Credit card experts said card issuers are clearly trying to improve their images after months of defending themselves for raising interest rates and cutting credit lines for even their most creditworthy customers. Consumers have been increasingly turning away from credit cards. Revolving credit, mainly credit card debt that consumers do not pay off in full each month, fell $6.1 billion in July, according to the Federal Reserve.
"It's stiff competition in terms of trying to regain consumer trust," said Curtis Arnold, founder of CardRatings.com, which compares credit cards, "and trying to regain loyalty among cardholders."
The Chase Blueprint program applies to existing cards. It allows customers to choose categories of spending to pay off every month, and helps calculate ways to pay off balances more quickly. Meanwhile, the Bank of America Basic card has no overlimit fees, and charges the same interest rate, fourteen percentage points above the prime rate, for all transactions.
It's a sad commentary on the current state and reputation of the industry that when credit card companies introduce features designed to help and not confuse customers, it's newsworthy.
Credit Card Firms Offering Simpler Deals Ahead of Law [Washington Post]
(Photo: frankieleon)
]]>DOWn, baby, DOWn!
]]>I have a couple of accounts that I'm paying off 0% balances on. No changes to those (and they're with the dreaded BofA and Chase). Discover moved my due date up by a few days, but since I actually look at my bill and check the due date every month before paying it, it wasn't a problem. Well, it was a small problem, because the new date didn't fit with my budgeting, but that was easily fixed - I went to their website and picked a due date that worked for me.
Granted, it's only my experience and may not be representative, but not EVERYONE is getting screwed by the CC companies.
It is all about planning and deciding if you really need things "right now" or if they can wait. Heck I waited over 3 years to get my LCD TV, which I was able to buy without carrying a debt for it.
Right now 90% of the country is employed and of those 10% that are not, at least 4% don't want to be. I am willing to bet that the ones in big debt, a small percentage are because of unemployment, and the reason that they are is that the credit cards allowed them to continue their lifestyle even after they lost their job.
]]>It sounds like a good idea, especially if you want to get rid of your balances. But I think the OP is right - after many months of jerking around accountholders and trying to cover their lost profits from the CARD act by hiking fees and cutting credit limits, they're trying to play nice. What they should have done is not give in to their appetite for money and not tried to anger responsible card holders - or at least the ones who make a mistake once in a while.
That's what the CARD act was designed for - to keep the card companies honest, not to give the companies a short window to attempt to maximize their fees. And that is exactly why people are paying off their bills when they can and sockdrawering their cards - they're fed up with the mind and money games. Myself included.
]]>@GTI2.0: While you're snarky response makes you a total dickface since usa_gatekeeper prefaced his comment with "in our opinion," you have a very good, logical, and factual point. Plus, all the open lines of credit, assuming it's not a ridiculous amount, also improves a credit score by showing a low amount of credit used per credit available. So, another reason to keep CCs open. Personally, I keep the account open, but just cut up the card and keep two cards (one primary, one for emergency) around as actual-use CCs. Seems to work well...so far.
]]>@sburnap42: Your experience =/= everyone's experience. I personally know a number of people who were financially secure who were absolutely devastated by a job loss or unplanned medical emergency, whether their own or a family member's. Even with insurance or savings, you can only go so long before your reserves start running out; these are people who literally had cut all the fat out of their budgets until they were down to the bone and STILL couldn't make ends meet.
Are there irresponsible people who use credit unwisely? Of course. It's something that can be abused, just like anything in this world. But sitting on your high horse looking down at everyone with financial trouble and saying something to the effect of "y'all are a bunch of greedy, lazy fools" when there are a number of reasons for it is overgeneralizing and irresponsible.
So yes, try again, sport. We see this all the time around here.
]]>On the other hand, while I understand that some people suddenly get over their head in debt (e.g. unanticipated job loss, major medical bills) I think that most people bring on their own grief with it. If you don't have money set aside for emergencies then you need to do so before buying/charging any items that you don't absolutely need. If you're carrying a balance then you shouldn't be charging unnecessary items until you've paid it off.
]]>I get cash rewards too (almost $200 this year) and never carry a balance or pay interest or fees.
But I have been wondering if the world would be a better place without credit cards. Aren't debit cards just as good, and would they stop people from spending money they don't have?
]]>Now if only we could carve that concealed weapons in national parks provision out of the Act, I'd be happy.
]]>Anyways, the reason why they tell you to not close cards is because it can seriously impact the average age of your accounts. If you had two cards that were open for 20 years and two cards that were open for a month and you decided to close your two oldest lines, your average account age just went from 10 to (effectively) zero. A ~800 score would plummet to the 600-700's, no doubt.
]]>Obviously "losing a job" is an emergency...but most people I know who are running large balances do so because they wanted luxuries, or got themselves into a house they couldn't afford and had to use their credit card to make ends meet.
If you aren't paying off your balance every month, you should tell yourself "this purchase will cost 50% more than the receipt says" for every credit card purchase.
]]>In our opinion, it's a BS rumor and shouldn't stop people from voting against bad CC companies by terminating the relationships. As pointed out in this story, the CC companies will be back in the next year pushing new cards with attractive teasers and benefits.
]]>I'm a bit puzzled by the feature that "allows customers to choose categories of spending to pay off every month." How is it different from simply paying off some of your balance and carrying some of it forward?
For example, if you buy a $2000 TV and $1000 in misc. stuff, the Chase feature seems to present a way to pay off everything except the one "category" of electronics (the TV). How is this different from just sending in $1000 and carrying debt on $2000 per usual? What do you care which "category" they consider paid off and which they don't?
Is this just so you can tell yourself that you have "paid off" all of your groceries and drugstore stuff and are only "paying interest" on the big TV you splurged for? Or am I missing something that actually adds value somehow?
]]>@unpolloloco: Are you kidding? Click on the credit card tag at the bottom and you'll see.
1) Lowering your balance without cause(which impacts credit scores). [consumerist.com]
2) Increasing APR without allowing Opt out. [consumerist.com]
3) Cancelling cards without notice. [consumerist.com]
4) Moving up payment due date without notice. [consumerist.com]
Etc.
]]>@SabyneWired: In general, people rely on revolving credit because they're greedy and want things before they can afford them. Plus, reports of sweeping unemployment are blown way out of proportion. The current unemployment rate is only a few percentage points higher then the average over the last 20 years. The vast, vast, vast majority of people out there are not losing their jobs. If you want to talk "overgeneralizations," then start with yours.
]]>@sburnap42: Ha, no. Way to overgeneralize there, sport. Especially now, when so many people are losing their jobs. Try again when you have an understanding of why people really come to rely on credit.
]]>Yes, credit card companies shouldn't be allowed to screw anyone by changing rates, limits, or any other of the unethical bullshit they pull, but most people end up at their mercy because they didn't want to put off buying something they couldn't afford.
You should only ever run a balance on a credit card if you have an unexpected emergency.
]]>I'm happy for you that you are able to pay every bill in full every month, but that doesn't negate for a minute that credit card companies are notoriously squirrelly to pretty much everyone else but apparently you. These changes are great. They need to go farther.
]]>I do get generous cash back without paying any fees though. So that is nice.
]]>They can all DIAF.
]]>This is like someone dumping a ton of crap on your front lawn and then saying, "hey, you'll like it, its good fertilizer!"
]]>Question is though, why do they even bother? Why not go on and milk the debit card users for all its worth?
]]>Even though I'm a pay in full customer, I like knowing its there. I love my credit card. They've given me back $750 in cash back over the last 12 months, while I havent paid them a penny. And they disputed some shady mechanic's repair work for me and helped me get my money back.
Screw you , cash!
]]>I do think that these reforms have to happen, the biggest one is, if you borrow at a certain rate than it should stay at that rate, even if they raise your APR later, that is only fair. As far as the fees go, yeah they are terrible, but easily avoided if you pay attention.
]]>Why is Chase Blueprint only available on 3 or 4 Chase cards?
_
I GUESS it's a START.
]]>