This Federal policy has good intensions it sounds like but the card companies will find a way to make this lost money back in a different way, so overall it probably won't be that effective.
Saturday, February 20, 2010
Credit-Card Fees: the New Traps
This article discusses the new policies the Federal Government is placing on credit card companies. Basically the government has told the credit card companies that they have to be more responsible in letting their customer know where they are with their credit, and can only over spend on their cards if they agree ahead of time to pay huge interest on what they over spend. This has left the card companies out of an estimates 12 billion dollars a year, so know the card companies are looking for ways to make that back. With drawing money out of country will come at a big expense, and paying the monthly minimum will also wind up giving you much higher interest rates.
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I actually think these new laws are a good idea. Although it is bad for credit card consumers, these laws will force people to keep up with their finances and teach them not to live beyond their means. On the other hand, since this is tremendously cutting credit card companies revenues more costs will be pushed to the consumer, which will greatly raise the price of having a credit card. I can only imagine all the new fees which will be charged and hidden fees!
ReplyDeleteThe new laws seem good in the sense that the notifications should protect credit card holders from unexpected rises in the interest rates and other penalties. But the credit card companies will lose so much revenue that they will make consumers pay for it. I'm not sure if, with all the new fees and reductions in rewards, credit card users will be any better off.
ReplyDelete~Cassie
I feel that this new policy will have a negative effect on the economy. As consumers, in order to help the economy, we need to be spending our money instead of saving it all. In order to jump the economy, we need consumer spending. With this policy, this will only stop consumers from spending. Over all, this I think is a dumb policy in a hurt economy.
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