Reforms Looming, Card Issuers Hike Fees

(CBS)  Help is one the way for struggling credit card holders. Starting today companies must give consumers 45 days notice of any rate increases instead of 15 days. Consumers can opt out and pay their balances off at the lower rate. Companies also must send statements 21 days before payment is due, instead of 14 days.

It's just the beginning of a slew of new reforms. But, as CBS News correspondent Kelly Wallace reports, credit card companies are trying to make as much money as they can now - before the new rules take effect.

The companies say they're just adjusting to the marketplace. But consumers say it's a money grab.

Outside Tampa, Pam and Joe Fortune never missed a payment, but still saw their interest rates on one of their Bank of America cards more than double to 39 percent.

"I feel that it's a sad state of affairs when we bail out Bank of America and they turn around to make money on us," Joe Fortune said.

Card issuers appear to be locking in profits before the toughest limits on interest rates hikes and fees begin next February.

Since President Obama signed the reforms into law, the average variable rate has increased from 10.8 percent to 11.2 percent. A new report today finds credit limits have been slashed for 33 million people - half of them with excellent credit scores.

"I don't think we've seen the end of the reign of terror of credit card companies," said Adam Levin, founder of Credit.com.

According to BillShrink.com, Capital One has increased its interest rates to almost 12 percent. Discover has hiked fees 30 percent. And Citigroup is beginning to add new annual fees, some in excess of $30.

But the industry denies it's waging a pre-emptive strike to cash in before all the rules kick in.

"That's a red herring," said Scott Talbott of the Financial Services Roundtable. "The two main factors in changing the interest rate or your credit limit are the customer's risk profile as well as general economic lending conditions. That's what's driving the train here."

That also may be driving people like Daisy Mitchell out of business.

When Chase raised Mitchell's credit card rates from 10 to 14 percent, she says she was forced to shut down her children's boutique near Orlando.

"At first I thought, 'Is this even legal?'" Mitchell said. "I lost everything, apparently for no reason."

The new rules are designed to protect consumers. But before the strictest reforms take effect, consumers may find themselves more vulnerable than ever before.

[mettre]

credit card payment online find all article about How And Why Pay Your Bills Online !
http://WWW.mettre.org

[jaymic24]

loan sharks...(if you play with snakes....)Cut up you credit cards, bite the bullet and live within your means..its not fun but the only way to survive now..

[h_blankett]

This past May, Sen. Bernie Sanders (I-Vermont) tried to get legislation passed which would have capped credit card interest rates at 14%; however, every single Republican and most of the more corporate Democrats voted against the bill. http://washingtonindependent.com/42885/senate-shoots-down-rate-caps-on-credit-cards

[Ace22257]

The best thing that i ever did was cut up all of my credit cards YEARS ago. I haven't had any since nor will i ever have another. I was never the type to live on borrowed money. If i couldn't afford it i dont buy it. Believe it or not but yes...it is quite possible to live a comfortable life this way. I have a MasterCard Check Card that can be used ONLY when i have the funds in my checking account. I dont have a need for anything else. Too many people live beyond their means and that eventually just leads you to trouble......

[reform21]

"We have arrived at a generational crossroads where wasteful, inefficient medicine meets an aging population. We must make it through to the other side as a whole nation.

"It's estimated that 2.5 million unnecessary surgeries are performed each year, with hysterectomies, heart bypass grafts, lower back surgery, and angioplasty leading the list."

"If you pay your doctor a visit tomorrow, you have a 43 percent chance of being given an unnecessary test"

"If you have a cold or flu, there's a 73 percentchance that you will be prescribed an antibiotic, which is useless against viruses, including cold and flu viruses."

"Provide a public option so that private insurers don't have the profits game entirely to themselves. Not only will a public option be cheaper, but it starts to remove the cutthroat profit motive in healthcare insurance to a more sensible and ethical motive of improving people's health and wellbeing."

"the richest nation in the world is paying more for less when it comes to health care than United State of America. The U.S. ranks 37th in overall health system performance in the world by the WHO while paying far and away the biggest bill. What we need is not more unnecessary tests, which cost an estimated $700 billion dollars a year, but more intelligence and a public option is the best solution."


Doctors are paid by the procedure, so it is only natural they (or most or some or the unscrupulous, fill in the blank) tend toward more is better. No one is surprised that an auto mechanic recommends an expensive part with high margins, or that a plumber will just as happily replace the toilet as soon as he would the little 2 dollar rubber gasket that's causing your leak.

And the 'More is Better' mantra is also clearly at work in the rtate at which doctors prescribe drugs. My mother is pushing 80 and had serious problems with diabetes and her heart. So granted, she needs some prescriptions to help deal with her conditions. But she is currently taking 14 different drugs, at last count. I'm no doctor, and had to drop Human Physiology in college (knew after the first mid-term I was in over my head and dropped it quick!), but 14 prescriptions certainly seems extreme. How can anybody know what effect that many drugs combined will have? She's always compaining of being light-headed, dizzy, weak, lethargic, etc. I can't help thinking that her drugs are at least partly to blame for her general feeling of ill-health.

I myself went for standard check-up a few years ago. I'm generally healthy and active with no real complaints, yet I was given not one but two prescriptions (for slightly elevated blood pressure- slightly elevated, I was nowhere near any danger zone in that regard). Neither drug did a thing for me, and one even made me feel loopy when I took it. I never re-filled either prescription (the loopy one I never even finished) and although I'm nearing 50 I've never felt better. I can't help wondering how much of a kick back that doctor received by prescribing those two drugs I clearly did not need?

The health care fight has turned ugly and fast, watch ?Brave New Films? to find out how much United Health Care CEO make money of you.

[datamaven2]

Jeez - when did America morph from being the land of opportunity to the land of living beyond your means for free.

Credit card use isn't mandatory, and no one is forced to carry a balance. If you choose to borrow money from a lender who caters to high risk clients you will share the risk burden.

Credit card companies are not evil or predatory or mean, they are a business that provides a service for a fee. The more clients are late or default, the more the other clients have to pay.

Don't carry a balance and you will not have to pay higher fees. If you can't pay off your balance when the bill arrives, do not buy what you can't afford. I grew up destitute and now have significant real estate and financial assets and I still live by this simple rule.

[hungry1968-16]

by formrusmcsgt August 21, 2009 9:58 AM EDT
Nice that you both totally absolve perents for raising financially ignorant children....







Not absolving the parents, but what if the parents are no good at managing their finances?



Also, the parents can show their children how to manage their money, only UP TO and including what they know.

My parents always told me to invest in "savings bonds". Is that good sound financial advice today, as it was 30+ years ago? Not even close!!

[formrusmcsgt]

It's easy to tell who's up to their necks in debt here by the comments posted.

Those who stupidly owe their souls to others call them "criminals".

Those of us who don't are sitting back and laughing our a$$es off at the blatant stupidity their comments exude.....

[hungry1968-16]

by democracy1 August 21, 2009 9:28 AM EDT
Most people don't even bother to balance their checkbooks every month.






It should ALWAYS be balanced - not just once a month.

[parisdakar]

Sorry, I have no sympathy for them. Using or not using a credit card was entirely under their control.

[formrusmcsgt]

Exactly.