Saturday, January 23, 2010

The More Things Change....

Good Lord, after trying to ignore politics for so long, I raise my head just for a minute to check out the political landscape and find that things have gone from bad to worse. The Supreme Court recently decided that the problem with the country is that corporations don't have enough power and influence. Poor little fellers, their desires and needs are being overridden by the greedy old People. So, in a new ruling, the Court, in its wisdom declared corporations to be persons, just like us, in terms of how much money they can contribute to campaigns. If you thought the banks and insurance companies threw their weight around before, just wait. Their ruling is actually a little more complex than that but that's the gist.

And speaking of banks, the new credit card rules go into affect on February 22. The new law, known as CARD (Credit Card Accountability, Responsibility and Disclosure Act - does Washington employ a whole battery of people, paid for by us, just to come up with these catchy acronyms?) does several things to help consumers including declaring that any payment beyond the minimum must be applied to the debt with the highest rate and not allowing card companies to charge fees based on how a customer pays (on-line, by phone, etc), and disallowing the use of a double billing cycle.

But....did you have any doubt that credit card companies would come up with new and clever ways to rip off their customers? One way isn't especially clever, it's just blatant. According to an article in Market Watch by Chuck Jaffe, First Premiere Bank has come out with a card with a 79.9 percent interest rate. Yes, you read that right - 79.9 percent!

It's almost like First Premiere is telling Congress - "so, you think you want to play rough, we'll show you what rough is really like."

Other things banks are doing are initiating annual fees on cards that haven't included annual fees in the past and I love this one - they're adding "inactivity fees" to capture people who don't use their credit cards at all for long periods of time. Card companies are moving to variable rate cards because they'll no longer be allowed to raise rates on fixed rate cards. The variable rates will be tied to the prime but it isn't straightforward, rather they have a tricky way of doing it that brings in more $$ for them.

There are other changes planned, most of them over the head of the average consumer even if revealed in a Disclosure Statement.

The more things change, the more they stay the same.