New Credit Card Act - And New Ways Around It

Guest post: Dave Johnson, Seeing the Forrest

This week as the new credit card act takes effect to much fanfare, Jon Stewart and The Daily Show nail it again. Watch:

Almost two years after the financial meltdown, the new rules are a step forward. Thanks to the new law,

• Issuers must tell you 45 days before making a major change to the terms of a credit card contract.
• Issuers must apply all payments above the monthly minimum to your balance carrying the highest interest rate.
• Issuers must give 21 days between the time they mail your bill and when they will impose a late fee.

BUT credit card companies can still,

• Impose many other, often hard-to-understand charges, such as fees on purchases abroad or for having a zero balance.
• Close accounts or reduce your line of credit without notice for any reason, although they must wait 45 days before they can impose an over-the-limit fee or a penalty rate on your newly lowered credit limit.
• Arbitrarily change any or all terms for credit cards issued to your small business.

So what needs to be done? RJ Eskow writes in Shaft! As New Rules Begin, Credit Card Companies Find New Ways to Bilk Customers,

Before we get to the specifics, here's what you need to know about the credit card companies: They're out to shaft you. They'll shaft you every chance they get.

... Case in point: The White House is announcing the implementation of new consumer protections for cardholders, and guess what? The companies are already finding ways around them.

[. . .] The moral of the story? We don't just need consumer protection legislation. We also need a consumer protection agency - one with enough resources to stay on top of the credit card companies and ensure that they do the right thing, and with enough teeth to punish them if they don't. (emphasis added)

Yes, we need the new Consumer Financial Protection Agency, first proposed by Elizabeth Warren in 2007! Hey, that was three years ago. Where is Congress?