Obama’s CARD law was intended to protect consumers from predatory credit card company practices. Credit card companies have argued against the new rules saying these restrictions would actually reduce the number of products available to consumers. Many Americans ask again, “How will this affect me?”
With the new constraints that will play behind the already impacting economic crisis, credit card times are just changing.
How the new credit card industry rules affect you will depend on the credit cards you depend on. There is an impact on most types of personal credit and debit cards. Commercial credit cards are not handled under CARD.
It appears at every turn as new credit card regulations lower fees, and the credit card industry and banks will offset this money elsewhere. This does not mean that there is no help from the bill although at least with most of the expected fees consumers will know for example that they are paying annual fees instead of being surprised by exorbitant late fees because their payments were delivered by 10:00 on the day they were due. It is unclear whether there will be more savings or not, but it appears that there should be fewer surprises to measure fees.
Expect major changes
Student credit cards: CARD prohibits on-campus marketing campaigns such as free pizza and requires applicants under the age of 21 to either provide proof of income or require a parent to co-sign.
The analyst predicts that there will be fewer offers for the student card. They also expect interest rates to rise and credit limits to fall, but they say the credit industry will likely offer some symbolic rewards for student lure. Teenagers and teens are more likely to go for prepaid cards.
High Fee Cards: High Fee Credit Cards, sometimes called “Fee Harvest” cards, are those that charge high prepaid fees with low credit limits. These high-fee cards are not expected to escape from the CARD.
Analysts expect that especially for those with bad credit, while fees may decrease, interest rates will rise. First Premier has already replaced one of its high-fee credit cards with a high interest rate card.
Debit Cards: Debit cards have never provided high returns to banks except for the huge overdraft fees. The new rules make these high fees no. This could mean that banks will not automatically cover overdraft without prior arrangements and some experts expect banks to try to offset losses with an annual fee on debit cards.
Balance transfers: Although balance transfer offers may still be available, experts predict that days of catalytic deals like zero percent for 12 months may be past. Lower rates are likely to rise from zero to two percent to seven to nine percent.
Jerry Strassel says: “The stimulus wholesale rates will not decrease, but they will most likely not be as profitable for the consumer as they were – they would see a higher rate and a shorter introductory period.” JLS Associates.
To date, Citi Bank remains in the business of teasers, offering 0 percent for 15 months to eligible clients.
Debit Cards: Will the annual fees replace the overdraft fee?
Overdraft fees were the core of profit on debit cards, but the crackdown in new credit card rules for overdraft fees will mean that some banks will not automatically cover overdraft unless you choose cutters early. Some credit industry experts expect that banks may start imposing annual fees on debit cards from $ 20.00 to $ 30.00.
Prepaid gift cards:
Companies have taken advantage of billions of expired gift cards and low-balance gift cards. As of August 22, 2010, all gift cards must be redeemable for a period of five years. The analyst asks whether stores will start charging fees for purchasing gift cards and whether or not the market will incur them.
Other change experts expect to follow the card rule:
- Rewards are likely to be less “rewarded” and harder to earn.
- Gas card discounts may drop to one or two pence of savings per gallon.
- Low interest credit cards are likely to have the highest low.
- It will be difficult to qualify for low interest cards.
- Companies are likely to offer more creative tricks to distract from the top
