[T]o make up for lost income, the card companies are going after those people with sterling credit.



Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.



“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”



As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote [today] does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.

Banks used to give credit cards only to the best consumers and charge them a flat interest rate of about 20 percent and an annual fee. But with the relaxing of usury laws in some states, and the ready availability of credit scores in the late 1980s, banks began offering cards with a variety of different interest rates and fees, tying the pricing to the credit risk of the cardholder.



That helped push interest rates down for many consumers, but they soared for riskier cardholders, who became a significant source of revenue for the industry. The recent economic downturn challenged that formula, and banks started dumping the riskiest customers and lowering their credit limits in earnest as the recession accelerated. Now, consumers who pay their bills off every month are issuing a rising chorus of complaints about shortened grace periods, new hidden fees and higher interest rates.



The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.

Consumer advocates say they have little sympathy for credit card issuers, arguing that they have made billions in recent years with unfair and sometimes deceptive practices.

“The business model will change because the business model doesn’t work for the public,” said Gail Hillebrand, a senior lawyer at Consumers Union.



“In order to do business under the new rules, they’ll actually have to tell you how much it’s going to cost,” she said.



With many consumers mired in debt and angry at what they consider gouging by credit card companies, the issue of credit card reform has broad populist appeal. Members of Congress and the Obama administration have seized on the discontent to push reforms that the industry succeeded in tamping down when the economy was flying high.



Austan Goolsbee, an economic adviser to President Obama, said that while the credit card industry had the right to make a reasonable profit as long as its contracts were in plain language and rule-breakers were held accountable, its current practices were akin to “a series of carjackings.”

Johnny Isakson (R-GA- $3,341,524)

Jon Kyl (R-AZ- $3,708,608)

Evan Bayh (D-IN- $3,987,896)

John Cornyn (R-TX- $4,314,592)

Richard Shelby (R-AL- $4,384,492)

Max Baucus (D-MT- $4,633,243)

Kay Bailey Hutchison (R-TX- $4,685,238)

Lamar Alexander (R-TN- $4,847,225)

Mitch McConnell (R-KY- $5,013,778)

Arlen Specter (D-PA- $5,753,310)

Joe Lieberman (I-CT- $9,981,924)

John McCain (R-AZ- $32,423,813)

If credit card companies can't rip off their least reliable customers, they'll rip off their most reliable customers. That's the message they're trying to get out now as Congress prepares to pass far too mild legislation reining in a few-- though certainly not all-- of the more egregious of the industry's predatory practices. Thereported that with Congress moving in to protect "riskier borrowers," from whom the credit card companies were stealingof dollars annually, the companies will try to make up the lost revenue by pillaging their best customers.Personally, I've never paid a nickel in interest to any of these filthy satanic usurers. My blood boils when a crooked bankster, who probably belongs in prison, blithely tells thethat people with sterling credit have gotten a free ride: “Despite all the terrible things that have been said, you’re making out like a bandit.” You want to talk "bandit?" Think of how much a better place the world would be if every stinking money-grubbing bankster was lined up against a wall, given a blind fold and a last cigarette.Keep in mind that these threats are coming from a batch of slimy incompetent characters who ran their businesses into the ground and were bailed out with billions of taxpayer dollars. Now they want to turn around and steal from the very taxpayers who saved their worthless hides!The banksters have used our bailout funds to lobby Congress and to bribe individual members. What they and their lobbyist are crying about is how-- in a society that has been engineered to make it nearly impossible to function without credit cards-- the Federal Reserve put a stop to the practice of arbitrary interest rate hikes based on tricking unwary customers, practices that make them over $12 billion a year in unjustifiable fees that amount to a combination of usury and outright theft.So who are the whores of the Senate who have worked the hardest for the bribes they have gotten from the banksters? The banksters know their bribes have always kept the following dozen crooks in their camp, regardless of how badly it hurts their constituents (from bad to worse):And it passed 90-5 with only 5 credit card industry shills voting "no," the two lame asses from Credit Card Rip-Off Central, Tim Johnson (D) and John Thune (R) plus three richly bribed Republicans, Lamar Alexander (TN), Robert Bennett (UT) and Jon Kyl (AZ). But you can tell who really had their hearts in protecting the banksters and screwing their constituents. Only Kyl and Thune voted against cloture . Always remember what Dick Durbin said as part of this debate-- the banksters own the Senate. They have plenty to be cheerful about today, although they will feign martyrdom.Jeff Merkley, who worked hard to getto pass, is more optimistic than I am about the bill and sounds like he's making the best out of a less than perfect situation. "Today’s vote in favor of credit card reform is a huge victory for American consumers. The CARD Act will end deceptive practices and hidden fees that are stripping wealth from Oregon families. I hope we’ll soon have a bill on the President’s desk to ensure that these reforms are in place and helping consumers. I have heard from families across Oregon who have been hit with fees and arbitrary rate increases even though they paid their bills on time and did everything right. It’s time to diffuse the ticking time bomb of credit card debt that resides in the pockets of every American.”

Labels: banksters, credit card companies, Culture of Corruption