The Credit Card Act took effect yesterday, and I’m facing a real literary dilemma. As you can see from the title, we’ve chosen a Shakespearean reference to reflect our sentiments about the Act. But exactly which play to choose from was a tough call. Coming in as a close second was Macbeth, Act 5, Scene 5:
[The Credit Card Act is] but a walking shadow, a poor player that struts and frets his hour upon the stage and then is heard no more: it is a tale told by an idiot, full of sound and fury, signifying nothing.
The politicians and consumer advocacy groups (you know, the ones that no best how we should live our lives) will no doubt celebrate today. They will pronounce the Credit Card Act as long overdue; a real win for the little guy. And to be fair, the restrictions on a card issuer’s ability to raise interest rates will benefit some consumers and the expense of others. But here’s the reality about the Credit Card Act:
- Debt: If you were in credit card on February 21st, you were still in credit card debt on February 22nd.
- Bad Credit: If you have poor credit, your credit card options have been severely limited. Basically your options are down to a secured credit card or a prepaid credit card.
- Fees: Fees will likely go up as credit card issuers attempt to address the loss in revenue brought about by the Act.
- Rewards: One of the fears was that the Credit Card Act would really take a bit out of rewards credit cards. While card issuers have made subtle changes to rewards programs, adding fees for example, the rewards cards are still plentiful.
If you’d like to read other perspectives on the Credit Card Act, check out these articles:
- Credit Card Laws & The Credit Card Act: What’s Next?
- Credit card protections in effect
- FRB: Consumer Information: What you Need to Know – New Credit Card Rules
- New credit card law: pros and cons
- Bank Systems & Technology: The Blog: Living with the Credit Card Act, Part I
- Credit Card and Debit Cards No Longer Have Automatic Overdraft and Over Limit Protection
- New credit card era begins with latest CARD Act provisions
David,
Nice summary on the Credit Card ACT. Wonder how these changes will play out for consumers. I hope the card issuers don’t pass on too much of these costs to us!