Credit Cards: Clearing, but with a Strong Probability of Curveballs

As we noted in the last newsletter (see “Credit Card Act of 2009,” June 2009), new legislation now curtails several egregious practices that credit card companies have been using to gouge their customers. Now, with some sectors of the economy—though certainly not others!—beginning to move in the direction of recovery, it’s the right moment to reiterate my stance on credit cards for overshoppers: they’re like lighter fluid for a pyromaniac.

But what of the fine new protections written into the law? Already, the companies are finding ways around them, or prying open new loopholes. Writing in the Huffington Post, Arthur Delaney tells of Chase cardholders whose minimum payments have suddenly vaulted from 2% to 5% of their substantial statement balances. Chase explains: “millions of Chase customers have taken advantage of our promotional low rate financing over the last five years. Most of these loans have been paid back in less than 24 months. However, a small percentage of customers have not made as much progress in paying down these loans.”

And while the new laws—parts of which, incidentally, don’t take effect until next year—offer certain kinds of protection, cardholders can expect new fees and new twists, new ways to make the built-in impulsivity of plastic more expensive. Don’t succumb. If you’re an overshopper, cut up your credit cards. At a very minimum, consciously and deliberately leave them home when you go shopping.

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