Flaherty's Credit Card Announcement
Yesterday's announcement of new rules for credit card companies was very good news for Canadians.
Unbeknownst to many Canadians, credit card companies have been introducing scandalous rules for charging interest. Once upon a time, I goofed up paying my Capital One credit card bill by entering the wrong amount. I was short a few dollars on my bill. As a result, I ended up paying $60 dollars in interest! It was quite literally a costly mistake.
Just recently, my credit card company changed their interest policy again. Now if I carry interest on my card, they will start charging interest from the date of my purchases, plus interest on any new purchases. In the end, you don't get any grace period and you have to pay interest for approximately three months.
It's no bloody wonder people collapse under credit card debt. People don't have a fighting chance. Until the new rules take effect, my only option is to throw a bunch of money at my card and stop using it for two months. God help you if you don't have any cash to put on your card.
Unbeknownst to many Canadians, credit card companies have been introducing scandalous rules for charging interest. Once upon a time, I goofed up paying my Capital One credit card bill by entering the wrong amount. I was short a few dollars on my bill. As a result, I ended up paying $60 dollars in interest! It was quite literally a costly mistake.
Just recently, my credit card company changed their interest policy again. Now if I carry interest on my card, they will start charging interest from the date of my purchases, plus interest on any new purchases. In the end, you don't get any grace period and you have to pay interest for approximately three months.
It's no bloody wonder people collapse under credit card debt. People don't have a fighting chance. Until the new rules take effect, my only option is to throw a bunch of money at my card and stop using it for two months. God help you if you don't have any cash to put on your card.
posted by Jason at 9:06 AM
5 Comments:
I don't charge more than I can afford and I pay my account off every month. It's self- discipline not regulation that's the solution.
You're right. It's great news for the spendthrifts, the improvident, the utterly disorganized . . . you get the drift.
As we have seen in spades recently, the prudent are usually called on to bail out or subsidiaze the imprudent.
Credit cards were never meant to be anything more than a convenience so that you don't have to carry about gobs of cash and certainly not a source of unsecured financing.
Considering the minimum hurdles it takes to get a credit card, the repayment terms are probably cheap.
I am torn on this issue. On the one hand, it's in the national interest not to let the naive fall victim to corporate loan sharks. On the other hand, both parties enter freely into the agreement, and so what business is it for the government to interfere?
I'd like to see a lot more publicity on credit cards. There should be a site that clearly outlines the terms and rates of all major cards, and then rates the cards from best to worst.
If the financial companies know that their games will cost them customers, maybe they will start offering a better deal.
Just recently, my credit card company changed their interest policy again. Now if I carry interest on my card, they will start charging interest from the date of my purchases, plus interest on any new purchases. In the end, you don't get any grace period and you have to pay interest for approximately three months.Actually the requirement is already there, whether your credit card company complies or whether you notice their notice in the dozens of inserts that came with your statement is another question.
Not only that, but the banks if they are your card issuer are under even stricter requirements than what Flaherty has proposed here.
So not only is there the issue noted by your other commenters - i.e. whether the government should be micromanaging commercial contracts like this - but for the most part it is window dressing. Making small tiny changes around the edges to appear to be making changes.
The problem with credit cards for consumers is the high interest rate that never fluctuates based on market rates. Should this be regulated or not is an open question. Whether Flaherty's changes help anyone, is not.
Allow me to cut straight to the announcement for the sake of reference.
http://www.cpac.ca/forms/index.asp?dsp=template&act=view3&pagetype=vod&lang=e&clipID=2772
^Copy and paste the link.
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