Finally a few more protections from the people who issued credit cards have gone into place. As of last Tuesday, laws were enacted that state if you make a late payment credit card companies can only hit you up for $25 late fee if it happens only once, and then no more than $35 if you happen to do it often within certain time limits. They also can’t hit you with a fee higher than the amount of any financial violations. In other words, if you happen to go over your limit by $18 accidentally, they can’t hit you with a 50 or $75 fee.

Something that many banks and said they were going to start doing was charging people who didn’t use their credit cards. The new regulations say that they can’t do that; that’s a good thing. It’s one of things I griped about what I talk about this concept of credit scores and outstanding credit. If you don’t have to spend credit you have available to you, you shouldn’t be penalized because you’re not buying things you don’t need. It was inherently unfair, I’m glad the federal government me that correction.

For once, the American Bankers Association is going along quietly with the new regulations as opposed to saying that it’s not fair to banks. Supposedly a representative was quoted as saying that the industry would work quickly and diligently in addressing these new regulations.

Here’s one more good thing. The new regulations state that banks cannot raise the interest rate on outstanding balances, with some banks had already put into place. At the same time, the new regulations are encouraging those banks that took advantage of the gap in time last year between when other credit card legislation was passed and then implemented to go back and rethink the interest rates that they raise during that time period. I’m not exactly sure how strong that encouragement is, but anything that works to the benefit of consumers is a good thing.

These rules will go into effect on August 22, which gives banks about 2 1/2 months to put everything into practice. Let’s hope they come down some of those interest rates as a sign of good faith.

By now, everyone knows that there’s been a credit card reform bill that was supposed to make a lot of positive changes for consumers. Truthfully, there have been some nice changes, especially if you’ve taken a look at your credit card bill and seen the little graph that shows how your balance will be paid off quicker if you make higher payments, and how long it will take you to pay off your balance if you only make the minimum payment.

Well, it seems there’s a dirty little secret that’s taking advantage of some of you, and may skew the figures somewhat. It seems that if you have a credit card where you’ve not only got a regular balance, but a cash advance balance, your payments are only being applied to your credit balance and not your cash advance if you have a balance in both areas.

Why is this a big deal? Two reasons. One, because most cash advance interest rates are much higher than the normal credit card interest rate. there could be as much as a 100% difference between using regular credit and getting a cash advance, such as 13% and 26%. Two, part of this was covered under the new law, but the caveat was that if you paid “more than the minimum” amount then the extra had to be applied to the highest interest amount on your account.

What this means is that the credit card issuers are doing the legal thing, if not quite the most fair thing. If you didn’t know before, now you know. By the way, you can’t request the payment to be applied to one or the other either, so the best thing you can do is find a way to pay even $10 more per month on your bill so that you can bring down the higher interest amount as well.

Every once in awhile I take a good look at my credit card statement. It’s something I didn’t used to check until one day, about 5 years ago, I noticed I was being charged for something that I couldn’t ever remember signing up for. It turned out I’d been being billed for something nearly 2 years that was kind of an add on to something else I’d purchased. I had it canceled, but knew I was never getting my money back and didn’t even try.

This weekend, Visa decided it will no longer allow sites to automatically sign people up for things they don’t know they’re signing up for. They will require that consumers must re-enter all of their credit card information anew before allowing any third-party charges. This means that if you visit any of those sites where you see all these other offers popping up and you happen to forget to uncheck the box, which is how many people get sucked into these ventures, you won’t be seeing things like this on your bill unless you follow through on the action in popping your information in.

That is, with Visa, since Mastercard had already ended the practice years ago. All of this comes on the heels of a report by Sen. Jay Rockefeller of West Virginia stating that this practice was earning as much as $1.4 billion a year in unauthorized charges on 30 million Americans’ credit card bills. The main sites guilty of this practice were Priceline.com, Hotwire.com and 1-800-Flowers. I say “were” because 1-800-Flowers has dropped that type of service.

If you use your credit cards often enough, you should be checking them to see what you’ve been charged for anyway. Many people will find that there’s this payment protection service they’re being charged for that was actually thrown on by the credit card companies themselves to protect “you” against losing your job and not being able to make payments, but you were never asked. If you have no worries about this, you should cancel the service, which is usually between $15 and $20 a month.

Be vigilant with your credit; never let anyone else assume to create debt for you.

When you are comparing credit cards, are you putting the right amount of emphasis on the credit card merchant? The card merchant is not always the bank issuing the credit card, and when you are comparing a Visa card to a MasterCard to an American Express card, you may not be clear about whether the merchant – Visa, MasterCard or American Express – is offering the services you are comparing, or whether they are the services offered by the issuing bank. Therefore, find out a little more about each card type, and how to choose the credit card which is right for you. It is also important to remember that many features are common to all credit card merchants, for example:

• Dispute resolution. If you make a payment on your credit card or have a payment debited from your card which you are unhappy with, you can contact your credit card issuer (your bank) and they will try and solve the disputed service, and if they find you have been unfairly charged for an unsatisfactory service, you can be refunded the amount of the purchase.

• Extended warranty. You may not realise, but if you make a purchase on your credit card, it can often add an extended warranty to that of the manufacturer’s warranty. An extended credit card warranty can sometimes be as much as two years longer than the manufacturer’s warranty.

• Purchase protection. If a purchase you make on your credit card is lost, damaged or stolen, you can often have it replaced within 90 days of the purchase thanks to the added protection of your credit card.

Visa is a merchant processing system, partnered with financial institutions around the world. It is the financial institutions who issue Visa credit cards who decide on the annual fee of the card, the late fees and the rewards programs, not Visa themselves. However, some of the benefits you can compare and attribute to Visa include:

• Wide acceptance. Visa has one of the widest worldwide acceptance rates of any credit card merchant, having been in operation since 1958, when it was called Bank Americard. As a result Visa is accepted in over 200 countries making it easy to spend safely whether you are spending around the corner or around the world.

• Verified by Visa. Visa is also aware of your awareness of credit card security and identity theft and so have recently added the Verified by Visa feature to their cards. When your bank issues you a Visa card, you can register with Verified by Visa and create a secondary password. Then, when you use your Visa credit or debit card with participating online retailers, they will ask for this second identification password, and will verify your password with Visa before processing the payment – someone using your card number fraudulently wouldn’t have this additional password, and the payment would not be authorized.

• Non-credit Visa card options. Visa also gives users the option to spend only their own funds, rather than accruing a balance which can then attract interest. Visa card users can choose to use a Visa debit card which looks and acts like a credit card, but accesses your own funds in your everyday account, rather than building up a balance you need to repay later. Visa also offer prepaid cards which can be charged with your own funds and given to teens as spending money for example, but once the prepaid amount is spent, the card stops working.

• Zero liability. If you notice a fraudulent purchase on your Visa card and you report it to your card issuer, Visa will credit you back the amount of the fraudulent transaction. Visa may also extend you extra credit to cover the cost of a fraudulent transaction which exceeded your limit.

MasterCard is also a merchant processing system which allows banks all over the world to issue credit to their customers. So rather than comparing the rewards points or the interest rates of a MasterCard, consider the features which are actually unique to a MasterCard, not the issuer:

• Almost equal acceptance to Visa cards. Beginning operations in the mid-1960s, MasterCard is slightly behind the game compared to Visa. However, it is still one of the most widely accepted credit cards in the world, and there are now few places which accept a Visa card, which don’t accept a MasterCard.

• MasterCard SecureCode. MasterCard also has a double layer security verification system for online purchases which allows you to set up a code you can use when making online purchases. You simply need to look for the SecureCode symbol at an online store and you can be sure your purchase will be protected with an added level of security.

• Spend your own money with MasterCard debit card. A debit card allows you to make fast and secure purchases online just as you would with a credit card, but instead you are accessing your own funds, so when you spend all your money for the week, you can’t go on living beyond your means, but you learn to curb your spending to what you can really afford.

• Protect your shopping. Eligible MasterCard holders can enjoy price matching services and purchase protection, as well as extended warranty on eligible purchases which often goes beyond the manufacturer’s warranty on the product.

American Express operates their credit cards in over 130 countries, but they are often seen as being far less accepted than MasterCard or Visa. This is often because American Express charges a higher merchant fee to the merchants who accept your payment on an American Express credit card and where a MasterCard or Visa card merchant fee is around 1% of the transaction cost, American Express can be as much as 4%. To understand how and why American Express credit cards appear to be more expensive to use, you need to know more about the American Express business and offers:

• American Express works hard on their brand, and it works. American Express has invested a lot of clever time and money into making their brand synonymous with prestige and affluence, using celebrities in their advertising and promoting not just a card, but a lifestyle. As a result, they have attracted a lot of prestigious and affluent credit card customers.

• American Express is offering their affluent customers to merchants. Since American Express are so confident in the affluence of their client base, they charge a higher merchant fee because they can – if a merchant refuses to pay the American Express merchant fee and not accept the cards, they are also turning away affluent customers, and no business wants to lose customers with a lot of money.

• American Express controls each level of credit card issuing and use. Where MasterCard and Visa are the merchants of their cards and they have banks around the world issue their cards, American Express are the merchants and the issuers of their card. This means they process the transaction, issue the card and act as the network link between your bank, and the bank of the person you have just made a payment to. This means that American Express is able to keep more of their merchant interchange fees, rather than paying a third party at each step in the process, and this means they can offer greater rewards with their credit cards.

• World famous rewards programs. American Express credit cards typically come with double points for every dollar spent rewards points schemes, and offer more attractive rewards once you have reached a certain points balance.

• Surcharges or refusals. Not all merchants are willing to absorb the costs to accept an American Express credit card just to attract affluent customers and some will refuse to accept American Express cards and others will charge you a surcharge. This can sometimes be as much as the full 3-4% merchant fee on top of your purchase.

• Expanding the reach of American Express. While American Express is typically the issuer of their credit cards, they have recently begun allowing other banks to issue their cards. This means you can have an American Express credit card linked to your ordinary MasterCard or Visa credit card as a companion card, to enjoy the rewards. American Express has done this to expand its reach where their cards are not yet widely used, however, this can mean that an American Express card issued by your own bank carries the same surcharges from some stores, and is not accepted at others.

Now you can decide whether a Visa card, a MasterCard or an American Express card will best suit you, you can compare the features of the individual credit card offers and negotiate with the issuer of the card on the features they can control.

Alban is a personal finance writer. He helps people to compare the best credit cards online.

We’ve all seen those gift cards that people can buy for others. Some mirror regular credit cards, while others are for specific retailers.

The problem with those cards is that they all come with fees of all sorts, and one never knows exactly what those fees are, and that’s just plain wrong. Some people end up paying big fees because they didn’t use all of the card in time, and find out that the card has burned itself up, even though there might not have been an expiration date on the card.

Thank goodness once again for the Federal Reserve. Although it won’t go into effect until August, they’ve taken on this issue about fees, which will at least balance the landscape a little bit and let consumers know what’s going on.

What’s coming? One, all gift cards are going to have to spell out what fees are and times for those fees so we know what they are. Two, inactivity fees will not be allowed to be charged until there’s been a year of inactivity, and even then, there will be a cap on how much those fees can be.

Of course, it’s still probably best to use those gift cards as soon as you can, but now you have a bit more protection; that’s a good thing.

The latest figures relating to the performance of credit card loans, from issuers including Capital One Financial Corp. (COF) and American Express Co. (AXP), suggest that consumers are still troubled, and losses branching from souring credit card loans remain high.

Analysts say that recent trends show the market is headed for a peak in delinquencies and charge-offs (loans that lenders do not expect to recover). Despite this, levels in February remained high, indicating a bumpy road to recovery for the U.S. economy.

The industry is continuing to battle against credit concerns as increasing unemployment adds pressure to consumers and balance sheets. Delinquencies and charge-offs assist when predicting potential losses to lenders and the amount that is likely to be required to cover them.

Credit card issuers are also contending with fees & rate increases, effectively lowering income. The Federal Reserve Board recently said it was asking issuers to reassess whether increased rates for some cardholders where actually necessary, before new federal regulations are implemented.

according to a filing with the U.S. Securities and Exchange Commission (SEC), Capital One said charge-offs dropped to 10.19% last month from 10.41% in January in its U.S. credit-card business and fell to 8.07% from 9.03% internationally. Auto-finance charge-offs declined to from 4.27% to just 2.50%.

At its U.S. credit card business, 30-day delinquencies were down at to 5.51% in February from 5.8% in the previous month, despite edging up from 6.66% to 6.68% internationally. The rate fell for auto loans from 9.61% to 7.99%.

According to a recent Goldman Sachs report, Capital One may be more vulnerable than some of its similar sized rivals, as more than 30% of its cardholders are made up of less-creditworthy borrowers, compared to the typical average of between 20% and 25%.

Another of main credit card providers – American Express, was previously reporting relatively healthier trends, but still posted figures that fell significantly lower than its peers. The credit card issuer said U.S. borrowers a month or more behind on payments were flat at 3.6% from January.

Craig Maurer, an analyst for Credit Agricole Securities, said in a note to clients that the figures seen from American Express “indicate the company’s portfolio continues to materially outperform competitors’.” Figures from last month give AMEX “no reason to doubt [the providers] ability to outperform” when reporting first-quarter earnings.

Sam Gooch is with Which 4U, a UK Price Comparison website which compares credit cards, savings accounts, fixed rate bonds, bank accounts, ISAs, loans, mortgages, insurance, and TV, broadband and gas/electric bills to find the best UK deals.

There’s something that’s been going on for at least the last 6 to 9 months that I hope no one has fallen for.

What happens is you get a call from someone telling you that there’s something wrong or getting ready to happen to your current credit card, and that you need to talk to them about lowering your interest rate.

If you get these phone calls and pick up the phone, don’t talk to these people. If you get a message asking you to call them back, don’t return the phone call. These are scams, with one of two intentions:

1. Get you to sign up for a new card

2. Get you to give them information you shouldn’t be giving out over the phone

The first is bad enough; the second is truly nothing but trouble. They have multiple ways of getting information out of you if you’re not savvy, such as having you press certain keys, or telling you that they’re from the fraud department of either Visa or Mastercard or something like that.

Here’s the thing, however. When they call, they never tell you which credit card it is that you might be having problems with. That should be your first clue. Some people will ask them which card and then start throwing out the names, in which case they’ve just handed the scammers all the information they need to continue the con. Some people are ready and willing to give out their passwords, pin numbers, and even their checking account numbers to these folks; don’t do it.

In a couple of instances people have been getting mail saying these same sort of things. Just because you’ve received something in the mail doesn’t mean it’s legitimate. Once again, most of the emails come without any information on them except a phone number or website address, which means it’s a scam because it didn’t come from your bank. You should know what the mailings from your bank or credit card look like; if you get something that doesn’t fit that, disregard it, or pull out your phone book (does anyone still use phone books? If not, look up the number on the internet) and call the bank directly, and you’ll probably find out 99% of the time that it was a scam.

If you’re contacted out of the blue by anyone who wants to talk about your credit cards or bank account, always be wary. If they can’t tell you some things without you telling them something, hang up and call your institution on your own. Better safe and rude than sorry and poor.

With the new credit card legislation came another new provision that effectively takes a lot of non-voluntary money away from banks.

Overdraft fees were a big thing for banks. At some point, they started charging fees to people while still paying bills if you happened to go over your limit. The same goes for credit cards, which allows people to go over their credit limit for a minimum period of time. Banks didn’t mind because they’d hit you with fees that generated more than $20 billion in revenue a year across the board.

Now that is gone. Banks have to get people to opt into the program. Some banks are being very aggressive with this, such as Chase, while others are either still working out the logistics or will probably be sending up some kind of notice in our next statements, which I’m betting the majority of people won’t even read unless it’s sent separately.

Let’s face the fact that all of us have missed this every once in awhile. A deposit didn’t clear as quickly as you thought it would and suddenly you’re hanging because the payment did clear on time. Or you bought gas after making a payment on your credit card that didn’t clear yet and suddenly you’ve gone over by a few dollars.

Do you want to accept these fees or not? The question depends on just how close to the vest you usually are with your money and whether or not you pay attention to what’s going on. If you never overdraw, or very rarely do, you shouldn’t sign up for this protection because you don’t need it. Sure, you may be shocked those couple of times if something does happen, such as being out trying to buy something and having your card decline because you don’t have enough money in the account, but that’s preferable, in my opinion, to getting hit with a big fee later on because you were never informed you didn’t have the money on your credit card to cover it.

If you overdraw all the time, or are always right next to the line, then continue paying banks for the overdraft protection. Sure, it can add up, but it’s less embarrassing than trying to pay for things and getting denied all the time.

Just make an informed decision, then live with it. but gauge how high those fees are, because banks will be raising them, as it’s just one way they can recover from all those other ways they’re cheating customers nowadays. You did know about the credit card with 79.9% interest, right?

On Monday, the CARD law that was passed last May finally goes into effect, which is supposed to offer lots of protections to Americans that these greedy banks have been throwing at us. Well, at least things the law addressed before banks had time to change some things up before this law went into effect anyway, none of them good. It’s going to be a dicey road, that’s for sure.

What do we have to look forward to? One, there will probably be very few 0% interest rate offers anymore. That’s because one trick banks used to do was to get you into that interest rate, then raise it after six months to the rate that your other balances were at if you hadn’t paid it off, or jacked everything up if you were even one day past payment or if you had gone over your credit limit. Since they can no longer do that, they have no incentive to give you that introduction anymore.

Something else you can start expecting are more bank fees, and they’re probably going to be higher than they used to be. I don’t actually have a problem with that, since it’s better than floating interest rates, and at least you know what you’re paying for the right to use a card. I do have a problem with some of the ways they’re going to have fees. For all you people who have been used to paying your credit card balances off every time you got the bill, there will now be a fee for that, since they can’t make any money off you from interest.

Oh yeah, interest rates will be going up for new card requestors. I doubt you’ll see 4.9% interest rate cards anymore because banks need to make money from things since they can’t do some sneaky stuff anymore like just closing your account or raising your interest rates without really informing you that they’re doing it.

It’s definitely about to turn into a ‘buyer beware’ game when it comes to credit cards. Make sure you read everything before you apply, then obtain, a new card, and if your credit card bill shows up and is a little thicker than the previous time, check it to make sure there’s nothing new you’re being hit with as well.

Last June, I wrote a post asking if we really needed credit cards, and came to the conclusion that yes, we did. At least one credit card, since there are many entities that will require proof that it’s you via a credit card, or won’t hold something for you unless you give them a credit card number of some kind.

Since we’re past the first question, then it makes sense to look at what you might want in a credit card. Here are some suggestions for what to look for that will serve your needs and also help you stay safe.

1. There’s a difference between credit cards, debit cards, and charge cards. Credit cards are what you use to help yourself borrow money from another entity, which you’ll pay back in small monthly installments. Debit cards are tied in to your bank account. Even if they have a credit logo on them, you’re actually spending your own money. Charge cards are cards that allow you to make purchases without initially spending your own money, but you have to pay off that entire amount when the bill is due. That’s what American Express is.

2. Credit limit is more important than interest rate. You won’t hear that too often, but it really is. For instance, having an interest rate of 30% annually means very little if your credit card limit is only $500. That’s only a hit of $2.50 for every $100 you owe. But if your limit is $10,000 and you have $9,000 sitting out there, that’s going to be a killer long term.

My suggestion is to keep your credit limit as low as possible to protect yourself. The truth is that if you have a card with a high limit, your mind says “heck, that only costs $400, and I have way more than enough credit to buy it.” That’s how people get into trouble. If you did that once a month but only paid the minimum, you’ll be in financial difficulties really quickly. Try to have only enough credit limit to reach 10% of your gross income. So if you make $30,000 a year, that’s $3,000 overall. If something goes wrong, as in you lose your job, it’ll be much easier to handle payments on lower balances for awhile.

3. Now we look at interest rates, and once again, not only the lowest interest rate. You want to make sure you have a fixed interest rate rather than a variable rate. Variable means it can be really low at one point and suddenly skyrocket the next. This doesn’t mean your interest rate can never be jacked up, as we’ve seen often over the past few months, but it does mean you’ll know what your rate is from month to month unless there’s a unique event. To me, it’s far better having an interest rate of 14% if it’s fixed than having a variable rate that might be 7.9% one month, then a few months later could be around 20%.

4. Big bank vs small bank credit cards. Personally, I’d rather go for smaller bank credit cards, because more of them are stable as opposed to bigger banks (though you really have to be paying attention to your local news as it pertains to local bank issues) and if you have difficulties, they’re more willing to work with you and not put as much pressure on you to come through for them. The big boys don’t care about you because they don’t know you; local banks know you better.

I know that some people believed I was sounding a very negative death knell against the credit card industry last year. I went fairly easy on American Express because, after all, it’s not associated with any banks and their practices, for the most part, have been pretty fair.

But for everyone else who has a Visa or Mastercard through some bank, y’all are being jacked and very unfairly, and all of this before the credit card reform goes through in February.

In this news story from MSNBC, there are many tricks highlighted that banks are pulling on their credit card subscribers that are so unfair that they help my general premise that it’s much more advantageous for most people to just cut up and cancel their credit cards or try to find someone who offers them a better deal than what they’re presently getting.

For instance, you know all that advice usually get about paying off your credit card at the end of each month to avoid interest fees? Well, it seems Bank of America is going to get around that one by hitting up their subscribers with fees ranging from $29-$99 a year depending on what their credit limits are. Obviously they’re doing this because they can’t make money off of anybody who is paying their credit cards on time. But it punishes those people who are supposed to be the most conscientious and paying off their bills and not knowing anybody.

Of course my favorite whipping boy Citigroup isn’t all that much better. Citigroup is now going to start charging yearly fees on those subscribers who don’t spend enough on their cards every year, whether they have a balance or not. What this pretty much means is that if you have a high balance and are making monthly payments, yet you don’t have enough room so you can spend all that much money, you’re going to get a fee. And you will probably be joined by those people who hardly use their credit cards, but it held onto them because the financial gurus have told them that it would hurt their credit scores to cut those credit cards up. From where I sit, that kind of device is becoming more bogus every single day. By the way, Chase is going to be doing the same thing as Citigroup, so you folks are getting off the hook either.

I’m sorry, but what happened to the possibility that Congress was going to move up the date that this particular bill, The Credit Card Accountability and Disclosure Act, might be going into effect? Obviously we missed that, and the banks are going to continue hitting their consumers with fees and jacked up interest rates all the way until the date this bill goes into effect, which seems to be February 22. I think that’s unfair, and I think the banks are pretty much shown everybody what they think of us.

Folks, some of you may remember that I actually wrote a post early last year called Do We Really Need Credit Cards. I think it’s time that most of you do exactly what I did, which is to make one of your cards and American Express card and your other cards a bank card with the Visa or MasterCard logo on it. True, it’s not really credit (unless you can qualify for their American Express Blue Card), but at least you can use them in those situations where you have to show some kind of identification via a credit card. Or, if you really want credit card, you can check out a site that was mentioned in the news story above, LowCards.com.

We all have to stop being victims to the banks and credit score people, and come out with strong opinions against people like the American Bankers Association, not only because they predicted this was going to happen, but because they probably worked with the banks to create all those fees in the first place. You might want to consider something like what’s recommended by a group called Move Your Money to show your displeasure with these banks. Bunch of weasels!

Yup, you read that correctly. It seems that First Premier Bank has decided that it can skirt new credit card regulations by offering a credit card with an annual interest rate of 79.9% to people with bad credit. The maximum they can have on the card is $300, and the minimum monthly payment is $20.

They’re doing this because one of the new regulations that was passed has a cap on the amount a yearly fee can be for credit cards to 25% of whatever the balance on a credit card is. First Premier Bank used to charge $256 a year in fees to use a credit card with a limit of $250, and now that’s been thrown out. And let’s not forget to add that there will be a $29 fee for going over the limit or making a late payment.

The bank believes it’s offering people will lousy credit a chance to build their credit back up. My opinion is that loan sharks get less of a rate than that. It’s potentially taking advantage of people, and I don’t like that one bit. The bank says it doesn’t know how long it will have the card plan. I’d rather they kill it right now and don’t give those who don’t qualify for credit new credit cards to begin with.

Anyone disagree with me on this one?

I’ve been on this minor rant for a few months against credit scores and some of the things financial advisors have been telling people in regards to making sure their credit scores don’t fall by cutting up credit cards. They’re telling people not to do this, even as banks have been jacking up interest rates on everyone, including people who had these great credit scores.

On Monday, the Federal Reserve proved it, presenting statistics that showed around 50% of all banks had jacked up interest rates on people whose credit scores were good. Around 40% of banks said they were imposing higher fees, and many others mentioned they were raising the credit score limit in deciding who was going to get new credit cards.

Now, that 50% doesn’t necessarily sound bad until you realize that the 12 largest banks in this country are responsible for issuing 80% of the credit cards. That means that the majority of people in the country have been hit with these things, and that’s a phenomenal number.

Another study, done by the Pew Charitable Trusts, also showed that some of the laws that have already been approved and implemented have been ignored by many of these banks. They didn’t highlight what these laws were, however.

Of course, the banks say they need the money, and that all this legislation is bad for consumers because it will restrict how much credit they’ll eventually give out. Please; these are the same people who have been preying on college kids, and have actually given credit cards to children and animals without realizing it. Their practices have been questionable for decades, and in reality, they were probably giving credit to people who shouldn’t have had it, or at least giving lots of credit to people who shouldn’t have had it.

I’ll even own up to that one. I had a $10,000 credit card when I was 28 years old and not making more than $20,000 at the time. And I didn’t ask for it; not really, anyway. I put in for a card that said it would give me $2,000, and this card shows up with this high amount. Lucky for me, I didn’t ever get close to that, but I could have.

So, fewer people will qualify for credit they shouldn’t have had; trust me, I understand how that works, and we all should be ready to accept it. It’s not going to hurt everyone in the way they think it might. Stores will still issue their credit cards with small balances, and banks will probably issue cards with smaller balances also. Cards might start having fees, and might require larger payments up front. It works out better that way, because people will be able to pay off their balances quicker, and that means less in interest being built up on their accounts. Banks have counted on this one for so long that they also forgot that none of that money was real.

At the same time, credit card debt is down almost, so banks don’t even have any of that money to hope to collect on. People are learning their lessons, and spending less. That’s dropped the number of credit cards in the last 12 months 75 million, but still leaves more than 550 million credit cards out there; at least Visa, Mastercard and Discover anyway.

I have no sympathy for the banking system. They’ve been taking advantage of us for years at this juncture. I remember when I was a kid being able to get a savings account that paid a lousy 2% a year. Now try getting one that pays more than .5% a year, without hitting you up with a $4 monthly fee.

That’s progress for you. But at least now you understand why I’ve said that credit scores are worthless. Some are going to debate me on this one, but it’s what I believe, and I’m not changing my mind one bit.

And don’t even get me started on the real estate market and credit scores!

Yesterday the House passed the Expedited CARD Reform for Consumers Act of 2009 by a vote of 331-92 vote Wednesday, with a number of Republicans joining Democrats in voting for the bill. It was about time someone decided to look out for we, the people, and many of the things credit card companies have been doing to us.

That anyone would vote against this bill is almost criminal, in my eyes, but 91 people did, and their reasoning is supposedly that it will hurt the availability of credit. As a matter of fact, supposedly that’s what the fight is going to be in the Senate, where this bill supposedly will have a problem getting through.

This is the most ridiculous thing; how can this not pass? As it is, almost no one is getting any credit right now anyway. More people are being turned down for credit as the debate about credit scores and the tightening qualifications in getting loans has been a topic for awhile. Few people are getting home loans; few people are being qualified for new credit cards, even though those bad boys are suddenly showing up at least every other day at my house. Having interest rates being jacked up, balances being charged and balances being drastically dropped that put us over the limit almost immediately when we were encouraged to move our money to these new cards, and being told to pay up or get out… that’s fair? In some cases, cards have just been closed without warning.

Here’s the deal, Washington politicians who voted against this bill. The rest of us aren’t rich. We don’t have the millions of dollars you have to even live calm lives, let alone spend to get elected to a job that pays less than 10% of your net worth so you can feel good about yourselves by trying to make us believe you have our best interests at heart. This is a no-brainer; protect us, pass this bill, and let’s move on.

If anyone disagrees with me that this is a bad bill, please try to convince me why. But be warned; it’s not going to be easy.

The latest news is that Connecticut Senator Christopher J. Dodd, Democrat, proposed Monday that there be a freeze on the interest rates and fees on existing credit card balances until the new credit card law takes effect. This follows a proposal by the House to move the new regulations up from February to December 1st.

Not that we haven’t talked about what the credit card companies have been doing to all of us often enough, but it’s sure nice that it’s finally getting some attention in Congress. It’s too late, even if it passes, to save many of us from what’s already taken place, including canceling our cards, but maybe both of these moves will slow down the rush of what’s been going on, because many people are victims to this change, and they didn’t do anything wrong. I’m wondering if some senators have suddenly seen their credit cards jump as well; you know they’ll always go on the attack when someone is trying to take their money.

Something else about this credit card thing is that it’s not just happening here in the United States. Prime Minister Gordon Brown of the United Kingdom announced plans to make credit and store card operators “clean up their acts” by trying to stop not only credit card solicitors jacking up rates, including payment rates, but issuing unsolicited credit card checks and a couple other things.

And it’s not only there. Canada, the Philippines, and many other countries are also finally saying they’ve had enough from these credit card issuers and are looking at ways to stop the assault on consumers. We don’t always think about other countries when things like this are happening to us, but this proves misery loves company.

Of course, the credit card industry isn’t staying silent, although there may not be anything they can do about it. A representative from a group called the Financial Service Roundtable said they oppose the freeze, stating that interest rates aren’t going up because of the impending law, but because banks are in trouble because of the unsteady economy and people defaulting on credit card payments. Oh course, he didn’t address the reality that most of the people who are experiencing these high interest rate increases aren’t people who have been missing payments, so that argument holds little water.

Keep your eyes and ears open; this could be a good thing for us all if Senator Dodd can push it through.

Oh my goodness. Am I just picking on Citigroup et al, or have they been in the news a lot in the past couple of days?

Yesterday I talked about how Citigroup jacked up my wife’s credit card. Four days ago I talked about how Citi crashed and burned by posting that $3.24 billion loss.

News came in last yesterday that, over the weekend, many people tried to use their gasoline cards, which were issued by Citigroup for those companies, and found that they weren’t working. All of them were Mastercards. When people called to find out what happened, they found that their cards had been closed.

Citi owned up to it today, saying they sent out letter today (of all things) saying they were closing a bunch of these “oil-branded” credit cards, including Shell, ExxonMobil and Phillips 66-Conoco cards. I actually have a Mobil card that I haven’t used in a few years, so I guess this means I’ll be getting my notice at some point, if my card is still deemed active. My mother also has one of these cards, but I had talked her out of using it a couple of years ago, opting to have her use a credit card that gave her points for purchasing items with it.

Anyway, it seems that even with the new credit card legislation that’s coming, credit card issuers can close accounts at any time, without warning, whether you’ve been a good customer or not. And get this; supposedly many people with this card could see their credit score take a hit because the account has been closed by the bank, even though it’s not the customer’s fault. That’s another reason I believe credit scores are a joke. Not that anyone’s credit scores are helping them buy anything of substance these days, including real estate.

Folks, if you’re doing any business with these people, you need to beware. They’re going down fast, and they may end up taking many of you with them. I’m not going to say anything more; man, I’m so done with these folks!

Man, it seems all I’m doing these days is talking about things Citigroup is doing. Unfortunately, this time it’s hitting really close to home.

On Saturday, my wife got a letter from Citigroup saying they were jacking up her interest rate from 16.99% to 29.99% effective in November. She can close the card before November 30th to lock in the rate, but she’ll have to cancel the credit card to do it.

Instead, she says she’d rather pay off the card and keep it in reserve until she definitely needs it, then work on paying it off every month when the new bill comes in. It’s probably manageable, as she only has $400 available on the card to begin with, but man, did I see this coming.

Actually, no I didn’t, because I forgot she had a Citi card. But I saw it coming across the board, especially after posting that big loss last week. I think I also wrote somewhere around here that I couldn’t remember why I hated these people so much; with what they just did to my wife, now I remember.

At this point, the only big credit card I have is with American Express; I think they’re done picking on me for the time being. It feels like a marathon trying to get to December before new rules kick in, that’s for sure. We can all only hope for the best at this point.

A couple of weeks ago I wrote about Bank of America agreeing that they wouldn’t be charging people on overdrafts of $10 or less, which I thought was pretty weak, but it was at least something. They also reduced the overdraft fee to $25.

Last week they announced that they wouldn’t be hiking up interest rates, which was a nice announcement as many banks were unwilling to make that commitment in lieu of the new credit card legislation that’s impending.

Today they announced that they will be adding annual fees to about 1% of their credit card holders, with those fees ranging from $29 to $99 depending on whatever goofy criteria it is they’re coming up with. The thing is that they’re saying this is a “test” to see how people respond, which sounds weird because the only two choices are to accept the fee or close one’s account. My gut feeling is that they will be imposing this on at least 50% of their card holders before this is over. One of the things that this new announcement means is that people who pay off their cards every month, which has always been recommended by financial advisors, will be some of the people who will suddenly see a fee.

Once again, it brings this question back as to whether people should cancel their credit cards or not. My position hasn’t changed on this one; I think there are times when people have to either decide they’re going to stop allowing credit card companies push them around or realize, if it’s the case, that they can’t control their spending when they’re trying to stop spending so much by cutting up their cards.

Anyway, you folks that have Bank of America cards now join people who have other cards where we’ve had to make decisions as to whether we’re going to keep them or not. Good luck with your decision.

If you’ve ever transferred balances from one credit card to another and not paid them, you might have something new to worry about.

This past week, it was big news that many people who had transferred balances to Chase credit cards were suddenly being hit with not only higher fees, but higher monthly payments as well. In many cases, those payments more than doubled, which makes sense since the APR on those balances also more than doubled.

In a local case, and I live in the Syracuse, NY area, a woman’s payments jumped to $520 a month when previously she was paying $250, and her monthly payment on the outstanding balance she’d transferred years ago jumped from around 2% to 5%. In case you’re wondering, that’s a yearly jump of around 60%.

Turns out what Chase is doing isn’t illegal, just unethical. All banks are allowed to announce increases in APR and payments at any time, so long as they give you notice that they’re going to do it. This lady said she never got any notice, and Chase isn’t talking, so we’ll never know if that’s true or not.

On this one, I tend to believe the banks that say something was sent out. In a portion of my business background, we routinely would hear from people who said they had never received a bill when we’d send them to collection, yet we’d have the exact same address on our system as the collection agency had, and our system would show we’d sent out a least 4 bills. I think people get immune to certain types of mail and just don’t open them up; I’ve been guilty of that in my past also.

In this past year I’ve had one credit card company suddenly and another one jack up my interest rate. Both notified me a couple of months in advance to let me know it was coming. One I accepted, the other I canceled the card. I think the thing I’m lucky on is that I don’t have any cards open where I’ve transferred the balance from another card; man, how scary would that be.

It’s not fair, it’s unethical, but it seems to be the bank’s right to do it. Chase may only be the first, or, with the bad publicity, maybe we can make it the only one. I’m really glad I’ve never gotten a Chase card; I don’t trust anyone who sneaks something like this in on people they supposedly care about.

After reading a lot of bad news about credit cards lately, there’s finally a little bit of good news.

In a story that comes from the Washington Post (which I can’t link to because you have to be a subscriber to read it, which I am), it stated that more and more banks are reaching out to customers who they determine are in some kind of financial difficulty and offering them deals in helping them reduce their debt. In some cases, they’re drastically reducing interest rates so the payments are lower, but more of the payment is going to the principle than interest. In others, they’re working out payment plans with people who they determine might be on the edge of bankruptcy.

To me, this is good news just for the fact that some companies are reaching out and trying to do something, finally. I think I’ve argued on this blog that it’s better for some of these folks to get something rather than nothing, and if the financial condition of a person improves then they can go back to the original terms and move on from there. True, I’ve said it more about mortgage holders so people don’t have to decide whether to head towards foreclosure or short selling their homes, but in a way I’ve also railed against credit card companies.

All of this doesn’t come without issues, however. In many instances, people have to cancel their credit cards, which isn’t such a bad thing, as I’ve advocated people should do that. But that also puts a negative hit on their credit reports, which reduces their credit scores, something else I’ve railed against. You know, I’m really of the opinion that either credit card scores should be thrown out or overhauled, because if someone is paying back debt or makes an agreement to pay off debt, even if it’s not the full amount, it shouldn’t drastically alter their credit score because those people are acting in good faith.

And, if you cancel a credit card for any reason, it’s not fair that you take a negative hit for being fiscally responsible. Why should I keep a credit card for three years that has no balance and that I never plan on using again just so my credit score survives? That’s idiocy; keeping credit I can’t or won’t use so that I can potentially borrow lots of money later on. The president of consumer education at Credit.com, John Ulzheimer, said “It’s really something the individual will have to weigh. “Is the damage worth it because the funds are less expensive?”

It shouldn’t be a yes or no choice; that’s the problem. Unfortunately, once again, the only thing people can do is to not get credit cards to begin with. And you can’t do that, otherwise forget about flying on an airplane or renting a car or many other things where you have to verify who you are via a credit card.

They really do have us all over a barrel. Still, this was a bit of good news for once.