Credit Cards »

Washington Post recently ran some required reading for all credit card users entitled “Five myths about America’s credit card debt.” Don’t be deceived by the somewhat banal title – this piece is actually very illuminating and broaches some topics not usually discussed in the day-to-day blogosphere.

The last myth is perhaps the most interesting and topical. Here it is:

“The CARD Act finally protects consumers against the credit card industry’s most abusive practices.”

The answer to this is a surprising “yes and no.” According to the Post, there is some overdue reigning in of some of the most egregious credit card practices, but some restrictions and protections are left out and some measures were simply too little too late.

This next paragraph is old news to anyone who’s been taken for a ride by the credit card companies in the past few months, but its still satisfying to see the mainstream media confirm it again:

On the negative side, Congress stipulated a nine-month phase-in period for these regulations. For millions of Americans, especially those suffering from employment and income interruptions, this is too late. If you’re in debt today, this bill doesn’t help you. Companies already have jacked up interest rates, sharply reduced lines of credit, increased service fees and diluted the value of loyalty reward programs. These trends have brought consumer credit scores down, triggering higher borrowing costs and greater difficulty finding work.

So, we’ve taken two steps forward when we really need a giant leap in credit reform. The “silver lining” of this relatively disappointing bill, according to Washington Post, is that more consumers are completely disillusioned with credit cards and are “leaving home without it.” But there are still some of us who haven’t quite weaned ourselves off of revolving credit and for us, there is still a considerable gap between federal regulation and lender practices that personal responsibility can’t quite fill. And to believe that the credit card industry will ever stop dreaming up new tricks and traps to maneuver around the new credit card legislation is just plain naive.

American consumers should start demanding a sequel to the Credit CARD Act now. In fact, a trilogy is probably in order (third time’s a charm, right?). The CARD Act was a small victory, but the industry and the lawmakers need to know that we as consumers still aren’t satisfied. We are still plagued by predatory lending practices, violated by debt collectors who call everyday and harass our family members and neighbors, subject to the whimsy of credit card interest rates and fees and treated like second class citizens in favor of profits and corporations.

I read the comments and the blogs everyday and I see a lot of people who are still angry and with good reason. But in order to affect lasting change – and get it right this time – we need to focus our efforts and rage in a way that the powers that be (that’s government and the lenders themselves) hear us. So, if you have been wronged, make sure you formally lodge your complaint through one of the following channels: Read the full story »