17 posts tagged “debt”
Protection from arbitrary rate increases
Credit card companies are now required to provide cardholders with a minimum 45-day notice on any interest rate increase, allowing consumers enough time to consider their options. Additionally, most promotional APRs will be required to last for a minimum of 6 months.
The right to have rates reviewed and reduced
Issuers are required to review APRs of all accounts every 6 months to see if a reduction in APR is warranted.
Fair allocation of payments
While in the past, most credit card companies applied payments towards balances with lower interest rates first, the new legislation will force them to put that payment towards balances with higher interest rates. This will ensure that cardholders who make their payments on time will be in a position to pay the least amount of interest
No universal default
Drawing on credit reports from other issuers, credit card companies used to be able to raise interest rates to the default rate if the cardholder defaulted on another credit card. Now, they can only focus on the cardholder's payment record concerning their particular card.
No double-cycle billing
Double-cycle billing allows for credit card companies to compute finance charges based on more than one billing cycle. Thus cardholders are penalized for carrying a balance in past months even if they paid off their balance in the most recent month. Credit card companies will now be prohibited from using this double-cycle billing practice.
No fees for paying your bill
Many credit card companies currently charge a $5-15 surcharge if a payment is made over the phone instead of online or by mail. This part of the legislation ensures that, when using regular processing service, there will be no such fees. However, issuers will still be able to charge for expedited service via phone or mail.
Protection from due date gimmicks
Payments made by a cardholder by 5 P.M. EST on the due date would be considered on time, and protect consumers from unnecessary late payment fees and possible interest rate increases.
Enough time to pay your bill
Currently, credit card companies give 14 days between statement notification and the payment due date — this time period is often known as the "grace period." Now, issuers will have to give 21 days for cardholders to make on-time payments.
Education on dangers of minimum payments
Currently, issuers do not educate cardholders that how they pay off their balances (i.e. minimum balance vs. full balance) affects their financial standing in the long run. The new laws would require quarterly reports that disclose the time and interest costs to pay off credit card balances, if the consumer only pays the required minimum.
Protection of young cardholders
In the past, young cardholders were drawn into attractive introductory offers only to find that they are unable to pay off their bills. Now those under 21 can only get a credit card in two ways: (1) have a qualified co-signer, or (2) prove they have the ability to repay their credit card. In addition, issuers will no longer be able to offer tangible gifts on college campuses. Finally, issuers offering college-specific cards will have to report their contracts with universities regularly for federal government review.
The Fair Issac Corporation created the FICO score, and they are the folks that run myFICO.com. In fact, myFICO.com is the only place you can go to get your official credit score.
myFICO.com gives you your official FICO credit score as reported by Equifax when you sign up for a free 30-day trial of Score Watch. The sign up process is quick and easy. You will have to provide your name, address, date of birth, and social security number so that myFICO.com can pull your credit report and credit score. You'll also have to provide a credit card. You won't be billed unless you decide to keep the Score Watch past the 30-day free trial
A week before you free 30-day trial is up, they will send you an email notifying you that you credit card will be charged unless you cancel Score Watch. If you decided to cancel your free 30-day trial before you get charged, it's easy to do. Simply click on the "Support" tab at the top right of the main myFICO.com screen. This will take you to a list of help topics, the first of which provides the simple steps to take to cancel your subscription.
You can get a free estimated credit score at Quizzle (no credit card required)
"A recent college graduate is suing her school because she has been unable to find a job.Trina Thompson, 27, graduated from Monroe College in the Bronx in April. She says she has not been able to find a suitable job since she graduated with a degree in information technology. As a result, Thompson is now suing to get back the $70,000 she spent on tuition."
I have documented previously that the value of a college education has decreased while tuition has soared. Students leave with huge debts that cannot be repaid with today's salaries. Besides that, why pay to learn only Keynesian economics or law that ignores the exact language of the US Constitution?
If other businesses offer a money back guarantee, why not colleges? It would force them to compete on their merits rather than on endowments. It would also bring about better transparency to their career placement numbers.
In a 2003 paper (New Evidence on the Interest Rate Effects of Budget Deficits and Debt), Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, 10 year bond rates will double from their current 3.5%.
I showed that in this earlier post and I explained how to play it!
TBT up $4 since last Friday while TMV is up $10 since last Friday (since I'm a risk taker, I own TMV instead of TBT)
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In yet another example of unintended consequences that make problems worse, new appraisal rules (Home Valuation Code of Conduct) are slowing the housing recovery.
The HVCC went into effect at the beginning of May. The HVCC forces a firewall between lenders/brokers and home appraisers. Now, lenders and brokers are forced to use appraisal management companies. Realtors say some of these appraisers are not only not local, they don’t even have access to the local MLS. They are doing appraisals using computer models, often incorporating distressed sales as comps, and often not even knowing that the home had extensive renovations or an addition. As a result, the appraisals are coming in far lower than the agreed-upon purchase price.
