Ten Important Credit Card Changes that should be included in any Credit Card Reform Bill, yet probably won’t be.

Credit Card Change Number – 1

A consumer MUST BE ALLOWED THE RIGHT to OPT OUT of a pre-existing financial agreement WHEN THE TERMS ARE CHANGED BY THE BANK OR CREDIT CARD COMPANY.

This single, simple rule, supercedes all others. If the consumer’s right to OPT OUT is not included in a credit card reform bill, the credit card reform bill is just for show only. Burying a change in terms in the fine print is unacceptable. The change in terms MUST also be seen on the bill for two billing cycles before becoming unchangeable.

Credit Card Change Number – 2. DO NOT GIVE OUT NEW CREDIT CARDS TO FIRST TIME USERS UNLESS THE MONTHLY MINIMUM PAYMENT IS BETWEEN 8% TO 10% OF THE AMOUNT that is owed. Simply put, the lure of the very low monthly minimum payment requirement is what causes most borrowers to borrow beyond their means. The commonly held belief that one must borrow to increase one’s credit line creates the ingredients for a lifetime of debt.

Credit Card Change Number – 3. Cap the highest interest rates at 19.99%, no matter what. The 19.99% rate should be a “punishment” rate for those that just don’t care and have no desire to pay off or pay down their debt. If someone calls and begs for a lower interest rate and proves their sincerity by making payments on time for three months and beyond, LOWER THEIR RATE a few points from 19.99%.

Credit Card Change Number – 4 DO NOT LOWER A PERSON’S CREDIT SCORE because they close a card. It is silly, and even a form of fraud, to downgrade a consumer’s credit rating for closing a credit card that they have evaluated as not being a good deal.

Some people will claim that others with debt acquired the indebtedness via poor spending habits, yet credit card companies punish these same borrowers when they exercise good judgement by closing a card that is not a good deal. The closing of a credit card account that results in a lowered credit rating is just crazy.

Credit Card Change Number – 5. If Congress really wants to make an immediate impact, and instantly help the economy, freeze interest rates at zero percent on all credit-card debt that is older than three years as long as the customer agrees to keep paying down the old debt at a faster rate.

Credit Card Change Number – 6. All new credit card debt should have a monthly minimum payment of at least 6-8 percent of the total due every month. This would minimize the impact of the interest rate as most of the payment would be allocated towards the principle every month while also giving a more realistic representation of just how much debt one can “afford” to maintain.

Credit Card Change Number – 7. Don’t allow credit card companies to cause a customer to lose their frequent flyer miles by closing their credit card.

It appears that American Express recently closed a LOT of frequent flyer customers’ credit cards, rendering their frequent flyer miles worthless. Apparently, American Airlines began “reallocating” those lost frequent flyer miles to Citibank for a better interest rate on an up and coming loan. Wow. This is not only unethical, this sequence of events, if true, probably broke several laws.

Credit Card Change Number – 8. Do not pull away a customer’s credit line landing pad by lowering a customer’s credit line to their present day balance due all at once.

It is patently unfair to cut somebody off of further credit who has been paying their bill on time every month. A more reasonable approach is to limit the total amount of new expenditures that credit card holder can make each month and then cap that total at 10% or a thousand dollars above where it currently stands. This gives the consumer a “landing pad” to try and figure out how to proceed with their debts and their future payments on those debts.

Credit Card Change Number – 9. Use “incentive based” credit card products to ANY customer who is able to lower their credit card balance due each and every month. Give favorable interest rate terms to any customer who is able to lower the total amount they owe month after month.

Credit Card Change Number – 10, Require customer service to fully disclose to the customer if they DO NOT have the authority to lower or change a penalty, fee, or interest rate increase.

Fully disclosing that the customer service rep has no authority to actually help you is something the credit card companies should be required to do at the beginning of a phone call.

Do those Ten things for Credit Card Reform, and most of what ails us about the credit card companies will subside.

Alessandro Machi has started his own Chase Bank Credit Card Industry Protest Blog at http://www.Daily-Protest.com