Bad side of credit-card bill

0 Comments | Deseret News (Salt Lake City), May 27, 2009 | by Seattle Times

The following editorial appeared recently in the Seattle Times:

Credit-card customers, victims of complicated and aggressive billing schemes, won a substantial consumer victory with passage of the federal credit-card bill. Much of the legislation is good news, but it also contains bad unintended consequences and an ugly, disconnected amendment.

The House and Senate approved legislation that gives cardholders badly needed relief from sneaky and unfair billing tactics. The new legislation requires expanded and clearer disclosure of card terms and creates new rules about when companies can increase interest rates on existing balances.

Companies will have to wait until a customer is 60 days late making a minimum payment before applying a penalty. A payment that arrives before 5 p.m. will be considered on time, not late because of some bogus morning deadline. Banks now have to get customer permission to exceed the credit limit. Student credit will tighten.

An odd consequence of the bill is the companies' plan to pile additional charges on better customers and take back some existing perks.

Savvy consumers should be miffed by the punishment of good customers who exhibit responsible bill-paying behavior. In the strange parlance of the industry, deadbeats are not customers who fail to pay the bill on time. They are cardholders who pay in a timely manner and therefore don't generate enough fines and fees.

The companies clearly aim to supplant lost revenue with new charges on better customers. How counterintuitive and illogical. They plan to revive annual fees, limit cash-back and rewards programs, and even charge interest right after a purchase instead of allowing a grace period.

Shaking more money out of top customers so blatantly to make up for the other lost revenues is a mistake. Sterling customers should not be victims of sensible consumer-protection legislation.

Lawmakers tacked on an unconnected and absurd amendment that blocks the government from barring loaded weapons in national parks and wildlife refuges, if allowed by state law. Guns in national parks are a bad idea -- a clear attempt to stymie President Barack Obama, who is eager to sign credit-card legislation.

Sen. Tom Coburn, R-Okla., says the provision will reduce crime in parks. Who is he kidding? Guns in the parks are a recipe for trouble. Park visitors are not allowed to shoot bears or any other animals, so there is little else to fire at other than people.

This is a plan to push the envelope on the issue of guns in general. Lousy legislative shenanigans.

Distributed by McClatchy-Tribune Information Services.