Response: Limit Credit Card Rates

I just got done reading GaYoung's post about the Senate's plan of action to limit credit card rates. I couldn't agree more with GaYoung nor the Senate. Credit card rates are inching up every time we look at it and it's about time that a legislative body steps in for the people. Christopher Dodd, Chairman of the Senate Banking Committee, states that the Senate's move was to protect consumers from the lenders. Lenders are increasing rates even on those people who are paying their bills on time.

There used to be a time where on time payments meant something; however, this hasn't been the case recently. Chase MasterCard holder, Mark Alexander, could be considered a perfect example of the perfect borrower. He rarely has a balance on his card and has always paid his bills on time during the past 10 years. Then why is that his interest rate increased by 40%? What does this mean for me, a student who just made her first purchase on her credit card and making a payment before they even sent the bill? What is there for me to look for when lenders are trying to raise the rates more than normal?

That's why the Senate has stepped in and began to find ways of improving the situation. They have made it where lenders can no longer increase the rate of those card holders who pay bills on time and meet all other criteria. The Senate has also made it where banks can no longer imposed penalty rates for payments late by one or two days. Borrowers still have the normal 30 day grace period.

This is what we need. Card holders need some leeway to still be able to use credit cards without having additional money sucked out of us. If I am portraying credit card companies as gougers who steal money from innocent card holders, that's not what I want to display. Because the truth is that there are bad card holders out there. There are many people who default on their obligations. But for those of us who continue to do as the lenders have asked, it's only fair that we get treated with some respect.

Sources:
1. http://glee1102.blogspot.com/2009/03/limiting-credit-card-rates.html
2. Gelles, Jeff. "Changes to credit card rules on the way." Philadelphia Business Today. 5 April 2009. 6 April 2009 <http://www.philly.com/philly/business/homepage/20090405_Changes_to_credit_card_rules_on_the_way.html?text=med&c=y>.
3. Bloomberg. "Senate panel approves bill limiting credit card rates." Gulfnews.com. 1 April 2009. 6 April 2009 <http://www.gulfnews.com/business/Banking_and_Finance/10300419.html>.
4. Associated Press. "Credit card interest rates rise marginally." Businessweek. 6 April 2009. 6 April 2009 <http://www.businessweek.com/ap/financialnews/D97D4B880.htm>.