Wednesday, December 23, 2009

Reigning in Credit Card companies begins February 13, 2010

Bank of America nicely summarized some of the major changes coming due tot he Credit Card Accountability and Disclosure (CARD) Act.  In short, your credit card company can't be so much of a money-grubbing bastard anymore.  Although there are so many avenues not closed by this act, they actually still can be pretty evil.  For example, there is no regulation preventing credit card companies from charging whatever they want for interest rates. 

Here's some of the good stuff that should have been in place already were it not for a congress that is in bed with the financial sector:
  • APRs can only be raised if you do not make at least the minimum payment within 60 days of your payment due date.  Previously, they would jack it up probably the next day after your payment was due.
  • If your APR was raised due to missing a payment for > 60 days, your APR can be returned to the original rate if you pay your bill for the next 6 months by the due date.
  • 45 days notice required for increasing your APR for any arbitrary reason.
  • Amounts you pay over the minimum payment apply to the highest APR balances first.  Without this legislation, they would just apply it to whatever they wanted that maximized their profit and minimized your wallet.  Because they are mostly still evil, they are going to still apply the amount due to the lowest APR balance first.
  • Payment due dates will always fall on the same date each month.  You will also get at least 25 days from the statement closing date for your payment due date.  I'm guessing that they changed your dates in the past to make you more likely to miss your payment so this is a nice catch.
  • Paying more than your minimum amount due will actually reduce your interest costs because of changes in how finance charges (that B of A now says will be all called "interest charges") are calculated.
  • Payment cutoff times are changing from just one timezone (e.g. Eastern) to be the actual timezone of the facility to where you mail your payments.  This helps you because a payment received on the Tuesday it is due, but after 5pm eastern, was actually counted as "late" prior to this law.  Unbelievable.
  • Cash advance checks they mail to you will all have printed expiration dates and will not be honored after that date.  Sounds like a good security measure to me.  I hate that they send checks about every month; waiting for someone to steal them from my mail.
  • So long as you pay at least the minimum amount due by the due date, your APR for existing balances will not be affected.
  • In addition to your payment grace period (where you can carry a balance but not pay interest), if you have paid in full previously but on one statement do not pay in full (thus leaving a balance on your card), portions of your "Purchase balance" (I'm interpreting this to be stuff you just bought on your card this billing cycle) are eligible for an extended interest-free period.  Thus, you do not get dinged right away for finance charges on your entire card balance.  That was the really annoying thing.  If you had $1000 on your card, and missed a payment by even one day, you would get assessed a finance charge on -- not just the amount on your bill, but the total amount you owed on your card -- even stuff in the grace period.  So, you had no way of reliably knowing what you might have to pay.  This sounds like it's a game-changer for that practice.
But beware that you will be seeing some "novel" attempts by the card companies to return to excessive profitability at your expense at some time soon.  They are poring over the legislation to find the loopholes.

Thursday, December 10, 2009

New study suggests exposure to microbes as kids is healthy

Best to have a kid get a cold here or there to reduce the chance of higher inflammation as adults and protect them from cardiovascular diseases.  We were just talking about this...

Everyday germs in childhood may prevent diseases in adulthood