Bible Money Matters

Christian personal finance

Menu
    • About
    • Archives
    • Contact
    • Close
  • Making Money
      • Popular Articles

        • 50 Ways To Make Money: Maximizing, Creating And Increasing Your Income
        • 10 Weird And Unconventional Ways To Make Money
        • Making Money With A Blog (e-Book)
        • 10 Places To Sell Or Trade Your Unused (Or Broken) Electronics
        • Ways To Make Extra Money Series: 20 More Income Generating Ideas From Our Readers
        • Making Side Income Can Help Blunt The Impact Of Becoming A One Income Family
        • Earn Cash Back With Discover it® Credit Card
      • Recent Articles – Making Money

        • Best Sites Like Fiverr To Make Money As A Freelancer
        • 13 Of The Best Independent Contractor Jobs
        • 25 Of The Best Gig Economy Jobs
        • How To Make Money Blogging: Turn A Blog Into A Business
      • Categories

        • Making Money
        • Investing
        • Retirement
        • Jobs & Work LIfe
        • Money
        • Income
    • Close
  • Saving Money
      • Popular Articles

        • 50 Easy Ways To Save Money Every Month
        • 10 Weird And Unconventional Ways To Save Money
        • 10 Practical Ways To Save Money And Increase Your Net Worth
        • How To Save Money On Just About All Of Your Regular Monthly Bills
        • Ways To Watch TV Without Paying An Arm And A Leg For Cable TV
        • Save Money On Your Hospital Bill - Just By Asking
      • Recent Articles – Saving Money

        • How To Save $100k In 7 Practical Steps
        • Stairs App Review: Save And Invest To Earn 4-6% Interest
        • Honey Review: Save Money Automatically When You Shop Online
        • 9 Convincing Reasons Why You Need An Emergency Fund
      • Categories

        • Saving Money
        • Frugality
        • Planning
        • Finance
        • Saving For Retirement
        • Savings Accounts
    • Close
  • Banking
      • Best Rates For 2019

        • Best Credit Cards
        • Best Savings Accounts
        • Best Mortgage Rates
        • Best CD Rates
        • Best Brokerages
        • Free Credit Scores
      • Recent Reviews

        • TradeStation Review: Commission Free Stock And ETF Trades
        • Firstrade Review: Commission Free Trades on Stocks, Crypto, And Options
        • Cadre Real Estate Investing Review: Commercial Real Estate Investing
        • Axos Self Directed Trading Review: Invest, Trade Stocks For Free
      • Categories

        • Bank & Software Reviews
        • Investing
        • Credit
        • Banking
        • Mortgage
        • Insurance
        • Family Budget
    • Close
  • Recommended
  • Video
    • Close

New Legislation Will Bring Changes To The Credit Card Industry

By Peter Anderson 1 Comment - The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited August 28, 2017.

Share
Pin
Tweet
Share
0 Shares

If you’ve been reading this blog for any period of time, you probably know that I’m not a huge fan of credit cards.  As a Dave Ramsey fan and facilitator for his Financial Peace University class, you’d probably understand why.  In general I think that using debt and credit are just poor ways to get ahead.

I’ve also talked about how Credit Card companies often do things that are unethical, and how they won’t look out for your best interests.  Sometimes they’ll even do things that are downright illegal!  Needless to say, in many respects the credit card industry is in need of some increased regulation.  It looks like that may be happening.

Quick Navigation

  • Credit Card Accountability, Responsibility and Disclosure Act (CARD) of 2009
  • A Good Idea Or Not? Could There Be Unintended Consequences?
  • Conclusion
  • What Others Are Saying

Credit Card Accountability, Responsibility and Disclosure Act (CARD) of 2009

On May 22nd, 2009 Barack Obama signed new legislation into law called the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act).  The bill looks to put some limits on what the credit card companies can do in regards to charging fees, upping interest rates,and in theory forces them to be more transparent with customers.  Many believe it will significantly change the face of the credit card industry.   Some of the major provisions include:

  • Requires credit card companies to give cardholders 45 days advance notice of an increase in interest rates.
  • Prohibits credit card companies from increasing interest rates retroactively on existing balances unless the cardholder is more than 60 days late in making a payment. If the cardholder pays on time for the following six months, the company will have to restore the original rate.
  • Prohibits credit card companies from marketing and issuing cards to borrowers under the age of 21.
  • Requires balances with higher interest rates to be paid first, instead of lower interest first as many companies do now.
  • Permits consumers to set credit limits lower than the limit offered by the credit card company.
  • Requires that statements be mailed out at least 21 days before payment is due.

Most of the provisions in the bill will not take effect for another 9 months (February 2010), others slightly longer.

The full language of the bill is available to view here: CARD Act

A Good Idea Or Not? Could There Be Unintended Consequences?

Not everyone is hot on the idea of this credit card legislation saying that it could hurt the industry, and have the unintended consequence of hurting those it is trying to help.  From the Washington Times:

“When you start restricting the price banks can charge to customers, they are going to start cutting back their lending,” said Erik Benrud, finance professor at Drexel University in Philadelphia.

“If the banks know they can’t raise rates on existing balances, that too will restrict their desire to make loans to certain groups,” he said.

In essence he’s saying that the people who might be helped by the provisions in the bill would actually be harmed because they wouldn’t be able to get credit in the first place, or as another person mentioned, the cost of higher risk borrowers would be transferred to responsible borrowers through higher interest rates and fees for everyone.  It could also mean fewer rewards programs.

Consumer advocates disagree that the bill will hurt as some industry experts have mentioned.

“You mean, if they can’t rip us off they are going to give us less credit?” said Gail Hillebrand, financial services campaign manager at Consumers Union. “We’ve been hearing that argument for a long time.

“I don’t think they’re going to give us less credit, but if they can’t rip us off, that’s a good thing,” she said.

Others went on to say that the argument that all borrowers will pay higher interest rates is a moot point – as many responsible borrowers are already seeing rate increases or added fees for no reason other than the companies are trying to make up for losses in other areas.

Personally I can see the law having some unintended consequences, and I fully expect that the credit card companies could in fact restrict access to credit, raise interest rates for all borrowers and cut rewards programs significantly.  We shall see if that actually  happens.

Conclusion

The credit card legislation really isn’t a big issue for me as i don’t use credit very often, and when I do it gets paid off right away (with cash I already have saved).  For borrowers that are responsible and pay off balances quickly, the provisions in this bill will probably have limited effect.

For those that carry a balance from month to month this bill will most likely give some added stability and transparency to their credit card relationships, and keep the companies from completely taking advantage of them.

Personally the only reservations I have about this legislation is that once again it means the government is getting way too involved in another industry, and they’re on their way to controlling pretty much every aspect of our financial lives.  I’d much prefer the free markets take their course, and that the government instead stress personal financial responsibility for average Americans, and help to make credit card use a thing of the past! (yeah right)

What do you think of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD)?  do you think it’s a good idea?  Do you think it will have unintended consequences? Let us know what you think in the comments!

What Others Are Saying

  • Credit Card Reform Disputed
  • Credit Card Legislation – Winners and Losers
  • Credit Card Act Of 2009
  • New Credit Card Legislation
  • Problems With Credit Card Reform
  • Credit Cardholders’ Bill of Rights Act of 2009

Related Posts

  • New Credit Card Rules Take Effect: CARD Act Of 2009

    Credit Card Accountability, Responsibility and Disclosure Act (CARD) of 2009 On May 22nd, 2009 Barack Obama signed new legislation into law called the Credit Card…

  • Avoiding The Trap Of Credit Card Introductory Offers

    Credit cards introductory offers are often appealing, but just remember they are appealing for a marketing reason. Use them wisely.

  • Still Think Credit Card Companies Aren't Evil? Read This.

    News flash - credit card companies are not looking out for your best interests A common theme that I have on this blog is that…

Share
Pin
Tweet
Share
0 Shares
Last Edited: 28th August 2017 The content of biblemoneymatters.com is for general information purposes only and does not constitute professional advice. Visitors to biblemoneymatters.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.

This article is about: Credit, Economy, Get Out of Debt

About Peter Anderson

Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his 2 children. He loves reading and writing about personal finance, and also enjoys a good board game every now and again. You can find out more about him on the about page. Don't forget to say hi on Pinterest, Twitter or Facebook!

Comments

    Share Your Thoughts: Cancel reply

  1. Jason says

    I think that government should protect private property (e.g. my money) without interfering with private business. Going by the bulleted list of what’s in the law, I think some of the items are _arguably_ protection of private propety in that they prevent border-line lying, cheating, and stealing on the part of the credit card company by, e.g., billing 2 days before a bill is due.

    Still, it is a little invasive, imo.

    Reply
Previous Post: Netbook Computers: The Frugal Laptop Alternative That Won’t Break The Bank
Next Post: Devotional: But I Already Prayed
Discover Investment Platforms

Popular Posts

  • 21 Easy Ways To Earn Free Amazon Gift Cards
  • 10 Best Free Tax Filing Services And Software Online
  • 21 Apps That Pay You Real Money Fast
  • 17 TV Apps And Live TV Streaming Services To Watch TV Free
  • 30 Legit Online Jobs That Pay Well
  • 37 Easy Ways To Get Free Gift Cards
  • How To Get Free Stock
  • 40 Easy Ways To Get Free Money Fast
  • 21 Places To Read Free Books Online
  • 24 Legit Online Jobs
  • 17 Best Work From Home Jobs: A List Of Legit Online Jobs That Pay Well

Recent Posts

  • How To Save $100k In 7 Practical Steps
  • How to Save Money When Remodeling A Home
  • How To Hire A Contractor For Your Remodeling Project
  • Remembering 9/11 Years Later: Where Were You On That Fateful Day?
  • TradeStation Review: Commission Free Stock And ETF Trades
  • Firstrade Review: Commission Free Trades on Stocks, Crypto, And Options
  • Cadre Real Estate Investing Review: Commercial Real Estate Investing
  • Best Sites Like Fiverr To Make Money As A Freelancer
  • Axos Self Directed Trading Review: Invest, Trade Stocks For Free
  • 30 Quotes About Easter And Resurrection: He Is Risen!

Disclaimer

The information contained in BibleMoneyMatters.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation.

In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving access to free products and services for product and service reviews and giveaways.

Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.

Amazon and the Amazon logo are trademarks of Amazon.com, Inc. or its affiliates.

We respect your privacy: Privacy Policy.

Thanks for visiting!

Bible Money Matters - Seen On These Sites and more..
Bible Money Matters is a personal finance, entrepreneurship and investing community. Give more, save more and live more.

Copyright © 2023 · Bible Money Matters | Sitemap | Advertise | Privacy Policy