The Fed proposes new credit card rules

The Federal Reserve is proposing new rules (large pdf), on credit cards.

This is a second stage of rules, to go into effect on February 22, 2010.

One of the best things is banning the credit card industry from applying payments to your lower interest rate first.

Ya know, you have a balance and you get an offer which says "2.99% on new purchases for 6 months", which you accept.

Well, your payment goes to pay off any purchases under that 2.99% interest rate and not that huge balance you have that is accruing at 17.99%!

That interest rate fake out game will be gone!

Another goodie is banks must not only disclosure exorbitant over the limit fees, but get acknowledgment from the card holder such fees are ok.

The rules also ban that lovely technique of offering you a low rate and then magically raising it in the first year you have the card.

They also have to wait for you to be a dead beat for 60 days. No more games with the payment due date and then shutting down their website or payment methods or claiming they didn't receive your check in the mail! Ya know, the one where they decide to now charge you 25% interest which sends you to bankruptcy court in record time, all by claiming you were late? That will be no more. Only if you do not pay your bills for 60 days can they play that default rate catch-22.

Now, if only the Federal Reserve and Congress would ban the new big brother game of behavioral profiling.

Literally credit card companies are lowering credit limits, raising your rates based on if you shop at Wal-mart or go to a bar too much. Now, not only is this a massive invasion of privacy, we're sorry but credit scores should be limited to.....uh, how well you pay your bills and that's it!

Behavioral profiling of individuals, now where is it written if I go to the Dollar store for a bargain magically I'm now at risk to pay my bills? 1984 extraordinaire!

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