How You Know The CARD Act Was Necessary


By now, everyone should have received notifications from their credit card companies explaining how their rules were changing to comply with the CARD act, which becomes effective on Monday, February 22d.    Some of those notifications went out of their way to spin the new protections as being wonderful new features, that your credit card company is proud to offer.

Don’t Buy It

Let’s face it, the banks lobbied HARD against the CARD act, and only failed to defeat it because of their unprecidented political weakness in the immediate aftermath of the global financial crisis.   Furthermore, if they really were proud to offer you these protections, they would have done so some time before they were legally required to.    The C0nsumerist has posted a chart, via BillShrink on which banks have enacted which protections ahead of their legal requirement.    While some banks have enacted some of the provisions already, none have complied with the fair allocatoin of payments, the education on the dangers of minimum payments, or the protection of younger cardholders.    For example, as of January 14th, American Express is still employing due date gimmicks up to the time they are legally required to give them up.

Keep This In Mind As More Financial Regulations Are Debated

The credit card industry is one of the most competitive markets out there, yet the banks clearly move in lock step with each other.    Changes that benefit consumers are only made after being legally required to.    Anyone who argues that the market will sort it out, or that further regulation will ultimately harm consumers is really only speaking for the banks.

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One Response to “How You Know The CARD Act Was Necessary”

  1. Keith Morris Says:

    I can’t help but wonder what would happen if one of these banks, in a very public way, ate the costs of these new regulations and turned a new leaf. Would they make up for the costs in increased membership? I guess if that were the case, one of them would have figured it out by now.

    Anyway, that Consumerist link is great. Thanks for sharing it. We also recorded a podcast in which we discussed some of these credit card changes:

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