Obama’s Credit Plan

Nine long months ago, President Obama signed into law the Credit CARD Act, which is set to have a profound affect on the credit industry. Gone are those classic practices such as “any time for any reason” increases on balances. Gone will be late bill mailings or sunday due dates or any of the other myriad tricks the industry used to get you to miss a payment.

Sounds great, right? Riiiiiiiiiiight. Because the credit industry sure couldn’t figure out a way to, say, I dunno, adapt to the new circumstances or anything, could they?

Long story short, you can still get screwed. There, I warned you.

In fact, there are enough unintended consequences from the law that MORE people might actually be affected than the law helps in the first place.

To wit:

Since card issuers can’t raise those rates on you for 12 months, they are simply raising their advertised APRs across the board, which affects everyone shopping for a new card.

Under 21? Good luck getting your credit history started! Without a good paying job, an adult co-signer will be a must. Plenty of young people aren’t going to do that and their credit history will suffer for it.

Fees, fees, fees. Anywhere the card issuers can insert them that aren’t explicitly prohibited by the new legislation, they will put them. Look for them to show up all over your accounts from now on. Again, this affects everyone across the board.

Fixed rate cards are hard to come by. Most have switched to variable rates so they can still increase rates on the fly without needing the 12 month notice, assuming the underlying rate changes as well.

And last but not least, higher minimum requirements.