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Author: bingocards Three stars, 500 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308687  
Subject: Your rates are increasing. Thanks, Congress. Date: 5/19/2009 11:54 PM
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http://www.nytimes.com/2009/05/19/business/19credit.html?_r=...

I wasn't having enough fun bailing out deadbeats and the institutions that lend to them already, so Congress in its infinite wisdom has decided to force the banks to charge subprime customers less and the rest of us more. Thanks, Congress! (Hat tip to all the members of the board who saw this one coming.)

>>
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
>>

BingoBank is essentially living in the equivalent of the American 1970s, so it works something like this:

a) There is an annual fee. Deal. If you have one of the premium cards, the annual fee is significant ($500), otherwise it is fairly reasonable ($10 on my card).

b) You can choose to use the card as a charge card (payment due on the 15th of next month in full) or a credit card (like you would use an American credit card). If you use it as credit, interest accrues immediately. There is no grace period. You can retroactively reclassify a charge as a credit charge -- if so, we'll retroactively charge you interest from the charge and a fee for reclassification.

c) There is a rewards program. It works out to about 0.8% cashback.

It isn't the end of the world by any means but, gah, it is a nuisance.
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Author: 492dea Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288240 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 2:44 AM
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From the article: “There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.

People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.

“Despite all the terrible things that have been said, you’re making out like a bandit,” he said.



Ok, the bold part? I totally disagree. The rewards come out of the merchant fees that the banks collect. Oh yeah, the banks RAISED the merchant fees to cover the rewards, so the cost of rewards are passed on to the merchants...who in turn raised prices on their merchandise. Guess what? Now we are ALL paying for the perks. That's the opposite of making out like a bandit.

492dea

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288248 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 8:49 AM
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From the article:

Banks used to give credit cards only to the best consumers and charge them a flat interest rate of about 20 percent and an annual fee. But with the relaxing of usury laws in some states, and the ready availability of credit scores in the late 1980s, banks began offering cards with a variety of different interest rates and fees, tying the pricing to the credit risk of the cardholder.

When I became an adult, it was difficult to get a general-use credit card. Just about anyone could get a gas card or a store card, but not everyone could get a BankAmericard (precursor to Visa).

It wasn't such a bad social model. It's unlikely we'll go all the way back there, because society has changed to make credit cards more useful and universal. Among the changes are electronic swipes instead of carbon-paper imprints; social acceptance of cards for smaller transactions; and cards as a primary payment model at merchants with high transaction volumes.

I see good things and bad things in the changes as I know about them now. My comments on the major changes as reported in this morning's WSJ:

No changes on interest rates for existing balances unless the the card is 60 days delinquent: Ehh, so-so. I like the no changes on rates unless delinquent, but I think 60 days gives the deadbeat too much room. 30 days should be sufficient to allow for a few honest mistakes. And forcing the rate back down for 6 months of on time payments is silly.

Payments above the minimum apply first to balance with highest interest rate: A punishment of card issuers for the reverse, applying payments first to balances with the lowest rate. When combined with the previous requirement, unfair to the card issuers. I think this goes overboard. Forcing the payments to be applied in a FIFO manner would be more fair; that would benefit people with improving credit and hurt people with declining credit.

No rate increases for first year, and promo rates must last at least 6 months: I like this. The issuer must honor the terms the applicant signed for a reasonable period, but isn't locked into them forever.

Bills must be sent 21 days before the due date: This is a reasonable consumer protection that shouldn't be a big deal for the card issuers.

Charges that would put the card over-limit must be declined unless the cardholder has signed to allow them and the resulting overlimit fee: Sigh. Regulating into existence what ought to have been standard practice all along. As near as I can tell, there can still be overlimit fees when someone charges near the limit and the interest pushes them over.

No cards for minors without a co-signer or proof of ability to pay: Another case of regulating into existence what ought to have been standard credit underwriting practice.

It's a mixed bag. What do I expect to happen? Certainly rewards will get less generous. We've seen that starting to happen already. Given the combination of no changes to rates on existing balances and payments above the minimum going to the highest rate, I expect that people with poor credit will see their credit limits moving down with their balances. It will probably become harder to get a credit card, which isn't entirely a bad thing.

The things that could happen to annoy me are annual fees and elimination of the grace period. If the grace period is eliminated, I have to figure out if I can avoid interest by paying the card before the charge posts. If it becomes impossible to get a card without an annual fee, I have fewer cards and become selective about what cards I keep.

The credit card market will certainly change, and the deal I get from credit cards will certainly be less good than it has been. It remains to be seen whether the deal will be so bad that I have to find alternate forms of payment for everything I use cards for now.

Patzer

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288254 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 9:43 AM
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I don't know about you, but I prefer going back to a $30-50 annual fee for a cc, over giving anyone under the sun huge amounts of credit just so they can buy a bunch of stuff, buy a house for no credit, declare bankruptcy, walk away from the house, and end up leaving responsbile taxpayers basically on the hook unless they want the economy to totally collapse.

Responsible people will ALWAYS be effected by the irresponsbile behavior of others -- so personally I prefer limiting the behavior of those who are irresponsible so as not to have as large an effect on me.

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Author: artemis021 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288262 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 10:07 AM
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Congress in its infinite wisdom has decided to force the banks to charge subprime customers less and the rest of us more. Thanks, Congress!

I don't remember reading the provision where Congress is "forcing" the banks to charge the people who carry no interest on their balances more. Actually, I'm pretty sure that's not part of the bill.

That's something that the CC companies came up with all on their own.


Right now, people who are getting the free airline tickets or cash back while paying no late fees and paying no interest are the one who are kind of being subsidized by the people who are paying 30% interest and $35 late fees or $15 pay-by-phone fees.

Incidentally, originally, the CC companies got the vast majority of their money from merchant fees. It was only later they realized by jacking up interest rates to usurious levels and imposing inflated fees for stupid stuff would be a cash cow to them.

I understand that people who are getting the free ride-the 1% cash back while paying nothing to the CC companies-are upset by these changes, but what the CC companies were doing was fundamentally unfair.


The CC companies could, incidentally, just decide to change all cardholder's interest rates to 32% (still legal with proper notice) or maybe even 64% (I think even this is legal for non-military people) and then they could probably keep the rewards in tact for those who only make the CC companies profit via merchant fees.

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Author: KyleJRM Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288264 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 10:10 AM
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"I don't remember reading the provision where Congress is "forcing" the banks to charge the people who carry no interest on their balances more. Actually, I'm pretty sure that's not part of the bill.

That's something that the CC companies came up with all on their own."

This.

Credit cards have been giving absurdly good deals to responsible people for years because they know that if for every responsible person they subsidize, they'll find five less responsible people to make money off of, so it made sense to cast as wide a net as possible by offering great deals.

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288265 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 10:34 AM
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I don't know about you, but I prefer going back to a $30-50 annual fee for a cc, over giving anyone under the sun huge amounts of credit just so they can buy a bunch of stuff, buy a house for no credit, declare bankruptcy, walk away from the house, and end up leaving responsbile taxpayers basically on the hook unless they want the economy to totally collapse.

You are mixing bad mortgage lending practices with credit cards.

I have a problem with annual fees being used to support people who are reckless with their credit. This has been floated for awhile that those who are responsible with credit should pay for those who have recklessly spent. Rewards are going to be decreasing. If they don't produce sufficient revenue, then they are going end.

Debra

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Author: KyleJRM Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288266 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 10:35 AM
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"I have a problem with annual fees being used to support people who are reckless with their credit. This has been floated for awhile that those who are responsible with credit should pay for those who have recklessly spent. Rewards are going to be decreasing. If they don't produce sufficient revenue, then they are going end. "

Losing a reward isn't "paying," especially since the only reason those rewards existed was the hope of luring more irresponsible people.

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288269 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 10:45 AM
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Losing a reward isn't "paying," especially since the only reason those rewards existed was the hope of luring more irresponsible people.

Maybe making the statements separate paragraphs would have been better.

I object to paying an annual fee to support the irresponsible.

Rewards have been nice, but I don't see their loss as supporting the reckless. More that the irreponsible have been supporting the rewards programs.

Debra

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288270 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 10:48 AM
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Look, I like my cash back rewards as much as the next person, but it's an optional feature of a card, and it's up to the CC's to offer it. If they don't want to, then fine. I don't see that I have "right" to have it, and if I don't have it then I'm paying for deadbeats. It's like saying that airlines have to offer me a meal when I fly short hops. Errrrrr...no, they don't. They only do if it works with their business model. I've adapted to that and now bring food. If CC's don't want to offer cash back because it doesn't work with their business model, then OK.

Of course, if there are still any CC companies offering cash back, I will change to those cards. I have no problem doing that. No fuss, no muss. But if not, then no big deal.

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288271 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 10:51 AM
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Credit cards have been giving absurdly good deals to responsible people for years because they know that if for every responsible person they subsidize, they'll find five less responsible people to make money off of, so it made sense to cast as wide a net as possible by offering great deals.

I use my credit cards enough that the credit card processing food chain is making money. I have never trusted the process sufficiently to try to make money off of low rate "balance transfers." You don't have to be irresponsible for credit cards to generate revenue, but being irresponsible generates much more revenue.

Debra

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Author: Lea77 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288275 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 11:01 AM
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elimination of the grace period

This is the biggest potential problem for me. If they eliminate my grace period, I think I'm out. Why would congress think that would be a good idea? They are going to piss a ton of people off.

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288276 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 11:06 AM
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The things that could happen to annoy me are annual fees and elimination of the grace period. If the grace period is eliminated, I have to figure out if I can avoid interest by paying the card before the charge posts. If it becomes impossible to get a card without an annual fee, I have fewer cards and become selective about what cards I keep.

This is exactly the behavior that they are encouraging.

Debra

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288277 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 11:08 AM
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elimination of the grace period

This is the biggest potential problem for me. If they eliminate my grace period, I think I'm out. Why would congress think that would be a good idea? They are going to piss a ton of people off.


Congress doesn't require this. I'm thinking off the top of my head what corporate managements might come up with to make up the lost revenue from complying with what Congress did require. That's how Corporate managements tend to think--such and such is going to cut our revenue, how can we make it up so the Street still sees us as growing?

If we're lucky, competition will keep grace periods around. If we're not lucky, I'll deal with using other forms of payment for lots of stuff I use a credit card for now.

Patzer

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Author: jeffbrig Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288278 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 11:08 AM
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Right now, people who are getting the free airline tickets or cash back while paying no late fees and paying no interest are the one who are kind of being subsidized by the people who are paying 30% interest and $35 late fees or $15 pay-by-phone fees.

Well, I'm one of the people getting a huge cashback bonus, but it wasn't subsidized by anyone paying interset or fees. The merchant fees generated are roughly double the cashback award I receive.

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Author: llambe Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288281 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 11:33 AM
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elimination of the grace period.

My CC company will be losing all my merchant processing fees if they implement this one - because I won't be using it anymore.

Hopefully, that will happen enough that they'll wise up to the money they ARE making off the supposed "free loaders" and put grace periods back in place.

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Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288283 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 11:35 AM
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This is the biggest potential problem for me. If they eliminate my grace period, I think I'm out. Why would congress think that would be a good idea? They are going to piss a ton of people off.

Where are you seeing this? I've looked at the list of changes and I'm not finding anything about the grace period, just that they now have to give 21 days to pay the bill, instead of the 12 days AT&T was getting down to.

Where is the part about the grace period being slashed?

Nancy

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288289 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 12:14 PM
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Where is the part about the grace period being slashed?

It's in the article that I posted about here http://boards.fool.com/Message.asp?mid=27689573&sort=use...

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Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288292 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 12:22 PM
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It's in the article that I posted about here

But that's what banks are likely to do. People were asking why Congress was doing this, and I couldn't follow their reasoning.

I'm trying to remember my first credit card. My credit union split their credit cards into two blocks. One kind had a grace period and an annual fee of $15.00, the other was free (in terms of paying for it annually) but had no grace period. I suspect that we'll see similar offers very soon.

Nancy
who paid the annual fee.

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Author: vickifool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288301 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 12:56 PM
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No grace period means every purchase is treated as a cash advance. Interest from the date it happened.


Vickifool

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288303 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 1:07 PM
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Rewards are going to be decreasing. If they don't produce sufficient revenue, then they are going end.

Rewards didn't always exist for credit cards. Again, I prefer going back to traditional "credit is hard to get, maybe you have to pay $30-50/year for a credit card" models over giving credit to anyone, which responsible people do in the end end up paying more for.

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Author: artemis021 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288304 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 1:08 PM
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Well, I'm one of the people getting a huge cashback bonus, but it wasn't subsidized by anyone paying interset or fees. The merchant fees generated are roughly double the cashback award I receive.


The CC companies are taking the position that since some of their unreasonable-but-profitable practices are now going to be curbed, they *have* to cut some of the advantages the perfect payers get. As if they don't get enough profit from the merchant fees already and would have to go out of business because of these regulatiIons unless they changed the perks.

And, if they actually are, then you are indeed being subsidized. It's possible that the half the merchant fees aren't enough to keep CC companies from being profitable. Or profitable enough for them to keep doing it, at least.

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288306 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 1:11 PM
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I use my credit cards enough that the credit card processing food chain is making money.

So what about the person who is responsible but has chosen to pay cash for all purchases. They now pay more because the merchant accepts credit cards and must charge the same price to all payers, cash or credit. Do you care that cash-paying buyers have been subsidizing your paying with a credit card? It's probably something you've never thought of until now. Why should they have to pay higher prices just because you want to pay with a credit card?

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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288326 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 2:50 PM
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>>>>Losing a reward isn't "paying," especially since the only reason those rewards existed was the hope of luring more irresponsible people.<<<<<


Look at your total situation and you bet your bippy it is.

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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288327 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 2:54 PM
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>>>>Again, I prefer going back to traditional "credit is hard to get, maybe you have to pay $30-50/year for a credit card" models over giving credit to anyone, which responsible people do in the end end up paying more for.<<<<


Then do it.

make it hard for YOU to get credit.
send in a annual fee each year. The card companies will not turn it down.

JUST DON'T FORCE IT ON EVERYONE ELSE.

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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288329 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 2:59 PM
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>>>>So what about the person who is responsible but has chosen to pay cash for all purchases. They now pay more because the merchant accepts credit cards and must charge the same price to all payers, cash or credit. Do you care that cash-paying buyers have been subsidizing your paying with a credit card? It's probably something you've never thought of until now. Why should they have to pay higher prices just because you want to pay with a credit card?<<<<


But I do not see anyone trying to regulate that practice. Only interfere with an agreement I have made with a card company.

If you do not want to pay the extra then do not shop at a store that takes credit cards. Oh wait, those all tend to charge much more for the same items. Seems your argument about "passing" on those cost does not make sense.

Some of the original reasons that stores started taking credit:

More sales as people had more effective pruchasing power. (Benifit to the stores.)
Less cost for handling money. Not as much cash, fewer checks and associated bouncing checks etc. (Benifit to the stores.)

So effectively the stores are coming out a head. Take away credit cards and these benefits are lost to the stores and (dare I say it) prices would go up to offset.

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Author: Lea77 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288344 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 4:11 PM
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Where is the part about the grace period being slashed?

Sorry, the grace period bit is speculation, not fact, I just wasn’t very clear in my wording. I guess I should blame congress for something that hasn’t happened yet, but if it does happen I will blame them.

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288346 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 4:30 PM
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But I do not see anyone trying to regulate that practice.

It's already been regulated since for most merchants they cannot change the price of an item based on the form of payment a customer is using.

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288347 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 4:31 PM
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JUST DON'T FORCE IT ON EVERYONE ELSE.

As a taxpayer, I'm already being forced to pay off the irresponsible behavior of some. So I plan to vote in a way that supports making credit harder to get for those who aren't responsible. You're free to vote anyway you want.

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Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288350 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 4:40 PM
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It's already been regulated since for most merchants they cannot change the price of an item based on the form of payment a customer is using.

The merchants aren't allowed to charge more for using a credit card, no. But in general they are allowed to give discounts for using cash. In fact, a couple of senators wanted to add that to the law; that using cash and debit cards could be priced differently. They thought that offering a discount for cash might lure more people away from the constant use of credit cards.

Their suggestion didn't make it through committee, of course.

Nancy

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288351 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 6:16 PM
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So what about the person who is responsible but has chosen to pay cash for all purchases. They now pay more because the merchant accepts credit cards and must charge the same price to all payers, cash or credit. Do you care that cash-paying buyers have been subsidizing your paying with a credit card? It's probably something you've never thought of until now. Why should they have to pay higher prices just because you want to pay with a credit card?

Cash isn't free for merchants to handle. Theft, conterfeiting, if the store is large enough the cost of having armed car pickup, and there is some personal risk in taking cash to the bank to deposit.

The only time I feel guilty about using credit is if it is a small transaction and the merchant provides a way to use cash. I try to avoid credit for small transactions.

The Post Office has replaced their vending machines with postage centers. No cash is accepted. It is a situation where small transactions are common and they choose not to deal with cash.

Debra

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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288360 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/20/2009 11:59 PM
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>>>>It's already been regulated since for most merchants they cannot change the price of an item based on the form of payment a customer is using.<<<<


No it contractually controlled NOT regulated by a governmental organization.

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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288361 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/21/2009 12:02 AM
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>>>>As a taxpayer, I'm already being forced to pay off the irresponsible behavior of some. So I plan to vote in a way that supports making credit harder to get for those who aren't responsible. You're free to vote anyway you want.<<<


Sure vote anyway you want.

But supporting the restriction of others rights because yours were taken seems a bit like we are going the wrong way. What happened to standing up for principle?

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288376 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/21/2009 1:28 PM
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But supporting the restriction of others rights because yours were taken seems a bit like we are going the wrong way. What happened to standing up for principle?

I don't see it as an issue of principle. If you don't like a cc company's rule changes, you don't have to do business with that credit card. If you don't like ANY credit card company's business practices, you have the choice not to do business with any of them. But we're long past the "laissez-faire" form of government when it comes to business.

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Author: DrBooa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288387 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/21/2009 3:40 PM
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>>>>As a taxpayer, I'm already being forced to pay off the irresponsible behavior of some. So I plan to vote in a way that supports making credit harder to get for those who aren't responsible. You're free to vote anyway you want.<<<


Sure vote anyway you want.

But supporting the restriction of others rights because yours were taken seems a bit like we are going the wrong way. What happened to standing up for principle?


What rights, exactly, are being restricted? The bill of rights doesn't say anything about credit being offered, does it? Does it say something about the rights of credit card companies to price loans based on risk? What principles are you referring to?


--Booa

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Author: KyleJRM Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288388 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/21/2009 3:53 PM
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"What rights, exactly, are being restricted? The bill of rights doesn't say anything about credit being offered, does it? Does it say something about the rights of credit card companies to price loans based on risk? What principles are you referring to?"

The right to enter contracts with other private parties, I would imagine. To some, that's pretty darned important.

(Not so much me, personally, but I'm not of that political bent).

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Author: DrBooa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288389 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/21/2009 4:15 PM
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"What rights, exactly, are being restricted? The bill of rights doesn't say anything about credit being offered, does it? Does it say something about the rights of credit card companies to price loans based on risk? What principles are you referring to?"

------------------------------------------------------------

The right to enter contracts with other private parties, I would imagine. To some, that's pretty darned important.

(Not so much me, personally, but I'm not of that political bent).


Ah, thanks for clarifying. So, by restricting what the credit card companies can do, they are restricting the rights of someone to enter into a private contract with a CC company? I'm just trying to understand the thought process. But surely that right isn't so broad as to apply to *any* contract--I mean, I can't decide to auction my son's organs on eBay. But I can see where the basis for the comment is now, thanks.


--Booa

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Author: KyleJRM Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288390 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/21/2009 4:23 PM
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"Ah, thanks for clarifying. So, by restricting what the credit card companies can do, they are restricting the rights of someone to enter into a private contract with a CC company? I'm just trying to understand the thought process. But surely that right isn't so broad as to apply to *any* contract--I mean, I can't decide to auction my son's organs on eBay. But I can see where the basis for the comment is now, thanks."

Well, there's two problems with auctioning your son's organs. First, you are now involving him, and I don't know if he's giving consent (or is even capable of it, legally, being a minor). And second, eBay is a party to this, and they'd probably frown on it.

But to sell your own organs to someone else directly? Yeah, there's lots of people would be against the government regulating it.

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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288420 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 5/22/2009 11:13 AM
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<<<<<<Does it say something about the rights of credit card companies to price loans based on risk? >>>>


Indirectly yes it does. They must wait 60 days past due to raise rates, can not have universal default clause, etc.

And no I do not support complete lack of regulation but I suggest that it be very limited and rare, because I believe that most often it creates more problems than it "fixes."

I get your reference to selling ones organs, but I see a clear difference between a purely financial contract and one that involves "physical" risk to one party or the other, i.e. selling ones organs vs. agreeing to double cycle billing because you find it advantageous to you.

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Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288864 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 6/4/2009 4:12 PM
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Less cost for handling money. Not as much cash, fewer checks and associated bouncing checks etc. (Benifit to the stores.)


Just had to add less petty/employee theft.

Less human error in making change.

Less cash for a thief to steal. They can take merchandise and the cash int he drawer, but those little signed slips of paper don't net them anything.

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 288865 of 308687
Subject: Re: Your rates are increasing. Thanks, Congress Date: 6/4/2009 4:16 PM
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>> Less cash for a thief to steal. They can take merchandise and the cash int he drawer, but those little signed slips of paper don't net them anything. <<

I think this is one reason why some merchants (particularly supermarkets) are willing to serve as "no-fee ATMs" by letting you get cash back from a PIN-based debit card purchase. As long as they have enough cash on hand to make routine change, the less cash in the till, the less that is lost in a robbery.

#29

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