Credit card “reform”:just another hoodwink and bamboozle

There was a time when I associated the Democratic Party with liberal ideals and considered them to be champions of the working class and the poor.  Where did that party go?  From FISA, to FOCA, to torture, to bank give-aways, to abandoning real healthcare reform, and to so-called stimulus packages that brought nothing more than increased unemployment and devastating debt to be passed on to our heirs, their actions are nothing like the party I once knew.  It wasn’t like this during the Clinton years.  Bill Clinton defined for me and many others what being a Democrat meant.  Because of Bill, I not only voted for Democrats, I fought like hell for Democratic candidates.  I gave of my time and my money – both precious – to see that as many candidates from this great party were seated in the highest offices of government. I wanted to sustain the good times for the middle class and I wrapped my hopes in the idea that someday Hillary would return to the White House and take us back to the days of peace and prosperity we had with Bill. But somewhere my party took a decidedly right turn.  They continued to wear their “D’s” but failed to maintain the precious ideals of the party; and on one issue after another, these counterfeit Dems failed us and they continue to do so, with each and every bill they pass.

As an example, let’s look at the alleged credit card reform recently signed by our president.  If past history was any indicator, his vote against interest rate caps should have been sufficient warning (remember his famous “they weren’t low enough so no cap is better than some cap” answer during the debates?), so I guess I cannot say I was surprised to see more snake oil coming from this faux Dem administration.  I was however dismayed to hear the problem defined as a consumer-driven one; because of course, as Obama says, the problem with credit cards is:

“…those who buy more than they can afford through “reckless spending or wishful thinking.”

and that

“Some get in over their heads by not using their heads,” the president said. “I want to be clear: We do not excuse or condone folks who’ve acted irresponsibly.”

Gee, President Obama, thanks for the lecture.

Maybe if he lived in the real world he’d know that there are people out here without jobs that are using their credit cards for extravagant purchases like groceries and healthcare.  Yes, it’s funny what that silly survival instinct does to people. All you irresponsible folks splurging on food and medicine can just tighten your belts and go without those luxuries.

In any event, a major part of the bill gave credit card companies a full nine months before they would have to abide by any of the changes, such as the requirement to provide advance notice before raising interest rates (In other words, they now have to stab in you in the heart not the back).  However, I guess it’s not all bad because there are some consumer protections in the bill such as:

Under the bill, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender would be required to restore the previous, lower rate if the cardholder pays the minimum balance on time for six months.

Consumers also would have to receive 45 days’ notice and an explanation before their interest rates increased.

Unsurprisingly, real reform measures such as credit card interest rate caps may happen someday, but not with this bill:

Left out of the bill, thanks to credit card industry lobbying: Two proposals to impose rate caps of 15 percent and 36 percent annual percentage rate on credit cards and other loans.

So how do you think these credit card companies are using their nine month grace period?  I’ll give you three guesses, and the first two don’t count.  Yep, they’re using this time to figure out how to gouge us even more.  I’ve already heard stories of people having their interest rates doubled during this pre-bill implementation period, and now it appears that they’ve figured out the perfect way to circumvent every pro-consumer provision of this bill and drain the last few pennies from our piggy banks.  They are accomplishing this end run by shifting away from “fixed” interests rates and moving towards variable rates.

Now, isn’t that special? But hey, we’ve still got that great guarantee of at least 45 days notice that Obama and co. put into the bill as I mentioned above, right?    Wrong.

“The changes will make it easier for issuers to bump up the rates they charge without notifying cardholders. By contrast, fixed-rate cards typically must first mail a notice to clients announcing any rate changes. The changes come at a time when issuers are rushing to comply with new legislation that will soon limit their ability to raise rates on existing balances, require them to notify customers at least 45 days in advance of any changes to their terms, and make them eliminate other confusing practices.”

So, Charlie Brown meet football – again.  But hey, who are we to complain?  The credit card problems are all our fault anyway, right?

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