Archive for February, 2010

The long-awaited consumer credit protection laws known as the CARD Act go into effect today. While it’s no Fourth of July, today should be remembered as the day when more Americans became liberated from onerous credit card rate hikes and other sleazy bank practices.

Some of the major changes you’ll notice include:

1. Easy to read statements that clearly show finance charges and how long it will take to pay off the balance when only the minimum payment is made
2. Credit card companies can’t generally increase your interest rate in the first year that you have a card
3. No over-the-limit fees unless you opt-in to allow those transactions in advance
4. Some interest rate hikes will apply only to new charges, not existing balances and
5. Students and other people under the age of 21 who had been a cash cow for credit card companies will now need either a co-signer or evidence that they have enough income to make monthly payments

But just like the Declaration of Independence and Revolutionary War failed to provide a full measure of freedom to southern slaves and Native Americans, there are more than a few loopholes that still allow card companies to take advantage of their customers.

These include rate hikes for variable rate cards and those with promotional rates, major interest rate increases if two payments are missed (i.e. you are 60 days late) and hefty penalty fees. You’ll also start to see more inactivity fees charged for customers who don’t use a card and don’t carry a balance.

But this is a start.

The new regulations look to save consumers biliions in interest charges and fees, and you can bet the bank that credit card companies will use every opportunity and dirty trick to recapture that lost revenue.

So you’ll still need to stay vigilant and recognize that no matter how favorable the new laws are to you as a credit consumer, the best bet is to get out of credit card debt.

If you have any chance at all of getting out of debt you need to realize that paying just the minimum balance on your credit cards is a recipe for eternal debt servitude.

Don’t believe me (debt guru that I am?) then maybe you’ll trust the folks at the humor site Cracked.com, who have put together the following graphic that shows just how long it takes to pay off credit cards at a 2% rate.

Credit Cards on Cracked.com

Terrible things happen when common people feel pushed to the limit and unable to win in a game where the deck is stacked against them. This appears to be the case in the recent events that took place in Austin Texas where a man deliberately crashed a small aircraft into offices used by the Internal Revenue Service.  As it turns out, violence directed against the I.R.S. is all too common.

The same feelings of helplessness and anger boil over when people are put out of their homes as a result of foreclosure.

In the latest incident, an Ohio man took a bulldozer to his home instead of letting the bank get it in foreclosure proceedings. Terry Hoskins owed $160,000 on a mortage on the home, which was valued at $350,000. He told a local news affiliate that “As far as what the bank is going to get, I plan on giving them back what was on this hill exactly (as) it was. I brought it out of the ground and I plan on putting it back in the ground.”

Check out the video of the home before and after, and hear from Terry in his own words describe why he did it.