Word: cards
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Dates: during 2000-2009
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...Tellingly, the proposed law doesn't try to tweak those figures. If you go from being a good credit risk to a bad one, credit-card companies can still take steps to make sure they continue to be adequately compensated. When you go to buy new things, they can charge you 30% a year if they want to. The thing they wouldn't be allowed to do under the new law is to go back and change the terms of your original agreement - that is, hike your interest rate on existing balances - except in very few situations, such as your...
...approach therefore is not to smack down credit-card companies for high interest rates but rather to hold everyone to the original agreement about how much credit will cost. "Virtually no other contract in this country allows a business to change the terms of an agreement once a purchase has been made," says Travis Plunkett of the Consumer Federation of America. "That's the main issue." (One Senator suggested an interest-rate cap, but that was shot down...
...Other provisions of the law are similarly set up. A card company can still change the terms of your contract. It will just have to give you 45 days' notice. It's still possible for an issuer to assess a fee when you go over your credit limit - but only if you indicate that you want to be able to go over your credit limit in the first place, instead of having your card denied at the point of purchase. Companies can still set minimum required payments however they see fit. But they'll be required to tell...
...changes would be more heavy-handed. Those phone-payment fees would be prohibited outright (unless a customer asks for expedited service, a genuine additional cost which the card company would be allowed to pass along). It could also be substantially harder to market or sell credit cards to young people (those under either...
...most part, the bill before Congress isn't about changing the game on card companies. It's about creating a fairer set of rules to play...