Given our focus on Stewardship for the next month, I found this Bible Study to be a perfect addition. It’s rather long. I suggest you print it out and meditate over it for a while!
New Law Aims to Protect Credit Card Users
The Wired Word for March 14, 2010
In the News
On February 22, nine months after it was enacted by Congress with high bipartisan support, the "Credit Card Accountability, Responsibility and Disclosure Act of 2009" (CARD) took effect. This comprehensive credit card reform legislation is intended, in the words of the act, "to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes." In short, it aims to curb unscrupulous practices by the credit card industry and to offer new protections to consumers.
Treasury Secretary Timothy Geithner described the CARD act, which was signed into law last spring by President Obama, as "a critical step forward" in protecting the financial well-being of American families.
The new law includes several rules to limit how credit card companies can charge customers but does not have price controls, rate caps or fee-setting limitations. It does ban rate hikes on existing balances, calls for hard spending caps instead of over-limit fees and mandates that payments go toward high-rate balances first, thus minimizing interest charges for card users. For a quick summary of the CARD provisions, see New credit card laws 2010.
The CARD law became necessary because of some unethical banking practices. For example, in some cases, when a person’s overall credit rating went down, banks sometimes raised the interest rates they charged that customer even though the person was current and on time with payments to that card issuer. Some companies also wrote their user rules in such a way that a single late payment threw the card holder into a much higher rate bracket. Other predatory practices were sometimes embedded in legalese in the contracts the card holders were required to sign to receive the card.
Although the new rules are expected to benefit card users, some of that benefit has been offset by banks that raised their interest rates and fees in the weeks before the law went into effect. While the bill was under consideration, credit card companies argued that the regulatory changes would lead to higher rates. Consumer advocacy groups point out that those same credit card companies have fulfilled their own prophecy, using their claims as cover to raise rates and find new ways to exploit their customers.
