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Credit Is What Credit Does

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In the grand rush to make sure that corporate America pays the price for excessive borrowing and that lenders feel the confinement of that narrow space left between "redlining" and "reverse-redlining," somehow attacking credit card issuers seems to have hit the legislative agenda.
Normally, it would be our tendency to grumble about such things, but in this case, we would be remiss if we didn't offer at least lukewarm support. The reality is that fee structures and back office stuff as obscure as balance processing order is complex enough in the world of consumer credit that a little bit of regulation could be a very nice thing. And, of course, issuers are just going to buoy overall rates up to meet any losses in fees they incur due to new legislation anyhow, so we aren't sure exactly what Congress thinks it is doing here (unless it is simply moving revenues over to the actual interest paid- which, at least for transparency isn't a bad idea anyhow).
The Journal gives us a peek at what to expect:

Existing balances: Issuers cannot retroactively change the rate on an existing balance unless the account is 60 days delinquent.
Payments: A consumer payment above the minimum applies first to the balance with the highest rate.
Teaser rates: Issuers cannot raise rates for the first year after an account opened. Promotional rates must last at least six months.

Changing Credit: Highlights of the Senate Credit-Card Bill [The Wall Street Journal]


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