New Credit Card Rules Designed to Help the Consumer
President Obama is poised to sign a new credit card consumer protection bill into law as early as this week. The new bill is designed to provide some relief to the American consumer during this time where many are dealing with a loss of job or decrease in hours. In what appears to be a slam dunk, this bill is being hailed as another way the government is looking out for the average citizen.
“This is a victory for every American consumer who has ever suffered at the hands of a credit card company,” said Sen. Christopher Dodd, D-Conn., chairman of the Banking Committee. The bill passed the Senate 90-5.
In addition to limiting excessive fees and out of control interest rates, the new law will force credit card companies to make several changes to the way they do normal business. If signed into law credit card companies will have 9 months to:
- post their credit card agreements on the Internet
- provide ways for customers to pay their bills online or by phone without an added fee
- provide 45 days notice and an explanation before interest rates are increased.
The biggest problem I have with the bill is that it is basically trying to legislate common sense. Using a credit card can be dangerous and many people who have them really shouldn’t. Another aspect of the bill will require that some sort of evidence be provided that shows you really can make your payments.
the Senate bill requires those under 21 who seek a credit card to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.
If you can’t pay back the debt, then you have to have a parent or guardian that will pay it off for you? Basically, you need to find someone that will cosign your application and bail you out, if/when you prove that you are not capable of paying back what you borrow. How silly does this sound? If they are going to revamp the credit card industry, why don’t they simply prevent those that shouldn’t have a credit card from getting one? The idea of getting someone to cosign your application is a lot like getting someone to cosign a loan. The bank knows you won’t be able to make the payments, so they require that someone agree to pay it back for you. Not only does this not make sense, but Biblically speaking it is wrong.
We used to teach our kids to take responsibility for their actions. Now we are about to pass a law that forces the credit card companies to make it easier for you to not take responsibility. I am all about helping people get out of their financial mess, but I believe we should be teaching people to budget, save and repay their debt instead of easing the consequences of years of bad decisions.
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