Why Credit Cards always win
1547 cr points
Send Message: Send PM GB Post
M
Offline
Posted 6/25/09 , edited 6/25/09
Just last month, the CCARDA (Credit Card Accountability, Responsibility, and Disclosure Act) was passed on account of “credit card fairness”. That, and the newly created FPA (Financial Protection Agency) is worrying investor-owned-banks while simultaneously making customer-owned-unions rejoice.

Apparently, the new fairness laws being passed are not doing much to the credit unions. As a credit union member Ryan Bubb reports, “The credit unions ultimately do not need to abide by the ‘fairness’ rules of the CCARDA because most of them already conform to these new rules already. And they can still keep the profitable features that users know and love.”
But, you say, these changes look like a boom for the average card user. Why should anyone be worried about fairer cards? Industry advocates claim that fees on delinquent borrowers subsidize the perks for those who pay on time. Take away the lucrative fees (as the argument goes) and credit card issuers will be forced to abolish free plane rides and generous credit limits. Some in the industry even say that the plans will probably also force them to charge interest from the moment of purchase, thus eliminating the grace-period of interest-free lending that many users enjoy.

The sky may be looking bleak for the credit card issuers and users, but the fears may just be unfounded. As mentioned above, most of the credit unions already follow the guidelines that the CCARDA and FPA are enforcing. A recent survey found that credit unions are less likely to charge the fees and penalties that the CCARDA plans to eliminate. The new guidelines hardly affect them at all, they can continue to go on with their usual plans without fear of conformation. Credit union cards also offer annual fees, longer grace periods, proportional taxing, and exemptions from corporate taxes that most investor banks have yet to consider.

But on the other hand, no matter how you look at it, there will have to be sacrifices. Rewards programs for both unions and banks will become less generous as well as less common. But is this necessarily a bad thing? For some, yes. But while you may be reluctant to sacrifice your free airline miles, rewards programs may actually be debt-laden taking an even larger toll on your paycheck.

So as demonstrated, punishing fees are not an essential part of profitable lending. The credit card acts will most-likely not bring disaster for credit cards, but nudge them forward to the credit union model that many Americans use.

Thank you for reading, I hope you post something nice and helpful.
13136 cr points
Send Message: Send PM GB Post
M / Europe
Offline
Posted 6/25/09
I think this is kinda pointless. I mean, you can talk all you want about credit cards but

Your credit

http://www.crunchyroll.com/showforumtopic?id=15431
25823 cr points
Send Message: Send PM GB Post
26 / M
Offline
Posted 6/25/09
credit cards fail

debit ftw
Posted 6/25/09

moratorium wrote:

credit cards fail

debit ftw


Agree
Posted 6/25/09
phfff..credit cards....a card of temptation....
Posted 6/25/09
I'm sorry, i couldn't read all that. o.o
too long...
but um, i don't use credit cards, so i wouldn't know.
34454 cr points
Send Message: Send PM GB Post
Canada
Offline
Posted 6/25/09
lol i just finished watching confession of a shopaholic
Posted 6/25/09
Lack of discussion

~locked
You must be logged in to post.