Credit Cards

At various times in my life I have had to resort to using my credit cards in order to survive. It was not a choice I wanted to make, it was out of necessity, and it has gotten me into trouble. They were a lifeline, and not always used for luxuries (although I have been guilty of overspending at Christmas and spoiling my family as well). In the last few years, however, I have been working hard at bringing those balances down because I don't want to be in debt anymore.

That being said, I want to rant about the banks and credit card companies who are taking advantage of people, and this new bill will not do much to make things better (although any attempt to rein in the runaway train is better than none).

When people make their payments on time, and do not abuse their cards, they should not be penalized with increased rates and lower limits. They should be rewarded to keeping the banks in business. Banks should not arbitrarily raise rates because they don't know how to run their business. The object is to advance credit to people who have a proven record of paying it back, and they in turn earn the interest these people pay to stay in business.

Banks have had too much leeway in the last decade. They charge astronomical fees, give less in interest on savings, and gouge those who can not afford it with higher rates, while giving lower rates incentives to those who have money. It has caused a lot of problems for this country - and yet the government bails them out when they get into trouble.

It is true, the collapse of the banking industry would be catastrophic to our economy, but handing them money to regroup without adding major strings was a big mistake. Some took advantage of it by buying even more banks who were financially in trouble. That does not sound like fiscal responsibility to me. They don't have to fund major sports arenas (let the owners do that), or offer bonuses to the same people who got them in trouble in the first place.

By withholding credit from businesses and people in need, who have shown the responsibility to pay back the loans, has done more damage to our economy than their poor judgement in the mortgage market. By making up those losses on the backs of the credit card holders is just another irresponsible act from people who don't really understand basic economics.

I have a few examples of stupid policies that hurt the consumer and make the banks fatter:

Example 1: When your due date is - say June 1, and you make your payment on June 1, or even May 31, you are NOT late! Computers have the capacity to process the payment on the same day it is paid online, and there does not have to be a 2-business day processing time.

Example 2: Making a payment online should NOT cost you $7 more than if you send it through the mail! A payment online does not require a PERSON to open the mail, locate the account, and enter the information. Online the money is wired from one bank to another.

Example 3: If you are one day late on your account you are showing in the credit reporting agencies as being late - up to 30 days! This brings down your credit score and allows the bank to notify other banks so they can raise your rates. Banks should not be able to access your credit report unless you are over 60 days late, unless you have given them written permission to do so. Too many people have access to your reports as it is, without your permission - and then they wonder how the identity theft crisis is rising. Prospective employers, current employers, banks, lending institutions and Joe the Plumber, all can access your credit report - and much easier than you can. (Try to get an error taken off your own report - it's like fighting the Hydra, you cut one head off but you still have eight more to fight!)

Before the government passes a new bill on credit cards, they need to confront a few more issues. This is too lightweight. Granted - the lobby for the banks and credit card companies is HUGE, and we are lucky to get any kind of reform. The problem with these bills is that politicians are trying to play both sides of the fences - getting re-elected and not making enemies (or losing campaign money) from the industry. I haven't come up with a workable way to get the best bill for the people passed without going through the bureacracy yet, but why waste our money on bills with no teeth? The best time to get the reforms done, without all the red tape and bull, was when we gave them the bailout money to start with!

Well, that is my rant for the day. Don't stop me now!