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More Effective Credit Card Rules in USA

New regulations in the USA, the Credit Card Accountability Responsibility and Disclosure Act of 2009, is bad news for banks reeling from housing bubble losses, and the recession. According to law firm Morrison & Foerster, these rules will cost banks $12 billion a year in lost revenue.

Folks better watch out! Banks will find other coercive means to charge fees they can pass on, covertly! Then again, if folks use credit cards like they should, as checks, they should be fine. Consider Citicorp Inc’s new offer. Citi will give cardholders a credit of 10% on their total interest charge if they pay on time. I think it is sad banks need to entice folks to pay on time. Really, I don’t think folks should use cards if they can’t pay on time. That’s why, I have no problem with Citi’s counter-punch! If folks don’t pay on time, their interest rate will be 29%. Hopefully, this will be conspicuous, and be a deterrent to consumers who want to spend funds they don’t have.

I think there are other excellent features of the new regulations. Credit card companies must tell their customers how long it would take to pay off the balance if they pay the minimum monthly payment only. This should be a wake up call! As well, customers can exceed their credit limit only if they agree ahead of time to pay a penalty fee.

I pray Canada will issue similar regulations. But most of all, I pray folks will learn to use their credit cards like checks.

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Michel A. Bell

Michel A. Bell is a former senior business executive, author of five books, speaker, and adjunct professor of business administration at Briercrest College and Seminary. He is founder and president of Managing God's Money, a private mission devoted to teaching biblical stewardship of time, talent, money and other resources. Visit Managing God's Money

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