New credit card rules great for the unemployed

There’s been a lot of buzz about the new credit card bill that moved through Congress and is heading to President Obama to sign. Right-wing talk radio has made much hoopla of the changes; their rallying cry is good credit consumers will subsidize the bad. Even some news reports have made the same statement. (Back to that argument later.)

But for the jobless, this bill will give some much needed relief, from banning the practice of raising interest rates on existing balances and double-cycle billing. Here’s a rundown of the proposed changes:

• Companies can no longer charge consumers for paying their bills by phone;
• Creditors cannot raise your APR in the first 12 months of a new account;
• Promotional rates must last at least six months;
• No longer can your interest rate on existing balances increase unless you fail to pay for 60 days;
• Payments must be applied to the balance with the highest APR first;
• Credit card bills must be sent at least 21 days before the due date;
• Companies must give 45 days notice before changing your rates or fees;
• Credit card statements must be told how long it will take to pay off their balance if they only pay the minimum amount due;
• Creditors must remove any info given to a consumer reporting agency (Equifax, Experion, etc.) about new accounts if that card has not been used or activated within 45 days;
• The legislation bans double-cycling billing.

The new rules will probably help some people who have gotten behind on their credit card and have the means to pay it off. I, for one, don’t agree with the argument that the bill makes good credit holders pay for the bad. It’s entirely the choice of credit card companies to raise rates on the good consumers. They are choosing that option, so they can continue to enjoy enormous profit margins.

Of course, my ultimate advice is for everyone to cut up their credit cards. But, hey, that’s just me.