General Question

Ivy's avatar

Will the new credit card laws in the U.S. reinstate old interest rates for the customers they gouged before the new law?

Asked by Ivy (2482points) February 21st, 2010

My interest rate with Chase went from 6.7% to 24.24% overnight when I went over my limit once, by $14.00, after six years, and I’d never been late on a payment. This happened to millions of Americans and President Obama vowed to take this issue on. He did: ~ but will this new law do anything for those of us saddled with this outrageous interest on our balance?

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15 Answers

Ron_C's avatar

Actually, what I read and the notice I recieved from MasterCard, interest rates are going up to close to 30%. I am going to see if our local loan shark issues plastic. I think we can get a better rate.

The new law fits with the banking industry smoke and mirror laws that made credit card balances exempt from bankruptcy.

This is just another sign of corporate ownership if congress. 30% credit card interest rates, and 30% healt insurance premimums. Do you wonder why the middle class is shrinking?

Ivy's avatar

@Ron I heard Elizabeth Warren say last week they they’re actively targeting prudent customers in order to exploit the masses who aren’t. We really need a Chavez or a King who could galvanize people to boycott. Where did all the leaders go? For that matter, where did prudence go?

Ron_C's avatar

@Dracool those of us that don’t keep a credit card balance are considered a drag on the industry. The goal of the credit card industry is to do exactly what is happening. The intend to drain as much profit out of retail sales as possible. The idea of service is foreign to them.

We should probably do what my daughter does. She uses a card until the introductory rate expires, pays it off and gets another card. She once used a 0% interest card to buy a used car because she only wanted a year of payments and that was the simplest way to do it.

I would also like to comment on the other part of the question; why should it be easy for a person under 21 to get a credit card? That is just stupid. When my daughter went away to college, I gave her an American Express card for EMERGENCY use only. The reason I used that card was because you can’t run a balance, it has to be paid immediately. What makes today’s college students worthy or responsible enough to have a credit card in their own name? I didn’t do it, my children weren’t allowed to do it. There are too many self-indulgent parents that don’t bother to teach kids responsibility and the credit card companies come along to exploit that weakness. That is just pure and simple loan sharking and it used to be illegal.

Ivy's avatar

@Ron_C I’m sorry I lost track of this question. Good for your daughter for figuring out their game and beating them at it. My oldest grandson lives in an affluent tourist town, and is in the minority of the other high school sophomores there without at least one credit card. Most of them are driving nice SUV’s, sporting the newest cell phone, music player and clothes, so what’s a credit card (or a job!) after all that? I grew up in a blue-collar family in the 50’s and never knew one adult with a credit card. We were expected to get after school jobs and pay for our personal things as soon as we were capable, and only a handful of privileged kids ever received a car from their parents.

Back to this Chase card, it’s the second card I’ve had in my life and I got it through AARP so I could take an extended trip to Yellowstone a few years ago. Looking back, I should have taken out a small loan with my community bank but ah, hindsight:)

It’s refreshing to run across a parent who led by example and raised a responsible, savvy daughter. If I could get scammed by two reputable giants (AARP and Chase), along with millions of older citizens who got seduced by their offer of a ‘guaranteed’ 6.7% card after the 0% intro, I know these kids are going to own their soul to the company store before they’re old enough to know what is and isn’t an EMERGENCY:) To those who are given much and little is expected, drama reigns and their every want looms as an emergency in their mind. So it stands to reason that every cold hearted, money loving predator out there will target them, and while our government has been hashing out this new credit law, the predators have been developing new fineprint full of new fees and penalties.

It’s absolute loan sharking. In our high school government class they called it usuary. Funny how so much used to be illegal, huh? .. like monopolies and rigged elections. But 1,000 years ago Omar Khayam wrote to “take the cash and let the credit go.” And you, and he, are wise men to follow. Thanks, Ron.

Ron_C's avatar

@Dracool our upbringing is close to parallel. I was nervous as hell when I got my first credit card because it was required by my company. There was no interest involved because it was American Express. You paid a membership fee, and had a month to pay the bill. That is what I have done for the last almost 40 years. My wife had a Chase master card and she followed the same procedure. The only problem was that they changed due dates. She was charged $19 for a late $9 payment. We no longer have that card.

This all started when they approved allowing credit cards to be issued across state lines. What happened is that all the credit card companies moved to Idaho (I think) and Delaware where the laws. especially usury laws are lax. This translates into extreme penalty fees and 30% APR. Now the republicans want the same laws for health care insurance. The choice will be to become a slave to health insurance or dead.

I am really beginning to hate the government.

Espiritus_Corvus's avatar

If a shark were to jacked the vig on you, you have no choice but to go after him. Hurt him bad, kill him, get him out of your life. It’s the same with these suits. They think that they’re dealing with a population of middle-class suburbanite fluff and they are abusing them just like a shark at the track would, if he was stupid. I advise that, when the banks break the contract—the very banks that have already emptied the national treasury into their pockets—you walk away from them. Never give them another cent. Be out front about it. Tell them by phone, letter, and email what you are about to do. Let them know that they’ve just killed another golden goose. They will attach everything you think you own, but most Americans own nothing. They just think they do, because they happen to possess these things. Cut up the credit cards and stop payment. If you have payments on the car greater than its blue book value, park it and walk away. If you no longer have equity in your home,or it is threatened with attachment due to these actions, send the keys back to the bank and walk. Fuck ‘em. Kill the system. Live on cash. Pay cash for a used car. Buy a bicycle. Rent an apartment. Buy a cell phone that comes without a contract. Get a PO Box. Get rid of all your shit. Let the storage company deal with all that overpriced shit you’ve been paying to store. Pay off any individuals you owe, and walk away. Grow some balls and break the chains of usury. You’ll soon find that most of these chains are psychological. Be free.

Ivy's avatar

@Ron_C I’ve hated the government since the coup in Dallas in ‘63. LBJ and Nixon killed any credibility for the myths we were raised on, but society hadn’t completely lost its mind yet. The Deep Sleep didn’t seem to fully descend until Reagan and the ‘glam’ 80’s, and credit entered our lives in easier and easier ways, until charging, on interest, a coke and a bag of chips became reasonable and normal for millions of people. Hating the government comes easy, but I can’t figure out how to feel about our society. As a parent and grandparent, it’s damn worrisome and sad; and as a citizen, it makes me want to start locking people in a room with nothing but a good chair and a copy of “Lies My Teacher Told Me; Everything Your American History Textbook Got Wrong.” But overall, it seems to make those of us who can see the handwriting on the wall feel powerless to change the inevitable, and that’s the most sickening feeling of all.

@Espiritus_Corvus As you’ve taught me so much of the truth about the Federal Reserve, I know you know that our entire money system (since our Revolution) has been psychological, and played for or against us according to the needs (or wants) of those who printed it. And though I agree with what you’ve suggested for those who own mortgages worth more than their home or have bankrupted themselves with credit, it goes back to what Ron and I were discussing about the still prudent Americans who own homes with a great deal of equity, have kept their debt down and their credit good, but are being legally targeted by these bastions of greed, lust, and several other of the 7 deadly sins. As above so below; if these soulless banking vultures get to walk away from their guilt and debt, then it follows that the masses who were unwise and irresponsible in their personal finances should follow suit. But it’s what’s left of the prudent middle-class who’s being legally penalized and punished for doing everything right.

Ivy's avatar

I saw a comedy skit the other night with a mafia-type thug explaining why you’d be better off to get a loan from him than a bank, explaining that he’d never kick anyone out of their home if they couldn’t pay their loan ~ kick them downstairs maybe, cut off a finger or two, but he’d never take away a person’s home.

Espiritus_Corvus's avatar

There is a lot of truth in that skit. Pain can be one helluva an incentive. Homelessness more often than not leads to hopelessness. You cut off a person’s left pinkie with a pair of garden tongs, it shouldn’t affect their ability to earn an income for you and they will do what it takes to keep the right one intact based on the pain factor alone. You take a person’s pension, their kid’s college fund, kick them into the street and humiliate them in front of their family—they just might lay down and die on you or fly a plane into your building.

Espiritus_Corvus's avatar

Well, now, this is timely. Just in from the Huffington Post:

Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System ‘Corrupt’

One of the world’s leading economists said Wednesday that the very structure of the Federal Reserve system is so fraught with conflicts that it’s “corrupt.”

Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve’s—in which regional Feds are partly governed by the very banks they’re supposed to police—it would have raised alarms.

“If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure,” Stiglitz said during a conference on financial reform in New York. “It’s time for us to reflect on our own structure today, and to say there are parts that can be improved.”

Complete article:

Well, better late than never, I guess.

Ivy's avatar

This conjurs the same feelings I had for Robert McNamara and his old age confessions about his integral part in the Vietnam War: He wrote: “None of our allies supported us. Not Japan, not Germany, not Britain or France. If we can’t persuade nations with comparable values of the merit of our cause, we’d better reexamine our reasoning.” Gee, Bob .. y’think?

Check this out, I got a letter from Chase yesterday notifying me of changes to my Cardmember “Agreement” effective 2/22/10 in support of the new federal credit card regulations and laws. In very bold letters it says (twice, top & bottom): This notice does not change the interest rates and fees on your account. And then goes on to explain the terminology changes, such as Interest Charge Calculation, Periodic Interest Charge Calculation, and Minimal Interest Charge. Then it lists the ‘principal changes’ including word for word: “You will not be charged a fee for spending over your credit limit unless you agree to allow us to do so.” I’ve not yet located the fineprint where I opt out of that “agreement”.

Espiritus_Corvus's avatar

This is their loophole.

What a fucking hassle.
Read your future bills closely. Eventually, in fine print, they will ask that you notify them in writing if you disagree with them jacking the vig. Do yourself a favor and send it Registered, Certified Reciept Mail. They will claim they never got that letter. You are dealing with thugs. Real dumb ones.

Ivy's avatar

I feel pretty dumb myself to have been trapped this way. Never again (thogh my mom told me to never say never or always :>). I haven’t torn the damn thing up because emergencies do happen, but I’ve filed it away where it’s not easy to get and don’t intend to do anything now but pay it down and off as soon as I can. Rat bastards, they’re laughing all the way to the bank (wait .. they are the bank!), while their young customer service reps take the heat from outraged customers who believe someone gives a damn. After not being able to reason with the last young woman I spoke with, I finally asked her if she had any inkling that it’s not supposed to look like this? She didn’t. We are so screwed.

Ron_C's avatar

@Espiritus_Corvus @Dracool I just went through that with my Chase MasterCard. They wrote their little speech and gave an 800 number if you wanted to opt out. I called the number to opt out. It turns out that opt out means that your card is cancelled. Since I have $6000 worth of GM points on my card, I kept it and am now opted in.

Usury is now legal in the U.S. Before it was just something that was ignored, now it officially condoned. I blame Congress for all of this, both parties. Anyone that votes for an incumbant or candidate backed by the national republican or democratic parties is voting for their own slavery.

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