The new Federal law regulating some of the more pernicious practices of the credit card companies has finally taken effect, after a delay of many months granted by our Considerate Congress, which did not want to put any undue (or well-due) pressure on their favorite lobby.
Indeed, having to drop a few of their worst practices, such as raising interest rates with little or no notice to card users, might have worked a hardship on the companies' ability to gouge their customers unmercifully.
We consumers, however, were crunched by most of the issuers of credit cards right up to the last minute, and will undoubtedly continue to be crunched via innovative techniques already being designed to avoid or evade the new law. For example, just a few days before the new law's February 22 start date, we received notice from Citibank that our Citicard would now begin to have a $60 annual fee -- unless we charged at least $2400 a year on it, in which case they would waive the fee. How gracious of Citibank! We called and told them what they could do with their fee, and cancelled the card.
That example, however, is only the tip of the iceberg of consumer-crunching by the leading issuers of credit cards. In the many months prior to the effective date of the new law, interest rates and fees were raised unmercifully, grace periods were reduced, arcane clauses were added to credit card agreements, penalty interest rates for such sins as late payment were increased -- you name it, the crunchers did it to us. Most galling, perhaps, the letters perpetrating these and other abuses usually began with statements about how they were only imposing these new or increased charges for our own good.
While it may seem hard for most consumers to understand how higher charges and fees actually help us, one must understand the reasoning of the credit card crunchers. They are merely seeking to better meet our needs through full staffing of call centers, rapid responses to inquiries, and so on. All of this enhanced service to us costs money -- and guess who gets to pay? WE DO -- far be it for the credit card crunchers to absorb any increased costs from their large profit pool!
It is too bad that those of us who urged Congress to move up the start date of the new federal law to December 2009 from February 2010 found that our pleas fell on deaf Congressional ears. Those lobbyists for the credit card crunchers had indeed done a good job for their employers -- and a bad job was perpetrated against the public.
Undoubtedly, even now the credit card issuers and their attorneys are busy finding innovative ways of continuing to crunch us, through practices not covered by the new law. Like liberty, the price of limiting such new abuses is eternal vigilance. We all need to tell the credit card companies to stop crunching us, once and for all.