Federal Reserve Proposal Would End Many Controversial Credit Card Practices
May 5, 2008 By Justin McHenry
The Federal Reserve Board closed out last week by announcing a set of regulations that would end some of the most controversial practices used by credit card companies. The regulations, which could go into effect by the end of 2008, would:
- Prohibit credit card companies from raising rates on existing credit card balances, unless a payment is at least 30 days overdue
- Force card companies to give at least a 21-day “grace period” before payments are due
- Have customer payments allocated to higher-interest balances first
- Stop subprime credit cards from offering extremely small credit lines that are then mostly used up by the initial fees the card requires
- Make credit card companies disclose what credit factors influence their decisions when offers are made that include differing tiers for interest rates and credit lines
- Make customer payments received by 5PM on the due date considered to be “on time”, and/or, if card companies set due dates when mail is not delivered or business is not conducted, payments would be considered on time if received the next standard business day.
Predictably, consumer advocates generally applauded the proposals while credit card companies and industry associations equated them with price fixing. While the final regulations may differ somewhat from what was proposed Friday—more likely to be watered down than made stronger—it is likely that at least some of these consumer-friendly proposals will be in effect come 2009.
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1.Discover® More Card - 0% APR on balance transfers for 12 months & 6 months on purchases, 5% cashback bonus in popular categories, up to 1% cashback bonus on all other purchases
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2.Chase Freedom Card - 0% Intro APR and no Annual Fee, 5% bonus cash back in popular categories , 1% cash bank on everything else
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3.Citi® Platinum Select® MasterCard® - 0% on purchases & balance transfers for Up to 18 months, APR as low as 9.99% variable. $30 statement credit.
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4.Blue Cash® from American Express - Earn up to 5% cash back on gas, groceries and drug store purchases, and up to 1.5% back on all other purchases, no annual fee, fast approval under 60 seconds
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6.American Express® Gold Card - 10,000 American Express Membership Rewards bonus points when you use the card for at least $500 in purchases within the first 3 months.
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7.TrueEarnings® Business Card from Costco & American Express - 4% cash back for annual gas purchases up to $6,000, 3% restaurants, 2% travel, 1% everywhere else, 0% APR on purchases for first 6 months







