Thursday, May 21, 2009

What the New Credit Card Change Could Mean to You

Personally I think the "late payment" provisions of this legislation need to be made clearer. Some of the concerns raised in my previous credit card post, about companies arbitrarily moving payment due dates, have been addressed.

In theory, it looks like the concept of grace periods have been re-established, but to say payment must be due "21 days after mailing" seems strange.

There also needs to be some consistency about what constitutes being "30-days delinquent." Suppose I charge something on the 1st, the day before my statement cycles. I get a statement the following week with a payment due date of the end of the month. If miss that payment, am I really 30 days delinquent?

Yes, according to Bank of America, which holds my FIA card services credit card. For the record, overnight FIA recently nearly doubled my monthly payment, changing it from normally ranging around $125 to a whopping $250 a month. While they were at it they also increased my interest rate to 28 percent.

When I asked why, they claimed there was something "strange" in my credit profile. Knowing that not to be true, I challenged that assessment, they later claimed made a late payment -- a payment received after the due date. They failed to mention that yes, I missed the due date, but I also paid off the balance. My pay off check arrived a day or so after the due date. The next month, I used the card again.

For me the fundamental principle of offering credit cards with hopes they go into default should be outlawed. To design cards in a way that rewards looking for creative ways to make consumers delinquent is not only unfair but should be unethical. I don't care that card companies make money on getting investors to buy their credit portfolios.

Still checking for a list of congressmen who voted "no" on the house version of this bill.

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