The Federal Reserve today provided proposed new credit card rules to "protect consumers who use credit cards from a number of potentially costly practices." This is the second of three new sets of rules that will amend Regulation Z (Truth in Lending) for credit cards. Here are the proposed changes in the regulations which incorporates the provisions of the Credit Card Accountability Responsibility
and Disclosure Act of 2009 (Credit Card Act), which was enacted in May
The past week has seen a plethora of reports about ways for students to save. I thought it would be useful to put together many of these articles in one place. Continue reading if you are interested in finding creative ways to save money in these economically challenging times:
WSJ's blog The Wallet tackles the issue of the new credit card rules which would require the under-21 crowd to get a cosigner or provide evidence of their ability to repay the debt in order to be eligible for a card.
Here are some of the perspectives in support and opposition to the rules:
With credit card bill expected to be signed later today by President Obama, there has been a rash of stories about what impact this bill will have on the industry and consumers also. The Wall Street Journal is reporting today that card companies will be losing billions of dollars in fees:
"Robert Hammer, who runs a credit-card consulting firm, predicts that
the new law will subtract $10 billion in revenue from the industry's
overall interest income. Credit-card companies are expected to impose
$20.5 billion of penalty fees this year, up from $19.1 billion in 2008."
The article also notes that those firms reliant on "sub-prime" borrowers who have the most trouble paying down balances will feel the largest impact:
Here are the details of the bill that was passed by the Senate earlier today (from the Christian Science Monitor) which both critics and supporters agree "will fundamentally change the entire business model of credit cards."
"The Senate bill also prevents those under 21 from getting credit cards
unless a parent or guardian backs them up or if they take a
government-approved financial literacy test."
Without being specific, the CNN Money also noted that:
"Many Senate Republicans and a few Democrats have said they don't like
the Senate's legislation, making passage unlikely without concessions.
The sponsor, Sen. Chris Dodd, D-Conn., has said he's willing to
consider some compromises."