tagged w/ Credit Cards
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American households lost $1.33 trillion of their wealth in the first three months of the year as the recession took a bite out of stock portfolios and dragged down home prices.
The Federal Reserve reported Thursday that household net worth fell to $50.38 trillion in the January-March quarter, the lowest level since the third quarter of 2004. The first-quarter figure marked a decline of 2.6 percent, or $1.33 trillion, from the final quarter of 2008.
Net worth represents total assets such as homes and checking accounts, minus liabilities like mortgages and credit card debt.American households lost $1.33 trillion of their wealth in the first three months of... more
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A gang have pocketed £200,000 in bogus royalties, according to police, after downloading their own music from iTunes and Amazon.com using stolen credit cards.A gang have pocketed £200,000 in bogus royalties, according to police, after... more
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Legend has it the first credit card was inventd 60 years ago, when a man at a diner realized he forgot his wallet and was inspired to start a 'Diner's Club card.' The card allowed members to pay their restaurant bills monthly.
Since then, cards have gone plastic and you can get a card with a picture of just about anything on it. Check out the evolution of credit cards in photos.Legend has it the first credit card was inventd 60 years ago, when a man at a diner... more
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From 2003 to 2008, Nuhu Ribadu was Chairman of Nigeria's Economic and Financial Crimes Commission. Over the course of his career, he charged many of Nigeria's bankers, politicians and former ministers of corruption and money laundering. As a result, he was eventually fired and exiled from Nigeria for exposing corruption within the Nigerian government as well as other African governments. In this video, Ribadu testifies in front of the U.S Financial Services Committee on their role in aiding the money laundering practices of these governments.From 2003 to 2008, Nuhu Ribadu was Chairman of Nigeria's Economic and Financial... more
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Congress on Wednesday sent to President Obama a bill that makes it tougher for credit card issuers to raise fees and interest rates.
The move caps a years-long crusade by consumer groups and Democrats to rein in what they say are abusive practices that prey on consumers. The approval came despite strong objections by banking industry advocates, who say it could result in tightened credit to Americans.
The House voted 361-64 in favor and also approved by 279-147 an unrelated measure allowing people to carry guns into national parks.
The Senate passed the credit card bill, along with the unrelated gun measure, by a 90-5 vote on Tuesday.
President Obama will sign the bill on Friday, a White House spokeswoman told CNN.
The credit card rules would take effect in February. The bill is moderately tougher on banks and card issuers than are new Federal Reserve rules set to take effect July 2010.
(Full article at link)Congress on Wednesday sent to President Obama a bill that makes it tougher for credit... more
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islek
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3 years ago
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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.
[...] As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.
People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.Credit cards have long been a very good deal for people who pay their bills on time... more
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New blog post up about today's bill in Congress about restricting credit card companies. What do you think? Do credit card companies deserve this handslap? Is our government overreaching?
And speaking of financial crisis, Vanguard's new show tomorrow night is called "Thank You, Recession"!New blog post up about today's bill in Congress about restricting credit card... more
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WASHINGTON — The Senate voted overwhelmingly on Tuesday to put new restrictions on the credit card industry, passing a bill whose backers say will make card-issuers spell out their terms in fewer words, using plain English, and treat customers more fairly.
The 90-5 vote, following a 357-to-70 vote in the House on April 30, made it likely that President Obama will have a measure on his desk before the Memorial Day recess. The differences between the House and Senate versions will have to be worked out, but given the political atmosphere it seems likely that the House-Senate negotiations will move quickly.
“This bill cleans up the fine print so consumers can’t get blind-sided by their credit card companies,” Senator Harry Reid of Nevada, the Democratic majority leader, said recently in urging passage. “This bill will not only level the playing field and keep the rules consistent from beginning to end, and it can also save families thousands of dollars a year.”
The industry has asserted that the legislation may backfire, forcing banks to issue fewer credit cards at greater cost to the current cardholders and making credit harder to get at a time when many Americans need it. But the tide has been running against the banking and credit card industry, with many consumers mired in debt and the public angered by the bailout of financial firms.
“Any effort to restore confidence in our economy must start not on Wall Street but in Main Street, and that’s what the credit card situation is all about,” Mr. Reid said before Tuesday’s vote.
End of excerpt
Source: The New York Times Online
You're thoughts on this bill?WASHINGTON — The Senate voted overwhelmingly on Tuesday to put new restrictions... more
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The manner in which we have destroyed our economy is astounding. We are so far from understanding and correcting our massive fuck ups that even this current obliteration of our ways has not brought up the discussion that needs to be had: Our usury laws are insane. Our usury laws drove us into debt, sped up the loss of our manufacturing base and have directly led to the murder of the middle class. And it’s only going to get worse. The looming credit card crisis will be the next shoe to drop and with deflation a serious threat, shockingly heinous and fluctuating interest rates will make it impossible for many to get by. Even ancient Babylon had laws against the shit we allow lenders to get away with.
Quite a few successful ancient empires considered usury to be worse than murder and it was punished accordingly. We, because we are an incredibly wise country, decided to toss out centuries of law and tradition. First in the early 1900’s, we began to gut our usury laws and then under Jimmy Carter they were fully disemboweled. It’s not like we didn’t have a time period to look back on and see what would happen....
Hit the link above for a brief and entertaining trip through the usury laws of ancient and modern "civilizations"....
Think we're more protected from onerous debt and the excesses of money lenders now than we were two centuries ago? Think again!The manner in which we have destroyed our economy is astounding. We are so far from... more
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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.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.Credit cards have long been a very good deal for people who pay their bills on time... more
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Obama is backing tougher legislation but lobbyists are pushing back hard... Moveon is helping to rally for this much needed cause (I'm not affiliated), contact your senators at the link.
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Don't let the banks water down credit card reform
Right now, the Senate is considering a strong bill that would curb the most outrageous ways that credit card companies abuse their customers.
But the bill is stuck in limbo because too many senators are scared to take truly bold action against the banks.
We need to let Congress know that we're watching them and we expect them to protect us, not the banks.
A compiled petition with your individual comment will be presented to your senators.
http://pol.moveon.org/creditcards/Obama is backing tougher legislation but lobbyists are pushing back hard... Moveon is... more
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On-line credit card fraud is a growing problem - I'm pretty careful with my card details, but I'm now on my fourth card. Chip and pin has helped cut fraud for transactions where the card holder is present, but can't be used on line.
The Emue card, currently under test, includes a small number pad and display, and uses a PIN to generate a unique code for each transaction; currently it is being tested by 500 Deloitte employees. Making it compatible with other systems used to handle credit cards and preventing the buttons being pressed or the display broken in normal handling are challenges, as is getting the battery to last for a normal card life of three years.
It sounds promising, but doubtless there are already many groups of criminals around the world working out how to crack the codes and ways to acquire PINs. But the main mystery that I'm wondering about at the moment is why they thought it a good idea to acronym it after a large Australian bird (although I appreciate it does have an extra 'e'.)On-line credit card fraud is a growing problem - I'm pretty careful with my card... more
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This week the Senate takes up a bill that would seriously clamp down on some of the industry's most unsavory practices, a piece of legislation that President Obama has said he wants on his desk by the end of the month. The bill, which builds on rules issued by the Federal Reserve Board and other agencies at the end of last year, would do away with interest-rate hikes on existing balances, prohibit issuers from putting customer payments toward lower-rate balances first and abolish the practice of raising a customer's interest rate because he was late paying a bill to someone else.
The credit-card companies, though, may not be the only ones we need to be protected from. Every penny of Americans' nearly $1 trillion in revolving debt started with someone — some individual person — whipping out a piece of plastic and making a decision to use it.
In one experiment, Drazen Prelec and Duncan Simester of the Massachusetts Institute of Technology found that people were willing to pay twice as much for basketball tickets when they were using a credit card as opposed to paying cash. Credit-card spending just doesn't feel like real money. In another study, Nicholas Souleles of the University of Pennsylvania and David Gross of the consultancy Compass Lexecon calculated that the typical consumer unnecessarily spends $200 a year in interest payments by keeping a sizeable stash of cash in savings or checking while at the same time carrying a credit-card balance.
(Full article at link.)This week the Senate takes up a bill that would seriously clamp down on some of the... more
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islek
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added this
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3 years ago
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WASHINGTON -- President Barack Obama on Saturday pressed lawmakers to send him credit-card reform legislation by Memorial Day, May 25, saying consumers need stricter protections against unfair interest-rate hikes and penalties.
"There is no time for delay," Mr. Obama said in his weekly address. "We need a durable and successful flow of credit in our economy, but we can't tolerate profits that depend upon misleading working families. Those days are over."
On April 30, the House of Representatives passed White House-backed legislation that would limit the ability of card issuers to retroactively increase the interest rate on a consumer's balance. It would also require firms to provide consumers 45 days notice before interest rate changes take effect, and prohibits double-cycle billing and fees that have led to outcries from consumer groups. The Senate is expected to act on its version of the legislation next week.
Mr. Obama will push the cause for reform again at a town hall event in Albuquerque next week. He will be in New Mexico on Thursday, the end of a two-day trip that also includes a commencement address at Arizona State University.
The banking sector has lobbied against the reform legislation, arguing that new rules could cut off the flow of credit to consumers and send rates higher.
But Mr. Obama said Saturday that it is past time for a fair and transparent set of principles to guide the industry. That includes heightened monitoring, enforcement, and penalties for credit-card companies that break the rules.
"Americans know that they have a responsibility to live within their means and pay what they owe. But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties, and hidden fees that have become all too common in our credit card industry," Mr. Obama said.WASHINGTON -- President Barack Obama on Saturday pressed lawmakers to send him... more
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I always see T.V. specials about individuals that are deep in credit card debt. Maxxxed out!!! In fact personal debt is one of the reasons for this financial crisis. how can we as a country make the same mistake on a grander scale. Oh yeah and to make it worse we are currently in debt to the Red Chinese. All this money that we are borrowing is going to have to be paod back one day. I don't think declaring bankruptcy as a nation is an option. Not to worry, we will just print the 8 trillion that we are in debt, that won't have any negative effects,I always see T.V. specials about individuals that are deep in credit card debt.... more
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Roxana Araujo is a financial crimes investigator for Florida's Office of Financial Regulation. It's her job to sniff out unscrupulous lending practices and help ordinary families avoid being taken advantage of by financial institutions. So it must have been odd for her to find herself seated next to Treasury Secretary Tim Geithner, describing the confusion and frustration she felt trying to understand why the interest rates on two of her credit cards had been increased without warning. But many readers will be all-too-familiar with that feeling of helplessness in the face of rising interest rates despite having always paid the credit card bills on time, as had Ms. Araujo.
Sometimes, you don't have to be a financial regulatory professional to know you're getting screwed.
Pushback against egregiously unfair lending practices in the credit card market is mounting. And it looks like Washington is finally getting the message. On Thursday, the House of Representatives passed the Credit Cardholders' Bill of Rights by a landslide vote of 357-70. The bill, championed by Rep. Carolyn Maloney (D-NY), would enact basic standards that eliminate some of the most exploitative practices in the business. Card companies will no longer be able to retroactively raise the interest rate on existing balances--except under limited circumstances, such as a 30-day delinquency. (This will put an end to "any time, any reason" rate increases) When the credit card companies do increase an interest rate, they will be required to give customers 45 days' notice. In addition, interest may only be tallied on balances in the current billing cycle, statements will be mailed earlier in the billing cycle, payments will always be allocated to the portion of the balance with the highest interest rate, and hefty fees for over-limit transactions will be banned unless cardholders explicitly permit it ahead of time.
When the free-marketeers were in charge, deregulation was the reigning political philosophy. Rules were scarce and enforcement even scarcer. The last time Congress imposed new regulations on the credit card market was the 1988 "Schumer Box."
Things have changed. Last week, the big card companies were called on the carpet at the (White House, where the President announced, "The days of any-time, any-reason rate hikes and late-fee traps have to end." And Thursday in the House, over 100 Republicans voted with Democrats to swiftly usher in the end of the freewheeling era in the credit card market.
Well, not so fast. Unfortunately, there is a 12-month lag between enactment and implementation. Congress is essentially outlawing these practices as harmful to consumers and then allowing them to continue for a year. Indebted Americans cannot wait a year for fair treatment when every day brings more bad news for the family bottom line.
Demos, a non-partisan public policy research and advocacy organization for which I work, has conducted has demonstrated through research that in a market with almost no rules, low-income families and households of color pay disproportionately high costs for credit card borrowing, in the form of painfully high interest rates and excessive penalty fees. And when the economy slows and unemployment rises, more and more families are forced to rely on credit card debt to cover shortfalls in income. In short, the absence of basic regulation in the credit card market is making this recession deeper for those already on the bottom.Roxana Araujo is a financial crimes investigator for Florida's Office of... more
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WASHINGTON (Reuters) - President Barack Obama will sign wide-ranging, pro-consumer credit card reforms into law by late May, senior U.S. House Democrat Carolyn Maloney predicted on Wednesday.
"President Obama seems very determined," Maloney, who met with Obama on Tuesday at the White House, told the Reuters Global Financial Regulation Summit in Washington. "He said, 'We're going to get that bill. We're going to enact it into law'."
Maloney, who chairs Congress' Joint Economic Committee, added: "I'm predicting by Memorial Day (May 25) we will have... a law."
The House of Representatives is expected to vote Thursday on Maloney's bill, dubbed the "Credit Cardholders' Bill of Rights."
Democrats, on behalf of the Obama administration, are expected to introduce a set of amendments including requiring card issuers to maintain low introductory teaser rates on credit cards for at least six months, and to warn card holders if they are about to exceed their credit limits, allowing them to avoid a penalty fee.
Maloney, who failed during a recent bill-writing session to insert a requirement for issuers to implement changes within 90 days of the bill becoming law, said another Democratic lawmaker will re-propose that provision for the House bill.
The Senate Banking Committee last month narrowly backed its own legislation. Senate Majority Leader Harry Reid said he plans to bring a bill to the floor for a vote sometime "in this work period," before the Memorial Day break.
In 2007, Americans used an estimated 694.4 million credit cardsWASHINGTON (Reuters) - President Barack Obama will sign wide-ranging, pro-consumer... more
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President Barack Obama, appealing to mainstream consumers, is pushing for more legal protection for the millions of Americans who use credit cards.
Obama was meeting with leaders of the credit-card industry Thursday, and he's already backing tougher legislation.
"The president believes new rules of the road for the credit card industry are needed," Obama senior adviser Valerie Jarrett said ahead of the president's planned session at the White House with executives from the nation's top credit-card companies.
Obama and some congressional leaders are particularly focused on what they consider to be abusive and deceptive practices that squeeze people into paying much higher fees or interest rates than anticipated. Both the House and Senate are considering a credit card "bill of rights" to limit the ability of credit-card companies to raise interest rates on existing balances and to require greater disclosure.
White House aides said Obama's meeting with the credit executives is part of a broader outreach to different segments of the business community.
At issue is how to protect consumers, particularly in a severe economic downturn, while not imposing the kind of rules that could make it harder for banks to offer credit or that put credit out of reach for many borrowers. Industry advocates are wary of those consequences and hopeful Obama will listen.
The Federal Reserve has already ordered new rules, to take effect next year, that are designed to enforce a host of new consumer protections.
Almost 80 percent of American households have credit cards. The average outstanding credit card debt for households that have a credit card was $10,679 at the end of 2008, according to CreditCard.com, an online marketplace designed to link consumers and card issuers.
The White House says Obama is aware of the importance that credit cards hold in many families, particularly as a last option during hard times.President Barack Obama, appealing to mainstream consumers, is pushing for more legal... more
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With the poor economical situation starring many college students in the face, they are forced to use credit cards as a financial crutch. According to a Sally Mae study, "based on surveys of 1,200 college undergraduates ages 18-24, [they] found 60 percent of the students were surprised at how high their balances were, and 40 percent had charged items despite knowing they couldn't cover the bill."
I personally do not own a credit card, but am still in over $5,000 in debt just from student loans. I can't imagine trying to pay off credit card bills at the ridiculously high interest rates from the credit card companies.
What are your thoughts and situations regarding credit card spending as a college student?With the poor economical situation starring many college students in the face, they... more
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WASHINGTON - The White House said Sunday that it will back congressional efforts to clamp down on credit card abuses in an effort to address the recession's effect on Main Street.
The House and Senate are considering a credit card bill of rights to limit the ability of credit card companies to raise interest rates on existing balances and to require greater disclosure. White House economic adviser Larry Summers said people need to save more, but that the government also needs to curb credit card pitches that addict people to plastic.
President Barack Obama is "going to be very focused, in a very near term, on a whole set of issues having to do with credit card abuses, having to do with the way people have been deceived into paying extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into," Summers said.
Summers said the administration wants to see a better-regulated financial system, encourage savings and eventually get back to a situation where government spending is not a drain on the economy.
"Individuals are going to have to save more, that's why savings incentives are so important," he said. "That's why we need to do things to stop the marketing of credit in ways that addicts people to it — so that our households are again saving, and families are again preparing to send kids to college, for their retirement, and so forth."WASHINGTON - The White House said Sunday that it will back congressional efforts to... more
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