coming from, anyhow?”). So, on what do we focus? Well, it seems that just about everyone who has posted could agree on one thing: Bad things happen to those who are uninformed. As one wise poster noted, ignorance is the root disease here, so let's target that ignorance. It seems that some posters are starting to do just that, so let's run through some the core proposals here:

THE CUSTOMER HAS THE RIGHT TO THE AGREED TERMS

This one has been pretty well argued, and I side with those that believe it is a bad idea. Credit cards are not fixed loans. They are revolving lines of credit. The differences may be subtle, but they are significant. Since balances on lines of credit can fluctuate from moment to moment, a creditor manages a line of credit much differently than that same creditor would manage a loan. There are different costs and different risks associated with each. If a creditor were forced to lock in a rate on a specific charge (or even just on a monthly balance), the debtor/consumer should expect the costs of that line of credit to go up dramatically. Expect annual or even monthly fees to return or increase. Expect incentives to vanish. Expect interest rates to climb. Expect hassles to become more frequent and more severe. Expect what leniency does exist to become even more rare. The first rule of credit is, always: The creditor WILL allocate risk to the debtor, if not by the terms of the agreement, then by an increased cost of the credit.

THE CREDITOR MUST GIVE CLEAR NOTICE

Fabulous idea. I am often irritated by finding that little, tiny slip of something amidst a sea of advertisements and offers. I don't know if a separate mailing is necessary, but I believe it is sensible. A slightly more economical solution may to print the notice, prominently, on the monthly statement.

NO MORE LATE FEE GAMES

Legislation is not the answer here, just because it's such a case-by-case problem. While I have had problems with unreasonable delays in posting payments, and I have heard of many others, I have never heard of any regularly reoccurring problems. For the occasional late fee, even one due to my own error, I have found that a phone call will result in its removal. Yes, that means I have to spend time and effort, but that's the breaks. If, indeed, you are having reoccurring problems with unscrupulous late fees, then you need to take your business somewhere else.

CREDIT LIMIT CHANGES (30-day notice)

I think it's a great idea as far as lowering credit limits. For other restrictions, it may not be appropriate. I don't see the use of 30 days' notice that future charges will be refused because you are over your limit or are delinquent in a payment.

NO 3RD-PARTY CREDITOR INFORMATION AS A BASIS OF A DECISION TO CHANGE TERMS

I must absolutely disagree here. Again, this goes to the difference between a loan and a revolving line of credit. The creditor's exposure to risk will change as circumstances change. One of those circumstances is your credit history, and the creditor should be allowed to consider your changing credit history in order to reassess his risk over time. If that creditor is unable to reallocate risk by changing terms of the agreement, expect higher up-front costs for the credit across the board. Remember the “first rule” stated above. Now, I am aware of how credit card companies may lure someone in, set the hook, and then attempt to change the terms of the agreement. However, that is a case where the consumer needs to refuse the changes, freeze the account under the current terms, and take his business elsewhere. That is always an option.

TRUTH IN CREDIT REPORTING

I see no need for any solution here. Timeliness of payment records and credit limits are already on the credit reports. The terms, generally, are irrelevant to someone assessing my credit. If for some reason they are relevant, that prospective creditor can ask me. As for the balance, I want my balance to remain confidential. Every Tom, Dick, and Harry who wants to run a credit check on me for whatever reason has no business knowing my balance.

FEES FOR CASH TRANSACTIONS

Another fabulous idea. Those CC folks love to hide those fees. Sure, they'll tell you about them in the beginning, and then bury them. When you use an ATM belonging to a bank other than your own, you already see a notice that your bank may charge you a fee. I see no problem is using a similar notice for cash advances on a CC. As for the “convenience checks,” where is the harm in printing a notice under the signature line, just a reminder?

FALL COMPLAINTS SERIAL NUMBERED

Another fabulous idea. In fact, many banks are already doing it.

NO SOLICITING TO STUDENTS

I cannot agree here. Extending credit to students is a good way for those students to begin to build a credit history, which they are going to need. I would like to see a pamphlet or something along those lines included with the card, outlining the pitfalls of credit cards. If the student then refuses to read it or follow the information provided, then I have little sympathy for their problems. As far as worrying about student loans, don't. Governmental student loans go to the schools, and the schools first apply the money to tuition and fees. The balance may be disbursed to the student for other expenses. If the student wastes the money, then that student has dug his own hole. Student loans are not dischargeable in bankruptcy except in a case of “severe hardship,” and “severe” is taken very seriously.

At the same time, I also cannot agree with the repeated argument that students are adults, and therefore will be responsible with credit because they can go to war, drive a car, vote, etc. You don't go to war without boot camp, and you can't drive a car without passing a test that, at least, makes you aware of some dangers. No such training or testing is currently required, strongly encouraged, or even widely available when it comes to credit cards. As for voting, I know the United States Constitution better than most, and I do not recall a Constitutional guarantee of credit, while I do recall a few things about voting. For those of you that have done so, I am somewhat disgusted that you would equate the highest privilege, often referred to as “the right to vote,” with something like a credit card. You speak of those who may go to war. Do you think we ask them to do so for our Visa and Mastercard?

TERMINATION OF AGREEMENT IS PERMANENT

While you would think this could be resolved otherwise, it looks like regulation may be needed. I've run into this before, with the “automated” payments. I cancelled a card, and I had also cancelled an automatic payment drawn on that account. However, the payment did not stop, and the card folks kept sending me statements on an account that was supposed to be gone. While this has really nothing to do with curing ignorance, it's just purely a matter of dirty pool.

NO BINDING ARBITRATION

As has been already mentioned, there isn't a snowball's chance of this going through, due to the Federal Arbitration Act. However, certain limits can be placed on the enforceability of the agreement. For example, the CC may not specify the place where the arbitration will be conducted, or something along those lines.
---
The idea is that we must find ways to educate the consumer, and it doesn't have to be anything too complicated or elaborate. I would hate to see any preliminary legislation that goes any further than making the information accessible to the consumer, while prohibiting the credit card folks from burying it under ads, fine print, and complex language. In that way, the ignorant consumer can become an informed consumer, and the market should work to improve customer service. If, on the other hand, the ignorant consumer desires to stay ignorant, then let them learn the hard way.


TL


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Author: Graciegirl Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36470 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 2:52 PM
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I don't entirely agree with you here. I'm all for taking personal financial responsibility, and that's why I'm meticulous about paying my bills. I am currently in over my head, but will keep chipping away until the debts are cleared.

The same credit card company that refuses to lower my interest rate, though I've never paid late, thought it was fine to go ahead and raise my credit limit without my involvement.

Now, it is my choice and responsibility not to USE that credit, but it's still dirty pool on the company's part to try to add to that debt.

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Author: criscarson Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36471 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 3:01 PM
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Gracie, why don't yoou just call the said CC co and request (if you want to that is) :-) that they lower your limit to what it was before?

You don't **Have** to have it available you know....

just my .02;

cc

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Author: pzalvo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36473 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 3:26 PM
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Think in terms of hard dollars and percentages of payment, not percentages on balance. Someone who has limited funds to pay to the account cannot afford to pay 1-2% of the balance, while also being able to avoid an overlimit fee the next month.

If a minimum payment due is, say, $179, a hardship case shouldn't have more than $17.90 applied as a late fee.

Your knee jerk reaction demonstrates you've read your agreement, good for you. However, it also demonstrates a vivid lack of imagination that your CC Co will prey on your misfortune should you ever find yourself in hard times. Pray, pray very hard, you never do.



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Author: TexLaw Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36474 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 3:30 PM
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SCotton said:

>>Can't understand why anyone thinks that individuals such as this are getting targeted in any manner. If they are in a 'desperate financial state', it apparently hasn't filtered to their credit report yet, or they wouldn't have been solicited for an account in the first place.<<

I apologize for being so direct, but that statement is just incorrect. Without a doubt, such people are targeted, all the time. A couple people here mentioned that they receive somewhere around five CC offers every week. Wanna know how to get even more? Answer: File chapter 7 bankruptcy, and get a discharge. Your mailbox will be nearly stuffed with credit card offers. That really happens, and it happens all the time. The banks know that you cannot get another discharge for six years. Credit card folks are afraid of people that can file bankruptcy at a moment's notice, because credit card debt is unsecured debt, and unsecured debt will be paid pennies on the dollar, if it's even paid at all. That being the case, you're actually a very good credit risk, since you have no recourse in bankruptcy, at least not for six years. During that time, you can run up all sorts of debt, and the credit folks can harass you and harangue you and threaten to sue and take your home and soul end everything else. I guarantee you that, if you called up some banks and told them you just got home from getting your discharge, they'll all but trample over each other to be first in line to give you a shiny new credit card. If you don't believe they do that sort of thing, talk to anyone that does bankruptcy work for debtors, then be prepared to hear a lot of stories.

>>If these people are in deperate [sic] straits and are desperate or ignorant enough to take on more debt, then I personally see that more as a personal responsibility issue.<<

You said two very key words right there: desperate and ignorant. Someone desperate will do anything to survive, and that's when Mr. Credit Card comes knocking. Those desperates and ignorants are the targeted people. Think about what I just talked about, above. For more proof, watch some daytime TV during the week. It seems that every other commercial begins with: "Do you have no credit? BAAAAD Credit??? Divorce?? Bankruptcy??? We can help! And with no cash deposit!" Then you see a bunch of smiling people, wiping the worried sweat from their brows with fists full of money. That commercial is targeted directly at someone in a "desperate financial state." It's written with those people in mind! The advertisers know full well that someone in such a condition likely is embarrassed by that condition, and the bank/finance company is deliberately playing directly on that embarrassment. They go for the chink in the armor and tell you how they will work with you to make your life better than it is now. Just call this number . . . .

>>At some point in time, people need to understand that THEY ARE RESPONSIBLE FOR THEIR OWN ACTIONS.<<

You're absolutely right, but at what point? At the point they are desperate and ignorant? Why are these folks so ignorant, anyway? No doubt, some are because they want to be. They don't care what all that stuff says; they know what they are doing, and they won't let anyone tell them otherwise. I have no sympathy for those people, and I'm not worried about them in the least. However, most of the people I have talked to were, basically, innocent. They didn't know about the pitfalls because nobody told them. They even read all the disclosure that was on the back of the credit card application and that came with the card, but they didn't know what any of that stuff meant. These aren't necessarily sophisticated individuals with formal education or even informal education about finance. When they read that the APR on the balance of all purchases not paid during the 25 day grace period will be assessed a finance charge in an amount determined by: 17.7%+the prime rate as published in the Wall Street Journal on the first Monday of every month, they don't know what the heck that means. There are no explanations or definitions for them there. If they call the bank to ask their simple questions, they'll probably be treated rudely. More likely, they'll end up talking to someone who doesn't hardly know anything about all that language, either, and probably couldn't care less just so long as they still get off work in another couple hours. Those people do not want to ask their friends because they are scared that they'll look weak and stupid. Surely you must understand how, in the real world as it works, so many people are just like that.

Now, I don't want to baby those people, and I don't want to see anyone else baby them, either. I want those people to be informed about their risks and remedies. Personal finance is not intuitive. It must be taught.

Instead of informing those ignorant consumers about the real risks and details about the credit card agreement, the financial institutions obfuscate those details within a whole lot of marketing and rewards. Instead of passing by the desperate consumers, including those who have just received a discharge in bankruptcy, unscrupulous financial institutions target them.

Now, consider all I've talked about here. Certainly, the debtor must assume some responsibility. However, it's still up to you to decide who the more culpable party is: the deceiver or the deceived.


TL

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Author: pzalvo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36475 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 3:40 PM
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Not only is your diatribe sarcastic, but also demonstrates a mean-spirited disregard for hardship cases, who through circumstance, (job loss, client loss, company closure, factory closing, etc), find themselves at the mercy of CC Co's.

I take it you've never had hard times, you sound young, and so pray that you never do. People will do whatever they need to do to survive hard times, and if it means jacking a CC Card so be it. Kids have a nasty habit of wanting to eat a few times a day.

Not long ago the auto industry was predatory in nature, expecially when it came time to settle up on their own negligence. They would routinely ignore customer complaints, bury legitimate complaints in miles of paperwork, and even outwardly dismiss actionable negligence. The bottom line? Car sales suffered.

Today, not only do they all contribute to arbitration, but are subject to state mandated arbitration codes. The result? Car co's are just as profitable as ever, and consumers now have a way to make the automakers accountable for their actions.

Your analogy to Coca-Cola is pedantic. What exactly do you mean by it?

Enjoy your vacation and try to get over the fact that there is someone here who disagrees with you, and who thinks you have a lot to learn.

By the way....I returned a lemon Ford Windstar that Ford would not buy back even though they knew the car had major problems. You know why they bought it back? The automaker-sponsored state arbitrator made them.

Have a great trip.


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Author: pzalvo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36476 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 3:42 PM
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And, oh by the way, no I am not in debt, and enjoy a comfortable net worth.

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Author: IngridB Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36478 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 3:54 PM
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Now, it is my choice and responsibility not to USE that credit, but it's still dirty pool on the company's part to try to add to that debt.

I hope I can say this without sounding too argumentative. I really don't mean it that way, and I've tried to phrase things carefully.

I cannot agree with the statement I've included above, and I find it hard to understand how anyone could.

You entered into a relationship with the credit card company because you wanted them to extend credit to you. You have an ongoing relationship with the credit card company, which you could cancel at any time (by closing the account). The credit card company makes money by extending credit to people (getting them into debt). Existing customers are cheaper for them than new customers. Therefore, it seems like a basic part of their business plan to encourage existing customers to use their cards more, and one way to do this is by giving them a higher limit. So it seems to me like you're saying that their basic business is "dirty pool", which I can't disagree with more.

I think you hit the nail right on the head when you emphasized your responsibility to use the credit as you choose. Besides, if you don't want the limit, simply call and have it lowered. I've never heard of a refusal to lower a credit limit.

Ingrid

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Author: IngridB Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36480 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 4:04 PM
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If a minimum payment due is, say, $179, a hardship case shouldn't have more than $17.90 applied as a late fee.

Your knee jerk reaction demonstrates you've read your agreement, good for you. However, it also demonstrates a vivid lack of imagination that your CC Co will prey on your misfortune should you ever find yourself in hard times. Pray, pray very hard, you never do


But you seem to be missing the point that if I choose to charge you $100 because today's Wednesday, and you agree to allow me to do this, it's not really fair to complain after the fact. The fact that the credit card company has a policy for reducing fees and interest for hardship cases is their choice. You did not require them to have this policy before you entered into a voluntary agreement with them.

Ingrid

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Author: luke007 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36481 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 4:09 PM
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Not only is your diatribe sarcastic, but also demonstrates a mean-spirited disregard for hardship cases, who through circumstance, (job loss, client loss, company closure, factory closing, etc), find themselves at the mercy of CC Co's.

If I may use some of your material:
Not only is your diatribe uninformed, it also demonstrates a disregard by negligence for hardship cases, who through circumstance find that they would have no source of credit, save for the service provided by credit card companies.

Not long ago the auto industry was predatory in nature, expecially when it came time to settle up on their own negligence. They would routinely ignore customer complaints, bury legitimate complaints in miles of paperwork, and even outwardly dismiss actionable negligence. The bottom line? Car sales suffered.

Today, not only do they all contribute to arbitration, but are subject to state mandated arbitration codes. The result? Car co's are just as profitable as ever, and consumers now have a way to make the automakers accountable for their actions.


This laughably cursory analysis of the situation misses several key points. First of all, you seem to assume that the only goals here should be to increase the quality of service of car dealerships and to increase their profitability. However, a more noble goal might be for service and product quality to be set at levels for which people are willing to pay by free market interaction. The costs of contributing to the arbitration board are surely passed by the car dealers to the consumers. Perhaps you don't care that some less fortunate folks found themselves unable to afford the cars that they could have afforded if this policy had not been mandated. You seem more concerned with the fact that-

I returned a lemon Ford Windstar that Ford would not buy back even though they knew the car had major problems. You know why they bought it back? The automaker-sponsored state arbitrator made them.

That's great for you. How about the guy who's taking the bus to work now because he couldn't afford the new, artificially inflated car prices?

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Author: sam322 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36497 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 5:04 PM
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You said two very key words right there: desperate and ignorant. Someone desperate will do anything to survive, and that's when Mr. Credit Card comes knocking. Those desperates and ignorants are the targeted people. Think about what I just talked about, above.

most of the people I have talked to were, basically, innocent. They didn't know about the pitfalls because nobody told them. They even read all the disclosure that was on the back of the credit card application and that came with the card, but they didn't know what any of that stuff meant. These aren't necessarily sophisticated individuals with formal education or even informal education about finance. When they read that the APR on the balance of all purchases not paid during the 25 day grace period will be assessed a finance charge in an amount determined by: 17.7%+the prime rate as published in the Wall Street Journal on the first Monday of every month, they don't know what the heck that means. There are no explanations or definitions for them there. If they call the bank to ask their simple questions, they'll probably be treated rudely. More likely, they'll end up talking to someone who doesn't hardly know anything about all that language, either, and probably couldn't care less just so long as they still get off work in another couple hours. Those people do not want to ask their friends because they are scared that they'll look weak and stupid. Surely you must understand how, in the real world as it works, so many people are just like that.

I hope that sums up what you said, but SORRY, I do NOT feel any responsiblity to help the ignorant of our society. If people have read the cntract, do not understand and get no satisfaction from the issuing agent, there is a SIMPLE solution, you don't sign the contract!!

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Author: mcjanner Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36500 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 5:12 PM
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**Credit Card companies are not your friend.**

IT kills me every time I see something to this effect.
No, CCC are not your friend. They are a BUSINESS, in the business to MAKE MONEY. If you don't keep up with your contractual end of the agreement, as a business they have the right to collect what is owed them.

We are all born with brains, some better able to process information than others, and we all hopefully can use them to make the correct decision in regards to managing our finances. My own cc trials are MY OWN FAULT, as a person who was an accumulator of possessions, not knowledge. Education is the issue here- educate yourself and be responsible for managing your life.

The only legilsation I advocate is voting with your feet.

TriChick

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Author: blackmare Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36501 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 5:15 PM
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"I get my share of credit card offers too, probably a half-dozen a week. I've yet to see one that has minimum payments that are lower than the monthly finance charges."

It does happen, at least if you carry a balance, which I do not anymore.

When I had a balance on my old Household Visa, they "rewarded" me for consistently paying on time, by lowering my minimum payments...to approximately three dollars LESS than my monthly finance charges. So, had I simply paid the minimum, I would actually have gotten deeper into debt each month. Nice reward huh? You appear to be more responsible than I was then, and probably you're not dealing with companies that use this tactic, but trust me, some do. Should it be illegal? Probably not. Nobody forced me to pay only the minimum, and the numbers were right there in plain sight on my bill.

Household also sent me offers for more junk than you would believe. Credit insurance, life insurance, magazines, watches, clock radios, you name it and they were trying to sell it to me. It irritated me so bad that I am just in heaven with my new company that doesn't pitch anything at me. They do provide a valuable service. I would still like to see some plans for consumer education though, because I don't think heavy consumer debt is really good for the economy in the long term.

Good idea about the convenience checks, by the way.


Tracie


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Author: sam322 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36504 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 5:19 PM
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I could not agree more with Luke007. I am glad you are happy that you screwed Ford. Every government requirement, mandate, law, legislation, on any industry is ultimately passed on to the consumer. The government creates NO value in our society, they only reshuffle it. Any bill passed to "protect" consumers from the "evil" CC companies, will only result in more gov. oversight and higher fees for CC users. I personally take full responsibility for all of my own actions, and therefore, I only ask the gov. for the right to my own life, for this reason I support the abolition of the Social Security system. The government can only take from me and give to someone else. That is called Altruism, a philosphy in clear conscience that I can not support.


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Author: Toto2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36511 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 5:47 PM
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Toto2 writes:

While consumers need to be accountable for their actions, I think a sharp eye should also be
turned on credit card companies, and their continuing decisions to extend credit to people
who obviously shouldn't be getting it!

<sarcasm>i know some overweight people who like eat red meat with lots of fat and baked
potatoes with tons of sour cream. they obviously shouldn't be getting this stuff since it's not good for
them. my uncle recently underwent bypass surgery....and he still drinks a lot. i think he shouldn't be
getting that alcohol either.</sarcasm>

you can't make decisions for other people. i'll agree that someone making $16,000/year shouldn't
have 5 credit cards with $20K racked up on them. but i can't force that person (either directly or
via CCC restrictions) to not take/obtain that credit.

if i do so, then i open the door for well-intentioned busy-bodies to start legislating what type of
credit I can get. i don't want that. i can handle my own personal finances, thankyouverymuch.

But ostentatious extensions of credit to someone just starting out? Come on, Fools...even the
Savviest among us has to admit that they wouldn't run a business that way...

actually, the saviest among us would run a business in such a way that it legally maximizes profits*.
obviously, CCC behavior maximizes their profits (or, at the very least, they think such behavior
does). i doubt CCC managers sit in their offices thinking, "hmmmm....what's the best way to screw
a new high school graduate with a part time job at K-mart? i know! let's overextend her credit!"
CCC design their policies and actions to maximize profits.

zay34kc3
* i, personally, would never act that way in a business, but outrageous fees, late fees, variable
interest rates, sub-prime lending, etc. are all legal


Hey, zay34kc3!

Sorry if you took my post a little too much to heart! As I've said numerous times, I'm happy you (and other Fools) are able to handle your cards in a credible way, and I only wish more folks were able to do so!

Hopefully, you'll be as quick to share some guidance and reassurance with those who post here in dire need. I, for one, look forward to reading your insight, bud!

Fool on!

mike

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Author: Toto2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36513 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 5:54 PM
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actually, the saviest among us would run a business in such a way
that it legally maximizes profits*.


* i, personally, would never act that way in a business, but outrageous fees, late fees,
variable
interest rates, sub-prime lending, etc. are all legal



P.S. Nice contradiction...

mike




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Author: mcjanner Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36526 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 6:39 PM
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**actually, the saviest among us would run a business in such a way that it legally maximizes profits*. obviously, CCC behavior maximizes their profits (or, at the very least, they think such behavior does). i doubt CCC managers sit in their offices thinking, "hmmmm....what's the best way to screw a new high school graduate with a part time job at K-mart? i know! let's overextend her credit!" CCC design their policies and actions to maximize profits.**

Thank you for stating succinctly what I also feel and agree with.
Never abdicate your personal responsibility to someone else. If everyone took responsibility for their own actions, this world would be a much better place.

TriChick

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Author: TexLaw Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36533 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 7:08 PM
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>>I hope that sums up what you said, but SORRY, I do NOT feel any responsiblity to help the ignorant of our society.<<

Well, then, it's a damn good thing that there are people who do. Take this site, for example. It's all about helping the ignorant. I was completely ignorant about investing, buying a home, buying a car, and a number of other things until I came here several years ago, waaay back when it was just a folder on AOL. If you have ever learned a single thing here, from your family, from your friends, or from anywhere else, you ought to get down on your sorry, ingrateful knees and thank every star you can see that there are people who feel responsible to help, or at least enjoy helping, the ignorant.

What you quoted from my post sums up my position very well. I hope this does, too: Next time you need some help with something because you don't understand what is going on (i.e., you are ignorant), don't come to me until you've figured out what I'm talking about in the above paragraph. Good night.


TexLaw

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Author: BaritoneFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36535 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 7:17 PM
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Consumers have one option available to them that the gazelles don't - the gazelle can't cancel the lion. Or refuse to apply for the lion. Or responsibly use the lion. Or refuse to carry a balance on the lion.

I love this metaphor, too.

Yes, but neither does a gazelle have to deal with approaching a turtle that transforms into a lion; or deal with the lion's attractive come 'ons, or try to outrun the lion's jet pack, or get snared in the lions numerous palm-covered pit traps ...

One of the biggest problems with credit card companies is that they are disguised by what people expect them to be. A Visa is a Visa is a Visa, and all those Cardmember Agreements look pretty much the same -- put that away until later and oh, here's the number to call to activate it.

And now you're stuck with terms that are, quite frankly, unfair.

Caveat Emptor? Really?

Here we have a situation where two parties enter into a contract.

The consumer does not see the agreement until the card arrives.

The agreement looks like the same legalese that he could read when he applied for the card, but it's not.

The agreement is enacted upon activation of the card, this fact is in the agreement; yet it is possible to activate the card without reading the agreement and the consumer is caught unaware.

The bank can change the agreement (!) at any time [the definition of an agreement should be some mutual affirmation between two parties, but in this industry, it does not].

The bank can retroactively change an agreement.

The bank can call a behaviorally variable instrument fixed.

The bank can steer customer into fee situations even when it clearly against the customer's best interest by hiding the details of the fee.

The Credit Card Bill of Rights at this point is a collection of good and bad ideas that merit discussion. When it is finished, it might go nowhere. My vision is that limits the credit card industry to pull fast-ones on their consumers while, at the same time, doesn't prohibit them from making money at all.

Take a look at some of these more infamous offers of credit: $8 a month, $99 processing fee, 25.99% APR, $29 Late/Lame/Lazy fee, $6 fee for sending your check online. Would anything in the Credit Card Bill of Rights stop this? No, if it were properly disclosed and not marketed to kids -- they can continue to offer these "products."

But what it solves is hiding the notice in advertising. Baiting and Switching. Deep sixing complaints.

I will be adding some of the suggestions, some that I think aren't ultimately good ideas, but merit discussion.

Nothing will happen if the end result is not fair to the industry.

Robb

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Author: sam322 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36537 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 7:33 PM
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I am sorry to offend you TexLaw, I obviously wasn't very clear in my comments. I have NOTHING against helping people. I am an Eagle Scout and support many charitable and service organizations. What I meant was that I do not want to be required to support education and relief efforts through additional government fees on my credit card, like are in place on my phone bill. I feel people should get an education on personal finance somewhere, maybe as part of a high school cirr. but that is another thread.

My only contention with your post, the Fool is Fool.com not Fool.org. It is a business, run to make a profit, as it rightly should be. This board is the Fool's service to us, the customers in return for payment, looking at the ads.

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Author: BaritoneFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36538 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/14/2000 7:35 PM
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AUTOMATIC CREDIT LINE FREEZE/CANCELLATION

No credit card issuer may keep open a customer's revolving account if that account's balance is 75% or more of the credit limit for any continuous period of a year or more. If a customer's account balance is continuously at 75% or more of the credit limit for a year or more, the creditor must freeze the account for any future use until the customer has reduced the account balance to zero. If the customer's account has been so frozen on three or more separate occasions, the creditor must permanently close the account. Upon closing the account, the creditor may no longer charge interest on the remaining balance or membership fees.



If you have a $10,000 credit limit and are faithfully paying $300 a month (3%) because you have a 7.9% APR deal and that's cheaper than the other obligations you are paying, then you would trip this provision.

Just an observation

Robb

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Author: johnnstace Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36583 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 7:29 AM
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At the same time, I also cannot agree with the repeated argument that students are adults, and therefore will be responsible with credit because they can go to war, drive a car, vote, etc. You don't go to war without boot camp, and you can't drive a car without passing a test that, at least, makes you aware of some dangers. No such training or testing is currently required, strongly encouraged, or even widely available when it comes to credit cards. As for voting, I know the United States Constitution better than most, and I do not recall a Constitutional guarantee of credit, while I do recall a few things about voting. For those of you that have done so, I am somewhat disgusted that you would equate the highest privilege, often referred to as “the right to vote,” with something like a credit card. You speak of those who may go to war. Do you think we ask them to do so for our Visa and Mastercard?

Nope we don't. But we do ask them to protect our freedom. One of which to have the right to decide for our self what, as an individual, we want to do with our lifes without a government looking over our shoulder. Being a Libertarian you should be all in favor of that.


...ignorance is the root disease here, so let's target that ignorance.
Being of the 'teach a man to fish' school you should know that you can teach him but you can't drag his behind out of bed and do it. So if he decides to sleep all day is it our duty to listen to him whine because he is hungry? I stand by the term 'lazy' as another one of the 'root' cause to 'whack'.


john


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Author: Graciegirl Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36588 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 8:41 AM
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I know I can lower the limit and I plan to do that. I'm waiting until I pay off another $500 and then I can get them to lower the limit by $2500.

My point is that if I'm such a bad risk, too bad to give a good rate to -- no late payments or defaults ever on my credit report -- then why is extending me additional credit a good idea from their perspective?

Simple: greed. And it's the Evil Fleet I'm talking about here.

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Author: Graciegirl Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36589 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 8:44 AM
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You're missing my point.

I'm not saying the company was out of line by extending me additional credit in and of itself. I'm saying that thinking I'm too bad a risk to lower my rates (my credit is spotless other than my debt/income ratio is too high right now) yet thinking I'm an okay risk to extend additional credit to doesn't make sense.

I do plan to have them lower the limit -- as I explained in another post, I'm waiting to pay off some more to do it in one big swoop.

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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36597 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 9:30 AM
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TexLaw writes:

>>I hope that sums up what you said, but SORRY, I do NOT feel any responsiblity to help the ignorant of our society.<<

Well, then, it's a damn good thing that there are people who do. Take this site, for example. It's all about helping the ignorant. I was completely ignorant about investing, buying a home, buying a car, and a number of other things until I came here several years ago, waaay back when it was just a folder on AOL. If you have ever learned a single thing here, from your family, from your friends, or from anywhere else, you ought to get down on your sorry, ingrateful knees and thank every star you can see that there are people who feel responsible to help, or at least enjoy helping, the ignorant.


while i cannot speak for the original poster you quoted, i'd like comment on this.

there is a difference (major, major difference) between being responsible for something/someone and acting out of good intentions. what most people want with some of these more outlandish "rights" is to make society/government/etc. responsible for ignorant people's actions. do we really want this?

TMF is a great thing, but do you think it was founded because someone pestered a couple of brothers, saying, "hey, you're responsible for someone else's lack of financial knowledge?" should we mandate that everyone read it because we want to be "responsible"?

people have asked me for personal help in the past, and i've been more than happy to oblige when i've thought my knowledge might do some good. i've even gone so far as to offer unrequested help when i've thought necessary. but i've never made it my business or responsibility to look out for other people's business.

and i think that's the fundamental issue here....turning that well-intentioned concern into mandated, legislated responsibility.

zay34kc3

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Author: TexLaw Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36599 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 9:42 AM
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sam322:

>>I am sorry to offend you TexLaw, I obviously wasn't very clear in my comments. I have NOTHING against helping people. I am an Eagle Scout and support many charitable and service organizations. What I meant was that I do not want to be required to support education and relief efforts through additional government fees on my credit card, like are in place on my phone bill.<<

If that is your concern, then I must also apologize if my comments were not clear. Within the context of this discussion, I have not advocated any such programs or any such fees to pay for them. While I strongly encourage and support financial education, I have no desire to see legislation requiring such. With a couple small exceptions, the only legislative or regulatory reform I have advocated concerns notice. Fair notice. Clear notice. Objective notice. Reliable notice. When it comes to credit cards, I don't care to baby anyone, but providing consumers with sufficient, accessible information is not babying. No great harm will come to the industry or to responsible consumers if the CC folks are required to make their disclosures more prominent and in plain language.


TL

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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36600 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 9:45 AM
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The consumer does not see the agreement until the card arrives.

at which point you can cut-up the card and reject the agreement.

The agreement looks like the same legalese that he could read when he applied for the card, but it's not.

if a new agreement is sent with the card, the person can read it. i'll agree it's a problem if the agreement is changed without disclosure to the person before accepting/activating the card.

as for a new agreement, hey, there's a reason you should read the entire agreement before signing, activating the account, using the card, etc.

The agreement is enacted upon activation of the card, this fact is in the agreement; yet it is possible to activate the card without reading the agreement and the consumer is caught unaware.

again, if a new agreement is drawn up (after application) and not provided to the user before activation, then it's a problem. but as for the possibility of activating the card before reading the agreement (when it's provided), hey, we can do a lot of things without reading. I can operate power tools without reading the manuals. i can sign a car loan without reading the agreement. i can enlist in the military without really reading the paperwork. heck, i can vote without reading a thing about the candidates.

The bank can change the agreement (!) at any time [the definition of an agreement should be some mutual affirmation between two parties, but in this industry, it does not].

actually, you can do this if the option to change is in the original agreement. as long as you're given proper notice and the chance to disagree, what's the problem? sure, the notice may come in a flyer or in a new 5 page agreement. in that case, you can read it.

The bank can call a behaviorally variable instrument fixed.

hey, the bank could call the interest rate a "economically-derived income adjustment factor relating to economic conditions" for all i care. as long as the bank discloses how the rate is determined (fixed % + prime, etc.), what's the difference? you can read the disclosure information to find out what's going on. the motley fool advocates wise (not Wise) behavior. should we force them to change the name because it's calling itself something else besides wise?

The bank can steer customer into fee situations even when it clearly against the customer's best interest by hiding the details of the fee.

how can they hide the details of the fee? i thought fees had to be disclosed in the agreement. if my agreement states how much late fees, over-the-limit fees, returned-check fees, etc. are and when they apply, how are the details hidden?

zay34kc3

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Author: NylaB Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36603 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 9:54 AM
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Ok. I've been following this thread for a while and I have to put in my two cents.

Often we expect companies to do good for their community and the country. Oil companies give money for research of environmental issues because we expect them to give back. Real Estate companies offer scholarships and support local schools because we expect them to give back. There is a socal expectatiion that companies will give back willingly to the communities they take from. Companies like Wal-mart often benifit from the positive press and good feelings generated by community reinvestment.

We also expect companies to provide safe handling instructions. Some people, like my husband, need to be told not put the blender in the water plugged in. Sometimes these get a little silly (have you read the lables on ladders lately?) People win product liablity cases becase clear consumer labeling is an expectation.

I don't know what credit card companies "give" back, but I do know they provide the bare minimum of safe handling instructions. They often "label" their services in a manner that is intended to hurt people who don't read the fine print. Are those people stupid? Yes! And, I count myself among the stupid. The companies have a track record of not providing information until a law is made forcing them to do so.

In a perfect world, consumers would be educated and credit card companies wouldn't need to either give back or clearly label their services. In another version of a perfect world, credit card companies would care about the individuals and leverage that into fiscal success.

This is not a perfect world.

Nyla

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Author: luke007 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36613 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 10:36 AM
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Well, then, it's a damn good thing that there are people who do. Take this site, for example. It's all about helping the ignorant.

It's all good and well to get a warm fuzzy feeling from all the help ignorant people are getting from this website. I know I personally have learned a LOT about managing money. But you show a bit of naivety by proclaiming that 'This site (is) all about helping the ignorant'. In actuality, what this site is all about is making money for the people who run it. That it helps the ignorant is merely an indication that the ignorant are willing to pay money to shed their ignorance. For a more in depth discussion of this matter, see my post, 'Overspending Idiot' Views - Unseen Commodities (#58407), on the Living Below Your Means board.

...you ought to get down on your sorry, ingrateful knees and thank every star you can see that there are people who feel responsible to help, or at least enjoy helping, the ignorant.

This is probably the most telling phrase in your message. It reveals that you are not posting entirely with the motive of discussion, but rather of telling people how they ought to behave according to you. This is very different from Sam's contention that he doesn't care what people do (in regards to using their credit cards), as long as he isn't made legally responsible to pay for it. Perhaps you should think this through a little further before you make such high-handed demands of those who have other points of view than your own.

-Luke

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Author: IngridB Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36614 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 10:49 AM
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Someone wrote:
>>I hope that sums up what you said, but SORRY, I do NOT feel any responsiblity to help the ignorant of our society.<<

TexLaw responded:
Well, then, it's a damn good thing that there are people who do. Take this site, for example. It's all about helping the ignorant

Maybe I'm reading into what the first poster said, but maybe what they meant was not so much "helping" as "bailing out"? That would represent my feelings on the matter. I believe in helping the ignorant, but mostly just by teaching them. Not by bailing them out of mistakes that they've made. And not by baby-proofing the world so that they cannot make those mistakes.

Also, there is a big difference between an ignorant person who is trying to fix the situation (by coming to a site like this, or seeking other forms of education) and an ignorant person who doesn't recognize their ignorance or doesn't care. I'll go out of my way to help the first, and will make an effort with someone who just doesn't realize. If they don't care though, it really bothers me. Especially since we already have many laws in the US based on protecting people from their own ignorance, rather than trying to educate them.

Ingrid

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Author: criscarson Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36615 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 11:02 AM
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Someone wrote:
>>I hope that sums up what you said, but SORRY, I do NOT feel any responsiblity to help the ignorant of our society

Well, gosh, that sort of shoots the whole education system in this country all to hell...aren't we ALL ignorant at one point and time!

I mean, it's all relative. :-)

cc

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Author: epdharma Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36616 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 11:30 AM
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If you have a $10,000 credit limit and are faithfully paying $300 a month (3%) because you have a 7.9% APR deal and that's cheaper than the other obligations you are paying, then you would trip this provision.

You're right. My intent, however, was to create motivation for debtors to use their credit cards like an accounts receivable credit line (i.e., use it until the paycheck comes in, then pay it off so it can be used again -- a true revolving line). My thinking was that, knowing they would have to pay off their debts more quickly, they would be less stressed about using the card more often. Creditors, I think, would benefit by having more usage of the card. They could receive more fees from merchants that would offset interest income losses from eliminating the consistently high balances.

Originally, the threshhold was 90% of the maximum. This way, a debtor with a 7.9% rate on a $10,000 balance would go from $10,000 to $9,000 in one year using the 1.5% minimum payment. I didn't think that was enough motivation -- debtors could make minimum payments for a year, reduce the balance to, say, 89%,then run the balance back up to maximum and start paying it down. They would only be using 10% of their credit capacity (much the same way they only use 10% of their brains). So I lowered the threshhold to 75%.

I could reduce the threshhold even more, in my opinion.

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Author: TexLaw Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36617 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 11:36 AM
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>>Being of the 'teach a man to fish' school you should know that you can teach him but you can't drag his behind out of bed and do it. So if he decides to sleep all day is it our duty to listen to him whine because he is hungry? I stand by the term 'lazy' as another one of the 'root' cause to 'whack'.<<

I have already conceded that some folks are ignorant because they are lazy, because they think they already know it all, or because of whatever reason they have chosen to be ignorant. I have also stated quite flatly and repeatedly that I have no sympathy for such people. For that matter, I have also stated that I do not wish to baby anyone, much less drag them out of bed and try to whip them into shape. I am a staunch advocate of choice with a minumum of government intervention. If those lazy folks have chosen to be stay in bed and be ignorant, then I am content to let them do so and suffer whatever consequences may come.

What I am advocating and will continue to advocate is improved notice in the credit card arena. As I have stated, I do believe in choice. However, more than that, I believe in informed choice. The better the information you have, the better the choice you can make. If an informed consumer wants to pay 27.25% APY on a two-cycle system with $50 over-limit fees, have the same APY apply to those and other fees, have those over-limit fees charged and added to the balance with every subsequent billing cycle until the balance is reduced below the limit for a whole cycle, have that limit reduced without notice before the fact, and have a minumum payment reduced "as a favor" in such a way that negative amortization results without any notice that negative amortization will result from this "favor," then I say more power to him. However, many consumers will not make an informed choice because they did not understand the disclosures with which they were provided, and when they sought further explanation they were given inaccurate or even misleading information. Furthermore, many "tricks of the trade" that really put a further bite on consumers are not disclosed.

I'll say it again, I am advocating improved notice: notice that is prominent, complete, and in plain language. There is no harmful cost to the industry or responsible consumers in providing such notice, nor would any freedom choice be significantly sacrificed in requiring such notice.


TL

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Author: epdharma Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36618 of 308519
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/15/2000 11:38 AM
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I don't know what credit card companies "give" back, but I do know they provide the bare minimum of safe handling instructions. They often "label" their services in a manner that is intended to hurt people who don't read the fine print. Are those people stupid? Yes! And, I count myself among the stupid. The companies have a track record of not providing information until a law is made forcing them to do so.

In a perfect world, consumers would be educated and credit card companies wouldn't need to either give back or clearly label their services. In another version of a perfect world, credit card companies would care about the individuals and leverage that into fiscal success.

This is not a perfect world.


Amen! As much as I like to lay blame at the feet of these creditors, I find it difficult to ignore the lack of personal responsibility so many Americans hold onto like a privilege. It is as if the Constitutional guarantees of life, liberty, and the pursuit of happiness also implies the privilege of blissful ignorance! In my opinion, no one who earns the privilege to credit -- even if they have all the money in the world -- earns the right to ignore common sense and then blame others when common sense bites them in the butt.


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