So, looks like the tactics employed by credit card issuers to cut lines, raise rates, and change terms before the Credit CARD Act goes into effect in 2010 may have backfired:
And the remaining provisions would be in effect within 30-45 days (couldn't find the current proposed date for the entire bill to be enacted)
Would this mean any balances held on cards with promotion AOR rates between say 0 and 3.9% be locked in until that balance is paid off? Or does it simply mean the current non-promotional interest rate couldn't be hiked after the promotional period ended?
If so, this would be a very accidental and generous benefit bestowed upon FW.
My reading is whatever the rate is when the legislation is signed by Obama is the rate that balance will carry until it's paid off, while there would be different terms for new charges.
To enter a coupon code in your post please enter the following info:
Coupon Code:
Coupon Offer:
Merchant:
Expires (optional):
Restrictions (optional):
saving...
Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
I don't think it will affect promotional rates. My understanding is that they just cannot arbitrarily change the regular interest rate on a previous balance. The CC companies have known about these regulations going into effect for a while. For instance, I have a card that I got in March of this year that is 0% through May of '10. While I would love for the existing balance to stay at 0% indefinately on that card, I doubt they would still be making low intro-APR offers if they knew that any existing balance would be locked in at 0%. Basically, I can't see the CC companies voluntarily accepting all the risk without the ability to gain anything.
"Cardholders Deserve Protections against Arbitrary Interest Rate Increases. .... * Gives cardholders the right to cancel their card and pay off their existing balance at the existing interest rate and repayment schedule if they get hit with an interest rate hike; gives cardholders 3 billing cycles after the rate increase to say no to these new terms."
Does that not mean I can cancel an AOR credit card and they must let me pay off the balance at the existing 0 to 4-5% rate?
Message edited by: larrytrain on 2009-11-09 15:08:38 CST
I'd still say "no" in that they are not arbitrarily raising interest rates, but rather doing exactly what they said they would do in their contract with the cardholder.
one2gofst said:I'd still say "no" in that they are not arbitrarily raising interest rates, but rather doing exactly what they said they would do in their contract with the cardholder.
Because credit card issuers and holders are knowledgeable parties who have equal bargaining power when entering into a contract?
Certainly. If one does not investigate what the post-into-APR is, then they are at fault. As far as equal bargaining power, one can always not enter into the contract. If I were to offer a service to you and named my introductory price and my standard price which would take effect after a specified period of time, you and I have equal bargaining power. I could refuse to budge on myprce, which you may well believe to be too high, and you could walk away.
Some may say "but people need credit so they can't just walk away". You may well "need" the service I offer. However, That does not make our hypothetical negotiation unfair to either party.
larrytrain said:Does that not mean I can cancel an AOR credit card and they must let me pay off the balance at the existing 0 to 4-5% rate? It looks that way.
Its possible you can close the cards and lock in the 0 percent rate.... Sone cc issuers just might do this to avoid the wrath of regulators
But i think this only applies to rate changes that normally require a change in terms notice.... A reversion of promo rate to standard rates does not require a change in terms notice, and variable rate cards dont need to sebd a change in terms notice when the underlying index adjusts
At this point, it is just "smoke and mirrors". Most if the issuers have acted. Somebody discovered the horse is gone, so they are closing the barn door.
Does anyone know when the universal default clause is going away? There was much publicity and news coverage about this but nowhere in the target implementation dates I could find when this particular practice will be a thing of the past. Anyone?
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
