I am, thankfully, a deadbeat in the eyes of the credit card companies, and will be using my credit-union-issued Visa exclusively from now on. The card will be left open to keep my credit score from dropping, but otherwise they lost me as a card-using customer.

@MostlyHarmless: There's a stratosphere of credit offered where limits aren't set. It's not that you so much as go over your limit, as you don't have one. We're talking mid-700's (FICO) to get one of those.

And some cards simply have a carry-balance limit; for instance, if you have a carry-balance limit of $15,000, you can charge as much as you want each month as long as you keep your unpaid balance under $15K. Very handy for people who pay off their credit cards every month.

Hello? It's a business (i.e., they exist to profit.) With the gaping divide between the utopian IDEA of regulation and the real thing in practice (thanks to the corporation-driven US government), you can bet your pretty little bank-owned home and vehicles there will never, ever be a chance in hell the credit card companies are acting in your best interest.

Explain to me how this ineffectual Credit Card "Law" dance is doing anything but let corps have an excuse to charge us MORE?

right now it looks like it's hurting us more than it's helping us, but that's only b/c the law hasn't taken effect yet. what amex did to you (reduce your limit so your utilization increases so they can charge you a higher APR) is exactly the type of practice that CARD is supposed to stop.

sure, this all sucks right now, but once the law goes into effect, you'll start to see pro-consumer changes. already, customers are closing accounts en masse at their displeasure with what cc cos. are doing & within 5 years, they will have to change their rates/terms for the better to bring those customers back into the fold.

credit cards are an extremely profitable business (2-4x more profitable than most other types of banking) - if the existing companies don't make the changes necessary to appeal to consumers, someone else will.

But wasn't the point of credit limits to protect the creditor (i.e. banks) from borrowers who would end up not being able to repay the loan? This smells like the whole subprime mortgage thing again.

Though, I wonder how much over your credit limit you can actually go.

Visa's reasonably popular around here, you just didn't see it at Tim Horton's because Tim Horton's couldn't make Visa bend over on the rates. :)

But, that being said, in my wallet I have 0 Amex, 2 Mastercards and 1 Visa. I pretty much exclusively use the Mastercards because they have way better rates and rewards. But the Visa is taken everywhere I go (Not a coffee drinker and I don't like the resuscitated donuts, so no TH for me!)

I love laughing at the US consultants we get when they tell me the only card they can use to buy things with is an Amex, because the company doesn't "do" Visa/MC/debit. I tell them to go to a bank and draw out that's weeks money in cash against the Amex, because they'll never be able to use it elsewhere. Takes them a day to realize I'm basically right.

I think Amex never took off because Canada does debit/credit cards VERY differently than in the US. Since Amex was originally a "charge" card, which meant it was much more similar to a debit card than a credit card, it occupied territory that didn't need occupying in Canada (Most retailers here will accept your "bank", ie: debit card right there for payment. No, it isn't labeled visa/MC/whatever as they are in the US, and visa/MC don't make a dime on the transaction). Why use a card you almost have to pay off instantly when you could just pay it straight from the bank account?

For those Canadians here wondering why minimarts bill you $0.50 for small debit transactions, that's because interac doesn't bill by percentage. They charge a flat rate per transaction (I think we got ours down to $0.15 at one point). So, for small purchases that happen a lot (like at a minimart) it'll kill the bottom line. But it's kick ass (for the store) for large purchases, which is why "cash only" stores that sell high ticket items (eg: Computer stores) usually will take debit, but not credit.

Oddly, I have two Amex accounts and only got one letter. Dunno if it applies to both. But in any case, it won't apply to me because I am never late or over the limits. Shrug.

Anyway, this was all a shock to me. I was stuck at Tim Hortons having to bum cash off my traveling companion because they would not accept Visa and I hadn't yet gotten to an ATM. In my time there, I didn't see anyone taking anything but Mastercard. No Visa or Amex.

I guess their version of "opt in" is that I can either accept the new terms or close my account. I will accept them because I am never late or over the limits anyway so this really does not apply to me.

But Amex is not your friend and is not doing a THING for customers these days. if they do something, it's universally for their benefit somehow. It may not be clear how but you can bet it is.

@wrjohnston19283: System? Doubt it, more like a database flag. They already have systems to deny transactions, they just have to modify it a little.

@shepd: Whoa, hold on there. AMEX is not the ONLY card that is accepted in Westren Canada. Most places take Visa and Mastercard, they simply also opt to take AMEX in addition to the other cards. I haven't seen a single retailer that only takes AMEX out here.

Credit cards ARE a useful financial tool when USED AS A TOOL. That is the key issue. If you're using it to avoid responsibility then obviously it will be a liability not a resource... but if a consumer is not managing their resources responsibly, then they are going to get into financial trouble with or without credit cards.

I promote credit card use proudly. Use them responsibly as a tool.

Keep in mind anyone who received those letters would have done so as a blanket mass mailer. If you've got good history, they will still work to keep you...

The credit market just got harder for the credit companies because of this bill, not easier.

@shepd: Not true, living in western Canada my whole life the only time I see an Amex card is when it's a Costco branded one.

On an entirely different but related note, Amex is the only card accepted AT COSTCO, and lots of farmers have Costco cards because they buy bulk there when they come in to the city, but the majority of people have Visa or Mastercard.

Amex supposedly has no pre-determined limit on their T&E card (Green, Gold, Platinum and Black) and I've used the card to buy a car so they probably mean what they say. Their other cards, Blue, Optima, have limits and are run just like Visa and Mastercard with interest and fees.

The overlimit fee is asinine. If there is a limit on the card, going overlimit is the same as requesting an increased limit. The card has the right to approve or disapprove. They will likely approve because they will be able to charge interest if the entire card balance is not paid, and they have a one-month risk window since the overlimit charges have to be paid in full. I would expect that the deletion of the overlimit charge will encourage people to go over limit and that makes no sense at all.

@Rugbydan: I paid off the only credit card I ever had two years ago, I'll never get another one. Now that my student loans are under control, I've been able to purchase my first car (all others were gifts from parents - think 1983 Buicks and 1985 Hondas, I was not pampered when it came to cars). The wife and I still make large purchases - well researched and paid with cash.

That's true - they are wonderful tools. You get some cash back, and are spending someone else's money for a month, all without paying anything for the privilege (so long as your card doesn't have an annual fee, you pay the statement balance in full, etc.)

They are not wonderful if you don't know how to properly use or if you have a tendency to abuse them, but if you know what you're doing, they're great.

They're going to raise APRs on purchases and advances, raise penalty APRs and increasing their late fees. It's not speculation now, it's fact.

So now, a $39 fee that rarely happens to any of their customers is going to be replaced by higher APRs and more common fees. I've never been overlimit on any card, but now they'll get what they were missing from me within a couple months!

As for the APR hike? I had excellent credit with something like 12% utilization. In the past yr Amex has consistently knocked down my max limit though I've never been late on any payment anywhere, and never spent a dime on their card over the initial balance transfer some two+ yrs ago. Because their card line went from something like 10k down to $3600, my utilization has "jumped up" and now I'm on the cusp of good/excellent.

That means they could conveniently push up my APR from the 9.99% it was supposed to be "FIXED" at to 11.24%. Now it will jump to 15.24% to make up for the new "law." Explain to me how this ineffectual Credit Card "Law" dance is doing anything but let corps have an excuse to charge us MORE?

Here's the letter front and back for anyone who hasn't gotten theirs yet:
front - back
(I love how they're "pleased" to let us know about these fantastic changes.)

Consumerist, pleasepleaseplease return to the good guys I know you are and don't give the credit companies even a fraction of "good publicity" that they DON'T DESERVE!

Indeed. Loan sharks are much less than 31.99% from Bank of america as well.

Another thing people probably don't realize, is that if you stop paying your card payments, (assuming you give a damn about your credit reports), within 6 months the account will be written off and be sold to collection agencies. The good part of that is, the interest stops cold, forever. If you're facing insurmountable bills with no way out, this can actually save you money in the long run. Yes, they will jack your interest to the maximum rate they can during that time, but once it goes to collection, the interest is done. After that, you're dealing with a fixed number. (whether you decide to pay it or not).

They are anything BUT "wonderful financial tools". Credit cards are designed to put you in debt. Nothing more, nothing less. All the rewards and miles and bribes they offer up on a silver platter is intended to get you to spend money you don't have, put you in debt, and keep you there paying interest for life. This is the ONLY reason credit cards exist. They do not exist to "help" you.

If you have the militant discipline to stay on top of them and avoid 100% of the interest charges, then you are in the minority. Feel proud that you have gamed their own system, because that's not what it's designed for.

Nobody should ever be "promoting" credit card use. Consumer debt is in the TRILLIONS. Most of that will NEVER be paid back. Lives are ruined over credit cards. So you can't sit there and tell me that credit cards are a wonderful financial tool for the consumers using them. Maybe for the companies handing them out they are.

I often get a discount for cash. I never have to pay interest on cash, so that's "cash back" right up front. Purchase protection is built into my receipt.

Amex is 5% (at least when I ran a store). Everyone else was a bit under 2%.

Guess which card I charged a extra 5% to customers for accepting? And guess what I told the one customer a year that used Amex when they said that they could stop me accepting Amex over it?

Yeah, that's right. One customer a year. Amex is incredibly unpopular around these parts. I am told it's almost the only card accepted out in western Canada. But here in southwestern Ontario, you'll rarely find a smaller retailer that will accept it. Just the big stores that can eat the occasional 5% loss.

@smarty: I think in some respects it is more fair to not penalize just for going over a limit . As long as the individual pays or keeps up with that credit card even if it's the minimum payment I say more power to them . As long as you had good credit with someone and they report that to credit agencies then go ahead .

The flip side of the coin is that there are golf balls out there that fail to realize paying the minimum every month will take years if not decades to pay off . But if it helps that individual rather than pay by cash go ahead .

Then there are those that say by letting the financially stupid go over their limit is nothing more than predatory lending . But is it or are they . There have been times in my life I had 5-8 cards going at one time paying minimum payments . It got me stuff and through some thin times . I did pay them down/off and I have been using 1 card for years now .

There are people that can raise their limit without catastrophic results and the credit card companies get to make money this way rather than with fees and penalties .

Amen - credit cards are wonderful financial tools, so long as you're paying them off every month.

Because they have all those salaried tech people sitting around twiddling their thumbs. IT costs are substantially variable.

Fine by me. If you want to give up cash back and purchase protection, be my guest.

Yes, I would. Goddamn face had it coming.

No, I don't use credit cards, or the credit system in any way. I am a very vocal anti-credit advocate. Destroy your cards, freeze your reports, and live in the CASH system.

For people who keep a balance on a card, the rewards are very... rewarding... considering all the interest you're paying. You'd be better off ditching the card and saving money every month for that plane ride.

Well, this looks like a double win for the consumer: no over-limit fee and if the credit card issuers do what they should they will now decline charges over the limit. The declined charges will help consumers stay in check of their finances & pay more attention. I bet the "convenience" that card issuers used as the excuse to let people go over limit will end now that the gravy train is over with the fees. Also it is funny how the issuers have argued for years that this was a practice for the consumers' "convenience" so that charges wouldn't get declined: if so, a lot of people would opt-in, the banks know better than to invest money (programing/implementing the opt-in process) in that being true.

@Corporate_guy: I thought that fees were about 3% for Amex. How do they afford to reimburse me 5% on my gas, grocery and drug store purchases without other fees?

Funny, card companies had NO problems with turning a profit in the 50's-80's before they started the fee-wagon.

@Coles_Law: *risk.

@MostlyHarmless: Aargh-comment go "poof" into the ether. My BofA has this setup. essentially they approve or deny each overlimit charge based on rish, history, sheep entrail readings, whatever. There's no fee and no higher APR, but you have to pay the overlimit amount plus the minimum at your next bill.

@MostlyHarmless: My B of A card has this setup-no overlimit+credit limit. I've never gone over limit, but from my cardholder agreement they will approve or decline each overlimit charge based on their magic 8-ball or whatever they use. You have to pay any overlimit amount in addition to the standard minimum at the next billing cycle though. (This doesn't mean AmEx et al. will do the same.)

but if you're that in over your head, saving the $39 overlimit fee isn't going to affect much. once they reach their limit, then the interest hits, $39 is a drop in the bucket.

I would hope that they are unable to purchase above their credit limit... even though that seems to be questionable.

I think it won't be profitable under the new law, with the opt-in. They will have to set up a computer system to determine who will be allowed to go over their limit and who won't be. Since not many people will opt-in to this program, the costs associated with setting up the database and approval systems will be so great that the income from the few customers who opt-in won't be worth it.

They were making good profits on their normal rates- they just found a way to rake us over the coals. Now they will have to go back to basics. I think(hope) the huge losses they took is going to allow for a reset.

Were you being sarcastic? How can a $39 fee for a computer to allow a transaction to go through not be profitable?

@RumorsDaily:

Not really. What is going to be interesting (to me) is how the companies that choose to do this make up the shortfalls.

AmEx will still let spendthrifts exceed their credit limits, but they will no longer charge for privilege.

Whats the point of the credit limit then? Are there some special things that kick into action at this point? Like higher rates for whatever amount you spend over your credit limit? Or that it limits your chances of being approved for credit or something?

@Skin Art Squared:

It's called Fight Club. Dreams = Delivered.

I can smell another bail out.

Well at least I don't have to worry about the $131 of available credit left on my card anymore :) BSG on Blu-Ray here I come!!!!

Creditors are universally responding to the consumer protection measure by raising rates and cutting rewards.

Well, yeah, the law eliminated a number of ways in which the companies used to make money. In order to remain at their current profit-levels, they're going to need to compensate in other areas. This wasn't surprising to anyone, was it?