Credit Card Bill Passed
The House of Representatives today gave final approval to a credit card bill that would prohibit credit card companies from arbitrarily raising interest rates on existing balances, and charging certain fees. Final House passage of the credit card bill in the House was by a margin of 361 to 64, and it followed Congressional approval that was passed on Tuesday (May 19).
The House had approved a more diluted credit card reform bill some time last month, but chose to send the stronger Senate version to the President, who will now be able to sign the bill into law by Memorial Day, as he had requested.
This landmark new credit card legislation will undoubtedly force banks and the credit card industry to reinvent itself, and also force consumers to rethink the way they use credit cards. The bill will prohibit credit card companies from raising interest rates on existing balances unless the borrower is at least 60 days late. If the card holder pays on time for the following 6 months, the company would have to restore the original rate. On cards with more than one interest rate, issuers will have to apply payments first to the debts with the highest rates, which would thus help borrowers pay off their cards more quickly.
It is important to note though, even after President Obama signs the bill, the law won’t fully take effect for nine months. That’s a 9-month loophole that reportedly has some consumer groups concerned that credit card companies will use this time to hike interest rates and fees whilst they can. Consumers, be on the look out for this!
Banks Charging For Overseas Credit Card Purchases
Be careful how you use your credit card when you travel abroad. Many banks are now charging customers a fee when they use their credit card for overseas purchases (which includes online transactions with non-U.S. merchants who don’t use a U.S. credit card processor).
Starting this month, Discover Financial Services began charging a new 2% fee for foreign transactions, while more credit-card customers at Bank of America will get hit with foreign-transaction fees next month (June 2009). Late last year, American Express raised its transaction fees to 2.7% from 2%.
For many years, banks have charged customers a fee for using their cards overseas IF the purchases were made in a foreign currency. Visa Inc. and MasterCard Inc. charge a 1% fee for converting foreign currencies into U.S. dollars – a fee that most banks pass along, along with their own markups which typically range from 1% to 2%.
What banks do not currently (as of May 12, 2009) charge foreign transaction fees? Call your own bank / credit card company and ask customer service directly, but two large banks that don’t currently charge this fee are Capital One and Charles Schwab. But for how long though? Keep a close eye on your credit card statements and communications.
Public Savings Bank Secured Black Credit Card
Looking for a good, secured credit card? If you’ve got bad credit and need a good secured credit card to help build back your credit history, the Public Savings Bank Secured Black Card is ideal for this, as Public Savings Bank reports monthly to all three credit bureaus.