Wednesday, January 18, 2006

Cut the Cards

Changes to credit card bills were inevitable. Illinois residents have their GOP Congressional Delegation to thank. Discover Card’s policy changes, effective April 1, 2006, are an excellent example of how hard they worked for their business constituents. Obviously, the right incentives played a key roll:

MINIMUM MONTHLY PAYMENT – The greater of: (i) $15 or the New Balance if the New Balance is less than $15; or (ii) any amount past due plus the greater of (a) 2% of the New Balance (excluding current Period Finance Charges, Late and Overlimit Fees) or (b) current Period Finance Charges plus Late and Overlimit Fees plus $15 (not to exceed 3% of the New Balance), with (a) and (b) rounded up to the nearest dollar. However, the Minimum Payment Due will never exceed the New Balance.

DEFAULT RATE PLAN – The rate increases by five percentage points (5%), not to exceed 28.99%, and remain as either a fixed or variable rate based on the type of rate in effect before the increase. If any other rate applicable to your Account is less than or equal to the new purchase Annual Percentage Rate, it will increase and change to be the same rate and type as the new purchase Annual Percentage Rate; if any other rate exceeds the new purchase Annual Percentage Rate, it will not increase or change type.

RETURNED PAYMENT FEE – Currently, the Returned Payment Fee is $29. The new the Returned Payment Fee is $35.

LATE FEE – If the sum is equal to or less than $500, the Late Fee is $15, and if the sum is greater than $500, the Late Fee is $39.

OVERLIMIT FEE – The amount of the Overlimit Fee is based on the sum of all outstanding purchases, cash advances, balance transfers, other charges, other fees and Finance Charges at the end of the billing period. If this sum is equal to or less than $500 and you exceed your credit limit, the Overlimit Fee is $15. If this sum is greater than $500 and you exceed your credit limit, the Overlimit Fee is $39.

PERIODIC FINANCE CHARGES – If the Prime Rate increases, the Minimum Payment Due could increase. Cardholders could also have multiple promotional and non-promotional rates that apply to their Account.

PERSONAL INFORMATION COLLECTION – Account balances, payment history, Account usage, the types of services from transactions and other dealings with the company and others, the balances of loans with other lenders and payment history with others from consumer reporting agencies, the Internet service provider, e-mail address, the computer's operating system and Web browser, Web site use, and product and service preferences from the Web site visits.

PERSONAL INFORMATION SHARING – Cardholders (unless they specifically change their preferences for each account) will receive for products and services are provided directly to them from Discover. If someone takes advantages of the products or services, the retailer may obtain personal information because only Cardholders with certain characteristics received the offer. Without prior approval, the company reserves the right to share personal information with other members of the corporate and non-members of the corporate family (e.g., mortgage lending services, securities and asset management services, investment opportunities and mutual funds, and may include non-financial service providers and retailers). Discover also reserves the right to share personal information with companies that perform support or marketing services on their behalf (e.g., mailing, market research and data processing; other financial institutions with which they have joint marketing agreements; or companies that are partners for co-brand credit card programs or reward programs). Federal law already permits credit card companies to share member information with consumer reporting agencies, service providers and financial institutions with which they have joint marketing agreements. It also permits them to share information about their experiences and transactions with you, such as your Account balance and payment history with us, with other members of the corporate family.
The good news is that cardholders have the right to reject these policy changes. All they have to do is notify the company in separate written correspondence with their name, address, telephone number and Account number(s). Once the company receives the notice, they will immediately close the Account.

Financial corporations (in addition to the Oil and Gas Industry, Health Care, Organized Labor (although Rep. Shimkus consistently votes against all pro-labor legislation), Communication, Technology, Finance, Insurance, Business - Retail Services)are the true constituents of John Shimkus, and they thank God every day. Their money was well spent. The residents of IL-19 thank God every month they can afford their high fuel bills and every day they do not suffer a financial emergency. Legalized loan-sharking will not be a pleasant experience for them. Even on the very best of days, their quality of life continues to suffer the consequences of John Shimkus in office – whether they voted for him or not. Voters have the power to remove him from office. It just takes a plurality.

As for the latest policy changes – got scissors?


At 20 January, 2006 13:49, Blogger Kankakee Voice said...

If the economy tanks, and there's bigger chance that it will than most people are aware of, I think - due to a continued rise in energy/oil prices and the housing industry going bust, many people will hit hard by the new bankruptcy bill and the credit card legislation. It could get really ugly for the middle class.


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