Tuesday, May 19, 2009

Senate passes credit card reform, but...

the senate did not have the spine to cap interest rates at 15%. It is all about their re-election coffers. Sad, but true.

Also, before we jump for credit card change, glee, the industry is about to penalize those with good credit. Yep, we that pay our bills on time are going to get all our perks taken away, along with annual fees that will probably be out of sight. It is time for "Cash is King" to re-emerge.

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups. read more here....

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