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Credit Cardholders' Bill of Rights, Effects on Rewards and Some Remaining Cash Reward Cards

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As expected, the Senate passed the Credit Cardholders' Bill of Rights Act (H.R.627). The House is expected to pass it, and it will likely be signed by the President by the end of the week. The WSJ Wallet Blog and this CNN Money article have good summaries of what these new credit card rules will mean to consumers. As I mentioned in yesterday's credit card post, these new rules may encourage the credit card companies to cut back on their reward programs. As the WSJ Wallet post mentioned, "The future of rewards programs is also up in the air." However, this Motley Fool commentary thinks it's foolish for credit card companies to charge their best customers:
I'm a credit card deadbeat, and I'm proud of it. And if credit card companies think they're going to start making any more money off me, then they'd better think again

I don't think I could have said it any better. Let's hope that the credit card companies think this way.

In my yesterday's post, I mentioned PenFed's attractive cash reward credit card (see post). I should have also mentioned this post which describes Charles Schwab's 2% cash back credit card and also lists some of the other lesser-known cash back credit cards. Fidelity also has a 2% cash back credit card (see post). And finally, this FW thread has a few other good ones including the Associated Bank Cash Rebate Card which still has 5% cash back for everyday purchases.


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Comments
11 Comments.
Comment #1 by raderator (anonymous) posted on
raderator
Most of these cards are too much hassle and likely to be cut back anyway. I might just go with the Capital One No Hassle Cash Rewards Card (2% on gas and groceries, 1% on the rest, no limits). Get via Card Lab and you can put your dog's picture on it. Or the Bank of America Accelerated Cash Rewards American Express Card (1.25% cash back on everything, no limits).

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Comment #2 by Anonymous posted on
Anonymous
I have a capital one no hassle card and I have named it "Hassle card" in my computer. They are horrible! Great commercials, bad service, worse rules. Somebody has to pay for all those commericials. It is the cardholders.

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Comment #3 by Anonymous posted on
Anonymous
Well if they want to cut back on the credit card reward programs, then go ahead. VISA and MasterCard are the ones that will eventually suffer.

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Comment #4 by Anonymous posted on
Anonymous
There is always a loophole in any law Congress get involved.
Credit card issuers will find it by the time the bill becomes law.
There will be no changes in their behavior.

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Comment #5 by Anonymous posted on
Anonymous
The credit cards companies will be better off with the new law from congress.
They will introduce new fees and eliminate grace periods like:

Say goodbye to 0% APR promotions.
Rewards programs will be less rewarding.
The end of grace periods.
Prepare for higher rates.
Watch out for new kinds of fees.
Credit-Protection Plans will be much more expensive.
Yearly membership fees and so on.

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Comment #6 by Anonymous posted on
Anonymous
B of A just lowered my credit limit from $8000 to $4oo. What will I buy with such useless card and credit limit.
I'm cutting it in half and mailing it back with a note:

"RETURN TO SENDER, GARBAGE INSIDE"

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Comment #7 by Anonymous posted on
Anonymous
I wonder if B of A will lower my credit line as well soon. That will impact your FICO score which then impacts your insurance costs and borrowing rates. You end up paying more for other things even if you never used the card.

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Comment #8 by Anonymous posted on
Anonymous
There is an article by Rick Newman called "Why Credit Card Fees Won't Go Up" at Yahoo Finance. Go to finance.yahoo.com/news/Why-Credit-Card-Fees-Wont-Go-Up to read this article. I hope he's right, but that assumes enough foresight in the banking industry to realize that it is not smart to alienate high-quality borrowers. After all, what will happen to their cash flow if they don't have people paying their balances in full while they are waiting for everyone else to make the minimum payments?

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Comment #9 by RJM (anonymous) posted on
RJM
It seems likely that rewards will decrease overall for at least some period of time. Like with the rewards checking account, rewards for "deadbeats" that dont carry balances have likely been subsidized by those who pay lots of interest.

All we can do is flock to the best deals out there.

I called Chase again but they dont know what their three 3% categories will be starting in July but I anticipate them changing every month kind of the way Discover does. As a result, I dont use Discover very often. Certainly not year round.

Im forced to stay with Chase MC for my Phone bill because A&T&T only accepts mastercard. Penfeds rewards card is a visa.

That was 3% in the past, will only be 1% after July.

I cant imagine them charging interest from the date of purchase.

There are too many "deadbeats" that wont go for that.

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Comment #10 by Anonymous posted on
Anonymous
According to April 15, 2009 Bloomberg news report, Bank of America is raising transaction fees on most of their credit cards beginning June 1, 2009: Standard balance transfer fee & Cash advance DirectDeposit and Check Cash advances will be 4%(with $10 min); ATM or Bank Cash Advance fee may be 5%, with $15 min.) Foreign transaction fee for any transaction made in a foreign currency, and any transaction made in US dollars that is process outside the US will be 3%. The article also states that Discover Card plans to increase balance-transfer fee to 4 percent.

If you check most (popular) new Bank of America credit cards today, then you will see these increased prices in their new cards (but the fee for balance transfers and direct deposits subject to the Intro APR (usually 6-12months) is sofar 3%. They still have a handful of cards at 3%; some others... like Fidelity Investments or Schwab or other credit card programs with FIA Card Services have 3%; but higher standard APR's!

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Comment #11 by Anonymous posted on
Anonymous
This sort of reminds of back several decades ago when I first applied for a credit card. When I first got one, there was no annual fee. Then banks started to think it over about the no fee aspect and then started to change their terms and charge a fee. A backlash occurred with people closing accounts because of it. Eventually, the banks relented and removed the fee. Let them try it again now. Their business and operations need to be "downsized" like so many other businesses have had to endure.

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