Deseret News | Credit CARD Act has unintended consequences

Reader comments
Lois M. Collins: Credit CARD Act has unintended consequences

CJ3 | 9:16 a.m. Oct. 22, 2009

There's even more to it than that.

My credit card bill was always due on the same day, for years, and I always paid it within the 3-day grace period.

A few months ago I received a call from the institution stating that the grace period was being dropped, and if I didn't want to be delinquent I'd have to pay it by the due date.

Delinquent includes a single second after the midnight, on the due date -no wiggle room.

No problem, I'll just be sure to pay it on the day it's due, I thought, to avoid the nightmare interest rate hike.

Thing is, that same due day I'd had for years suddenly started fluctuating dates, resulting in "delinquency" within a two-month cycle.
Payments tripled.

They don't play fair, and wll be losing my business.

CJ3 | 9:23 a.m. Oct. 22, 2009

I should also mention that they dropped all mailed notices, going strictly online with notices, to save money. This happened to coincide with my computer giving up on me, leaving my only access online on a mobile unit. The system is not compatible, so I was unable to check my account without waiting for a service rep, or going into a branch.

Unfortunate circumstances, that have cost me.

Anonymous | 1:07 p.m. Oct. 22, 2009

They lost my business years ago, and they're clearly not interested in winning it back...

Comments continue below

Loophole | 1:25 p.m. Oct. 22, 2009

Credit Card companies are not registered foriegn corporations in Utah (they would have to pay Utah taxes). As such, they can not legally take you to court (in Utah) for debt collection!

To sue someone (to recover a debt), a corporation MUST be registered. However, if you sue them, they can appear and defend without being registered.

Funny | 2:49 p.m. Oct. 22, 2009

The government once again meddles in what is a highly competitive market (consumer credit cards)and the banks react to protect themselves. What is funny is that everyone blames the banks. Had the government not got involved, none of you would have experienced these "problems."

@CJ3, I am not sure you are telling the complete truth. What you describe is presently illeagal and will continue to be illeagal.

I'm so over these thugs | 3:02 p.m. Oct. 22, 2009

If everyone opts out, they'll have to change their practices.

Dave | 4:42 p.m. Oct. 22, 2009

To Funny 2:49pm:

"Had the government not got involved, none of you would have experienced these "problems."

You have got to be kidding right???? Why do you think the Government got involved in the first place, Because the Credit Card companies were already starting to raise rates, rates late fees, etc....

CJ3 | 4:42 p.m. Oct. 22, 2009

Not true? Would you like to have a look at my payment record?

Your "government meddles" comment clearly exposes you as working for the industry.

Funny | 10:48 p.m. Oct. 22, 2009

@Dave

Unfortunately, you and many Americans are quick to blame the banks and slow to blame people who don't manage their money well.

Let me educate you on what exactly is going to happent thanks to the UDAP changes:

1) Since banks will no longer be able to have penalty pricing as soon as cardholders miss payments, subprime applications simply wont be able to get cards anymore. They can only penalty price at 60 days delinquent now. Guess what, 80%+ of cardholders delq over 60 days charge off anyway.

2) Banks are required to apply payments to the highest APR balance instead of the lowest. Guess what, no more low rate offers.

Consumer credit cards are not a monopolized industry. There are hundreds of competitors. All these changes will accomplish is the exact opposite of what they are intended to do. Subprime borrowers will be denied credit. Banks are not in the lending business for cookies. They expect profits.

CJ3 | 8:48 a.m. Oct. 23, 2009

" They can only penalty price at 60 days delinquent now."

That's not true. Pay one day late twice in a six-month period and your rates leap. This also true of loans from banks. I know, it's happened to me twice. The credit companies use loopholes to play by their own rules.

Exampl; In an effort to pay off a loan faster, I had made payments twice a month a few times in a span of months. However, the system only allows for only one payment a month, only caring about what day it was due the first time.

Since I thought I was well ahead, due to paying twice a month, I payed little attention to what day I was doing it. One day, my payment amount went up by 1-and-1/2 times, so I inquired as to how that could happen. When it was looked up, the system said I was delinquent, and as a result my interest rate skyrocketed. It took 3 MONTHS for them to re-credit my payments and lower my rate.

@ Funny | 9:06 a.m. Oct. 23, 2009

My turn to educate you.

What has happened is that top lenders have changed the fine print on their customers. They have redefined the terms 'default' and 'delinquent' to take advantage of the current laws and will do so again, under the new ones scheduled to take effect in February.

Digerati | 11:36 a.m. Oct. 23, 2009

To Funny:

Let's see the banks ASKED for money from us, the people of the United States, via the the government. We loaned out money to them at a 0 percent rate. They come back and raised everybody's rates and cut credit limits. Even the people that had a long history with the banks that had no delinquency, etc. had their rates raised and limits cut.

Can you tell me how we CAN'T blame the banks.

Brian | 11:40 a.m. Oct. 23, 2009

Those of us who do have credit cards should be aware that the companies are working overtime to devise new and clever ways to fleece the flock. One method is to make the credit card payment due by 1:00 East Coast time. You phone your payment in on the "due date" and get a late fee and a hit to you interest rate because you make the payment after the 1:00 East Coast time.

Another beauty is your due date falls on a Saturday or Sunday and you phone it in on time but it isn't credited until the following Monday so again a late fee with a raise to your interest rate!

Zadruga Guy | 2:44 p.m. Oct. 23, 2009

The government fixed something that wasn't broken when they enacted the recent reforms. Credit card companies have always informed people in writing as to the terms and conditions of the offers they were making. The problem was, people were signing up for cards without fully reading and understanding those terms. No one had a gun held to their head forcing them to accept an offer.

The credit card problems were caused by people accepting offers that were not a good fit for them. I accept only the offers that were a good fit for me and I benefitted from them greatly. But now the party is over. In the future, credit card companies will mostly offer plain vanilla because people found their more exotic flavors to not be to their taste.

NED | 2:59 p.m. Oct. 23, 2009

BooHoo... It's always someone else's fault. If you got a card from one of the singing pirates on TV or one of their step siblings, you got what you deserved. As was stated earlier, Credit Card companies are in the business to make money. DUH.

However, it is still possible to find a decent rate on a credit card without all the back door hogwash going on in the banking world. Shop around. Find a credit union. (Not to say they're all perfect, but you have a far better possibility finding a CU card that doesn't gouge than anywhere else.) Mine still has a 8.25% rate, no fees, grace period, etc....

Funny | 3:26 p.m. Oct. 23, 2009

Some of you people have no idea what is currently legal and what the impact of the UDAP changes will be. Rest assured that you will understand a year from now when you all complain that people with low credit scores are locked out of consumer credit cards.

Funny line. | 4:34 p.m. Oct. 23, 2009

When Congress tried to make the card companies play fair

ha, ha, ha... this was the funniest line in the article... made me laugh and then cry

Don't thinmk for a moment that congress didn't know what would happen.

@ NED | 5:57 p.m. Oct. 23, 2009

"It's always someone else's fault. If you got a card from one of the singing pirates on TV or one of their step siblings, you got what you deserved."

I got mine from the institution that has had my patronage for several years. Feel better for acting holier-than-thou?

Oh, I read the fine print, was always responsible with my spending, and paid it off entirely more than a couple times.

The result? They cut my limit by 80% with no notice, long before the recession, leaving me floundering at the mechanic with no explanation as to why the card had been denied, and recently changed the terms on a whim, to protect their bad investments in irresponsible spenders living beyond their means.

Don't be suckered. The credit rating companies have you all by the shorts.

Michelle | 1:38 p.m. Oct. 24, 2009

That is why you get your credit card through your credit union. You can get an interest rate as low as 8.5%. Now that is a good deal!!

Mc | 8:33 a.m. Oct. 25, 2009

@Funny line. | 4:34 p.m "Don't think for a moment that congress didn't know what would happen."

Are you kidding me? You are giving Congress far too much credit if you think they know what will happen when they pass ANY bill. We deal with the unintended consequences of Congressional actions every day.

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