Comments on: Changes to the Credit Card Industry – Credit CARD Act of 2009 http://cashmoneylife.com/2009/05/20/credit-card-act-2009/ Money Management, Small Business, Career Sun, 21 Mar 2010 02:34:22 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Ari http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-19418 Ari Fri, 21 Aug 2009 21:42:46 +0000 http://cashmoneylife.com/?p=1604#comment-19418 It can affect a car loan if the loan is written as what is called open-ended lending. This mainly affects credit unions (I work at one), as banks normally don't do open-ended lending. The card act was supposed to only affect credit cards but because of the wording that was put in at last minute(without any input from the industry) it affects all open-ended loans which means auto loans, personal loans, lines of credit, etc. This does not affect mortgages or home-equity loans. Basically the loan mandates that the statement has to be delivered and be sent out 21 days in advance of the billing period, so weekly or bi-weekly is not possible because there is no way to be in compliance. This is the one part of the law that I and my coworkers agree is bad- everything else will mostly benefit consumers. I agree that Ryan's suggestion to set up auto-pay to make your normal payments is the best bet, and that is what we are going to be recommending our members do. It can affect a car loan if the loan is written as what is called open-ended lending. This mainly affects credit unions (I work at one), as banks normally don’t do open-ended lending. The card act was supposed to only affect credit cards but because of the wording that was put in at last minute(without any input from the industry) it affects all open-ended loans which means auto loans, personal loans, lines of credit, etc. This does not affect mortgages or home-equity loans. Basically the loan mandates that the statement has to be delivered and be sent out 21 days in advance of the billing period, so weekly or bi-weekly is not possible because there is no way to be in compliance. This is the one part of the law that I and my coworkers agree is bad- everything else will mostly benefit consumers. I agree that Ryan’s suggestion to set up auto-pay to make your normal payments is the best bet, and that is what we are going to be recommending our members do.

]]> By: Ryan http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-19304 Ryan Wed, 12 Aug 2009 02:31:54 +0000 http://cashmoneylife.com/?p=1604#comment-19304 Heather, I can't speak for your specific loan because I don't know the details... But you should be able to set up your payments on auto pay, and so long as you pay enough to cover the payment each month by the due date, you should be fine. The payment should be applied the day it is received, so it should result in less interest being paid over the long run (because the first payment is applied before a full month's interest is earned). This is a great way to reduce your debt more quickly. Heather, I can’t speak for your specific loan because I don’t know the details… But you should be able to set up your payments on auto pay, and so long as you pay enough to cover the payment each month by the due date, you should be fine. The payment should be applied the day it is received, so it should result in less interest being paid over the long run (because the first payment is applied before a full month’s interest is earned). This is a great way to reduce your debt more quickly.

]]> By: Heather Johnson http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-19303 Heather Johnson Wed, 12 Aug 2009 00:26:36 +0000 http://cashmoneylife.com/?p=1604#comment-19303 Hi Ryan, Thanks for the info. Are you saying we can set up the auto bill pay with our bank and just keep paying bi-monthly so that by the end of the month (when they have our due date on the 28th) it will be paid in full for that month? I didn't know we could do that and our credit union certainly didn't suggest it either. at least that would keep our budget the same. I've never had anyone change a car loan mid-way through like this. The credit card act may be a good thing for some of the things it is doing but this part of it is really messed up when it affects all your other loans. Thanks again for the response. Hi Ryan,
Thanks for the info. Are you saying we can set up the auto bill pay with our bank and just keep paying bi-monthly so that by the end of the month (when they have our due date on the 28th) it will be paid in full for that month? I didn’t know we could do that and our credit union certainly didn’t suggest it either. at least that would keep our budget the same. I’ve never had anyone change a car loan mid-way through like this. The credit card act may be a good thing for some of the things it is doing but this part of it is really messed up when it affects all your other loans. Thanks again for the response.

]]> By: Ryan http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-19294 Ryan Tue, 11 Aug 2009 15:10:18 +0000 http://cashmoneylife.com/?p=1604#comment-19294 Heather, It might affect all loans, I'm not sure. You should still be able to pay twice per month regardless of whether they send you a statement. Just set up your auto bill pay to continue making the bi weekly payments. They should continue to credit your account as they have in the past. Heather, It might affect all loans, I’m not sure. You should still be able to pay twice per month regardless of whether they send you a statement. Just set up your auto bill pay to continue making the bi weekly payments. They should continue to credit your account as they have in the past.

]]> By: Heather Johnson http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-19287 Heather Johnson Mon, 10 Aug 2009 22:57:11 +0000 http://cashmoneylife.com/?p=1604#comment-19287 Since you work for a bank as you say and support this, please tell me why my credit union has sent me a letter stating that this bill affects my car loan? I have 2 cars financed with them over the last 2 years and I pay them bi weekly, so i have a car payment taken out every week to pay for them both. Now they are saying that due to this credit card act they can no longer offer bi-weekly deductions (it come straight out of my bank account with them) because they won't be able to bill me 21 days in advance in a statement. The problem is they don't send me a statement, never have in 2 years! so now they want to make $1200 a month in car payments due on the same day every month and I get to pay $100 extra a month that i was saving by paying twice a month. My arguement with them is that I don't get a statement to begin with! Please let me know how this is part of the credit card act. Since you work for a bank as you say and support this, please tell me why my credit union has sent me a letter stating that this bill affects my car loan? I have 2 cars financed with them over the last 2 years and I pay them bi weekly, so i have a car payment taken out every week to pay for them both. Now they are saying that due to this credit card act they can no longer offer bi-weekly deductions (it come straight out of my bank account with them) because they won’t be able to bill me 21 days in advance in a statement. The problem is they don’t send me a statement, never have in 2 years! so now they want to make $1200 a month in car payments due on the same day every month and I get to pay $100 extra a month that i was saving by paying twice a month. My arguement with them is that I don’t get a statement to begin with! Please let me know how this is part of the credit card act.

]]> By: Ryan http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-18443 Ryan Sat, 06 Jun 2009 19:09:46 +0000 http://cashmoneylife.com/?p=1604#comment-18443 <strong>Becca: </strong>Thanks for sharing your perspective and the perspective of the companies, very well stated. The only thing I can add is regarding the over the limit fees. Once upon a time credit card companies simply wouldn't allow charges to be made if it would take the card holder over their limit. Now some companies not only allow it, but welcome it. The new legislation allows card holders to turn that feature off and not be allowed to make charges over the limit. I think it's great. There are a few other changes to the legislation I think are good, such as standardized billing requirements and a few other things. I think simplification is better. Thanks for sharing. Becca: Thanks for sharing your perspective and the perspective of the companies, very well stated. The only thing I can add is regarding the over the limit fees. Once upon a time credit card companies simply wouldn’t allow charges to be made if it would take the card holder over their limit. Now some companies not only allow it, but welcome it. The new legislation allows card holders to turn that feature off and not be allowed to make charges over the limit. I think it’s great.

There are a few other changes to the legislation I think are good, such as standardized billing requirements and a few other things. I think simplification is better.

Thanks for sharing.

]]> By: Becca Nunya http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-18436 Becca Nunya Fri, 05 Jun 2009 22:49:21 +0000 http://cashmoneylife.com/?p=1604#comment-18436 I actually work for one of the banks that will be affected by this change. I used to feel the same way every consumer feels about banks and fees until I started working here. Its not because I love the company....it's because I realize how irresponsible some consumers are about the logistics of agreeing to use their credit card. Here are my following thoughts: #1-Consumers are not taught financial responsibility (unless they grow up with accountants as parents). When I tell someone a fee or condition of their account is in their Terms and Disclosures that they agreed to when they filled out the application their response is "No one really reads any of that stuff". That statement completely baffles me...if you dont read it how d0 you know what you're actually signing?? You might be signing away your house. There are so many options out there for people to become knowledgable about stipulations and conditions about credit, finance, loans, credit cards...PLEASE people use google!!! lol #2-Fees are associated to credit cards for REASONS! If they didnt have late fees, everyone would be late on their payments. If they didnt have overlimit fees, everyone would use their card in excess to their credit line and there would be no reason for credit limits all together. There is a processing fee that most banks have to pay when you pay over the phone from another financial institution. Thats why banks give other options to make payments (i.e. mail, at a bank, or online). If you dont like the $10 fee...use a $0.44 stamp or pay $29.99 for internet service (or get a library card) #3- Most interest rates are increased based on Risk Level. If you go from owing $1,000 to $12,000 in 6 mos you are more likely to default on your responsibilities based on financial statistics. Im not saying all people do...some people have different situations like opening up a business or got a commission at work and can pay it off but MOST DONT FALL INTO THAT CATEGORY. Based on the current economic situation everyone is having a hard time and banks understand that. If you arent able to make your payments and you ask for a lower rate but all they can offer you is a reduced payment for twelve months but no lower rate if you say thats not going to make a difference YOURE WRONG. Yes you may be still accruing interest at that rate but instead of making life decisions at the grocery store or gas station you know that despite you still having the same interest rate you are able to feed your family. It might take you a longer time frame to pay off the balance but at least you wont affect your credit report and still have the opportunity to continue with a good payment history. #4-Please start reading information and passing it on. Educate your children...teach them responsibility and accountability with money. You dont have to be a Business Major to know this stuff. I know Business and Accounting Majors who are in more credit card debt than anyone else I know. Please people....start taking responsibility for your own actions. If you are late, dont lie and say I tried to call and you were closed or go online and it wouldnt let me pay (we can now track this stuff :) Just say you messed up and forgot or didnt have the money. WE LOVE HONESTY!!! #5-Set Your Emotions Aside: If you are calling your bank...most times you wont get the same person you talked to before. The person on the line has no idea about the situation and is trying to help you (well most of us :) We understand people get upset about their money because alot of people are strapped right now. Being nice is the best way to get stuff done. Cursing, yelling, and calling people names or incompetent is a guaranteed way to get the least amount of service on your account. The nicer you are the more out of your way people are willing to go. Remember we are humans too, just because we work for a company youre mad at or because your day was JACKED up does not give you the right to yell at us. In closing( i know this was long) lol Credit Card companies are a business they have to make money. If you dont like a particular company...trust me there are others out there. Take your business somewhere else. But be aware that they have Terms and Conditions with their credit cards. And make sure you read the DANG AGREEMENTS!!! lol Love yall I actually work for one of the banks that will be affected by this change. I used to feel the same way every consumer feels about banks and fees until I started working here. Its not because I love the company….it’s because I realize how irresponsible some consumers are about the logistics of agreeing to use their credit card. Here are my following thoughts:

#1-Consumers are not taught financial responsibility (unless they grow up with accountants as parents). When I tell someone a fee or condition of their account is in their Terms and Disclosures that they agreed to when they filled out the application their response is “No one really reads any of that stuff”. That statement completely baffles me…if you dont read it how d0 you know what you’re actually signing?? You might be signing away your house. There are so many options out there for people to become knowledgable about stipulations and conditions about credit, finance, loans, credit cards…PLEASE people use google!!! lol

#2-Fees are associated to credit cards for REASONS! If they didnt have late fees, everyone would be late on their payments. If they didnt have overlimit fees, everyone would use their card in excess to their credit line and there would be no reason for credit limits all together. There is a processing fee that most banks have to pay when you pay over the phone from another financial institution. Thats why banks give other options to make payments (i.e. mail, at a bank, or online). If you dont like the $10 fee…use a $0.44 stamp or pay $29.99 for internet service (or get a library card)

#3- Most interest rates are increased based on Risk Level. If you go from owing $1,000 to $12,000 in 6 mos you are more likely to default on your responsibilities based on financial statistics. Im not saying all people do…some people have different situations like opening up a business or got a commission at work and can pay it off but MOST DONT FALL INTO THAT CATEGORY. Based on the current economic situation everyone is having a hard time and banks understand that. If you arent able to make your payments and you ask for a lower rate but all they can offer you is a reduced payment for twelve months but no lower rate if you say thats not going to make a difference YOURE WRONG. Yes you may be still accruing interest at that rate but instead of making life decisions at the grocery store or gas station you know that despite you still having the same interest rate you are able to feed your family. It might take you a longer time frame to pay off the balance but at least you wont affect your credit report and still have the opportunity to continue with a good payment history.

#4-Please start reading information and passing it on. Educate your children…teach them responsibility and accountability with money. You dont have to be a Business Major to know this stuff. I know Business and Accounting Majors who are in more credit card debt than anyone else I know. Please people….start taking responsibility for your own actions. If you are late, dont lie and say I tried to call and you were closed or go online and it wouldnt let me pay (we can now track this stuff :) Just say you messed up and forgot or didnt have the money. WE LOVE HONESTY!!!

#5-Set Your Emotions Aside: If you are calling your bank…most times you wont get the same person you talked to before. The person on the line has no idea about the situation and is trying to help you (well most of us :) We understand people get upset about their money because alot of people are strapped right now. Being nice is the best way to get stuff done. Cursing, yelling, and calling people names or incompetent is a guaranteed way to get the least amount of service on your account. The nicer you are the more out of your way people are willing to go. Remember we are humans too, just because we work for a company youre mad at or because your day was JACKED up does not give you the right to yell at us.

In closing( i know this was long) lol Credit Card companies are a business they have to make money. If you dont like a particular company…trust me there are others out there. Take your business somewhere else. But be aware that they have Terms and Conditions with their credit cards. And make sure you read the DANG AGREEMENTS!!! lol

Love yall

]]> By: Ryan http://cashmoneylife.com/2009/05/20/credit-card-act-2009/comment-page-1/#comment-18274 Ryan Fri, 22 May 2009 03:04:18 +0000 http://cashmoneylife.com/?p=1604#comment-18274 <strong>Dan: </strong>After putting more thought into it, I agree with you. I was thinking from a consumer perspective, and that isn't the right way to think. It is more convenient for everyone involved, but it should not be driven by law. Dan: After putting more thought into it, I agree with you. I was thinking from a consumer perspective, and that isn’t the right way to think. It is more convenient for everyone involved, but it should not be driven by law.

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