mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Saturday, December 20, 2008

I'm not sure this is a victory for some consumers...

Consumerist has an article about new rules for the credit card industry that the Federal Government is requiring.

Some of the changes aren't a huge deal - longer periods of time for changes of terms, longer time before payment is due, changes in time for payment of fees for subprime cards with huge annual fees and low credit limits. But some of them are major changes - no raising interest rate on existing balances, no two-cycle billing, payments have to be applied to high-interest balance first.

These are being touted as a major boon to consumers. And they probably are for certain types of consumers - the kind of people who run up huge credit card balances and pay them off very slowly. But the problem is that I'm not that type of consumer. In fact, I'm the opposite.

I put pretty much everything I buy on credit cards - mostly an Amex Blue Cash. Everything from major purchases to this morning's cup of coffee and donut. Then I pay off the balance in full every month. I never pay interest, I get up to a month or more of float between when I actually make a purchase and when I have to give up the cash for it, and I get several hundred dollars in rewards back every year - free money for buying stuff I would have bought anyway.

My fear is that now that credit card companies won't be making as much money off of people who carry balances, they will reduce rewards that accumulate to those that do. So while this law may help some people - many of them less responsible - I expect it will punish others, those that are more responsible.

It's already pretty amazing that credit card companies put up with people like me - people who don't pay them, but rather get paid by them. With less profit from less responsible customers, I expect they might not be putting up with me much longer.


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