Friday, May 15, 2009

American Roulette

One of my frequent readers pointed out at a meeting (in the real world) recently that I had not updated this blog of late. I told him I was looking for an issue that spoke to me enough to work through the flu haze and inspire a blog.

I am not sure this is it or that I am merely feeling better. I am happy to see that finally there will be some legislation regulating the credit card scam. Is it too little too late? And is the credit card lobby, with the threat of financial collapse, still getting its way?

Yes, I said scam. If your local Mafia member down the block did what credit card companies do with government blessing they would be facing felony charges. I once played what I call American Roulette with credit cards. I had a fantastic credit score and every time I turned around they were raising my credit limit.

And I got endless offers for 0% on balance transfers. Following my skiing accident while going through 2 1/2 years of medical treatment I virtually lived on credit cards. And yes, you can pay your Master Card with your Visa. I was constantly playing one card offer against another, paying on line to avoid late fees (they mail the bills so late that no way can you pay by mail and not be late), and constantly going for the lowest stated interest rate (this can be a lie). Figuratively I was constantly rotating the credit cards like the chamber of a pistol, and like Russian Roulette you eventually come up with the loaded chamber.

My favorite scam of theirs was the one where they raise your interest rate because you called to see if you could get it lowered. This was something Oprah recommended as a way of getting out of debt. If you call and ask, she said, they will work with you. No they won't. Nor will any of those agencies that will give you free debt advice. They are run by the credit card companies to delay you filing bankruptcy. Oh, and by the way, the credit card companies are why we have tougher bankruptcy laws these days. Too many people will getting in trouble with credit cards and using bankruptcy as a get out of jail free card. It is not free and I am not sure Chapter 13 is not jail.

The bill before congress, thanks to President Obama pushing the issue after it has lingered for eight years, will make the small print on card statements larger and easier for a non-lawyer to understand (basically they all said: our game and you are f**ked), and require the credit card provider give you ample notification of raise in interest rates, changes in late fees or shortened billing cycle, etc. What it does not do is cap interest rates. There had been a push to set a limit of 15% but the whiners said that would make it harder for people to get credit cards. So they will still be able to raise your rate to 36% but with 30 day notification.

Yes, there is a loaded chamber in American Roulette. Maybe more than one. And all I can see this bill will do is require them to let you know there is.