FED rules that do not take effect for eighteen months. No help for consumers here.

Credit Card Changes

Let’s see, the credit card industry is going to hurt you.  It’s going to lash out at even its good customers.  Thanks to the FED for passing some rules that do not take effect for eighteen months.  No help for consumers here.  The industry is going to cause another train wreck in the next eighteen months, ruining the perfectly good credit of millions of decent consumers (who are at the same time are paying to bail out these banks).  “Eighteen months is a very long time to wait,” is an understatement.

I must respectfully disagree with John Ulzheimer, President of Credit.com Educational Services.  I know he meant well and was advising viewers as individuals (and I think that he would see my point from the perspective that I am about to present below).  Meanwhile, when he discussed a “common thread” with respect to all of the changes that the credit card companies are making, I don’t think that the analysis went deep enough: “If you don’t carry credit card debt, month over month over month, then a lot of these changes really don’t affect you because you’re not being penalized.”

The problem with this level of analysis is that it’s like saying the foreclosure across the street won’t have any impact on you.  It does.  Your home value is lower when your neighbors foreclose.  Your credit will be restricted, harder to come by, and more expensive.

In my own situation, Chase Card Services is purposely putting my family in financial distress with a giant monthly payment increase (almost triple); its goal is to make me and thousands of others forfeit a rate we were promised in order to maintain a monthly payment that is livable.  Since we are simultaneously trying to sell a home, and that is taking a long time in this market, Christmas is for all intents and purposes dead this year, other than the kids who will receive whatever my wife squirreled away from bargain sales throughout the year (she really is amazing; her finds are typically 90% off, and she still “won’t bite” until there’s a red tag clearance sale on those prices).  But as far as the grownups are concerned, if my wife gets anything from me, it will be made with construction paper and glue at the same time the kids make their arts and crafts items.  There will be no retail store purchases this year for the grownups (and even in past years when things have been hard, we have always done at least a little something for one another, as husband and wife).

Retail sales will be down due to cutbacks on the part of all families, so it has been predicted by forecasters.  The economy will continue to languish.  Our home and other homes will continue to be difficult to sell.  The cycle will continue.  Suze Orman will keep telling people they can (i.e., should adopt the mentality) “steal” a home (and we’ll keep telling buyers that we are as low as we can go; at the price we are asking, after paying the realtor and fees, we will not be making any money — indeed, we will lose the down payment, and thousands more that were already spent on improvements; no down payment on a new home will come of this, so we’ll become renters I suppose, as one family “steals” a home from another).

No, I am afraid that my “pain” due to credit card companies and their abuse is “our” pain, and vice versa.  Please, let’s all help one another.  Write your Congressional Representatives now, and tell them that when consumers and small businesses (I am assuming that you will watch the video, and notice the bootstrapper who financed his small business on credit cards) are being bullied and literally forced into a position where they cannot pay, that will drive up the very default rate which the credit card industry claims that it wishes to protect itself against.  Quit breaking the legs of American consumers, and this country can return to normal.  Of course, this is apparently too simple for the FED and our lawmakers to recognize, to date (the credit card companies don’t get it either; but, they have acted like imbeciles for a very long time).