Will A Credit Card “Bill Of Rights” Help Produce Low Interest Credit Cards?
Summary about 0 Interest Credit Card By Aubrey Clark
0 interest credit card
US congressman Mark Udall thinks so; he has just presented legislation to the US Senate that out-lines his version of a “Credit Card Bill of Rights”. The gist of the bill is to force credit card companies to send notice of a rate increase prior to raising your rates. For instance, the bill will freeze rates and terms on cards that are canceled by the credit issuer.
The bill seeks to revoke the credit card issuers rights to raise rates for credit activities unrelated to their account also known as universal default. As if that weren’t enough, the bill also seeks the halt of charging over the limit fees on approved transactions. Predictably, the bill is expected to meet fierce resistance from the credit card lobby.
The argument is; “that without these necessary fees many people will have to do without credit cards and pay higher rates”. Also, some in Congress are wondering if now is the right time to be passing financial legislation that could further injure the financial sector.
The credit card industry is akin to the sub-prime mortgage industry before the collapse. If we have we not learned anything we have learned this; overcharging customers with shaky credit to produce volume is a recipe for disaster.
Just as in the mortgage market, the credit card industry needs to shift gears and bite the bullet. Instead of dreaming up elaborate new fees to raise revenues to cover increasing losses they should streamline their approvals to less deserving card applicants. Of coarse, this would result in lower revenues, lower corporate bonuses and threaten CEO jobs industry wide.
We now find ourselves in a financial deja vu, the credit card industry has the chance to head off destruction by making the obvious changes.
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