In the US, a lot!! Because for reasons I will not even try to understand, the US Senate has just passed a bill that cracks down on credit card fees, with an attached measure that would allow guns in national parks. What the…..?
Like me you likely have at least one eyebrow raised right now.
Though at least the attempt to attach an immigration provision to the same bill, that would have banned credit cards from going to anyone who isn’t an American citizen, failed. Phew, at least some dose of reality.
So apart from the sheer absurdity of connecting guns in national parks to credit cards, this is a very significant change which will have a major impact on the US credit card industry. And of course what happens in the US often trickles down under eventually, so let’s take a closer look.
Essentially the changes, headed to Obama’s desk for signing today, will:
- ban interest rate hikes on existing balances
- dictate that 45 days notice must be given for significant interest rate, fee and finance change increases
- enforce the ‘good’ type of payment allocation (thereby stopping one of the banks’ sneakiest practices of all, where they apply money paid back to the lowest rate first, such as a balance transfer rate, and leave the high interest rate purchases or cash advances accruing)
- cease the practice of automatically taking a card over the credit limit and then applying a fee without warning.
- limit the number of cards and the amount of credit limits for people under 21
What an incredible victory for the consumer!!
Of course the US banks have tried every argument they can think of to stop this going ahead, and are essentially now threatening that interest rates and fees will have to go up for everyone. But those who respond by doing that will see consumers vote with their feet.
Happy days for US consumers.
I wonder if Canberra is watching?