"Along with legislation to protect credit-card owners from unfair rate hikes, homeowners from mortgage fraud and abuse and taxpayers from wasteful defense spending, this kids' tobacco bill would be the fourth piece of bipartisan legislation that I've signed into law, over the last month, that protects the American consumer and changes the way Washington works and who Washington works for," the president said.... --more--"
Also notice that the MSM NEVER MENTIONS OBAMA's "ACHIEVEMENT" is CROWING ABOUT! They just call it the "new rules."
Also see: Giving Credit Where Credit Is Due
"Citing regulatory costs, credit card issuers end fixed rates" by Candice Choi, Associated Press | July 12, 2009
NEW YORK - It could be time to kiss fixed-rate credit cards goodbye.
Two of the biggest issuers in the nation - Bank of America and Chase - say they’re switching some fixed-rate cards to variable rates to manage costs in light of the sweeping new reforms to the credit card industry. The interest on variable-rate cards is tied to the rise and fall of the prime rate.
Banks to Obama and public: (See gesture here)
The changes will be effective starting in August for both banks. Discover Financial Services already moved some of its cardholders from fixed to variable rates in June.
The moves are just the latest clampdown on cardholders over the past year. To prepare for a new law that will limit banks’ ability to change card terms, lenders have been raising interest rates, tightening credit limits, and closing inactive accounts.
Now banks say the switch to variable rates will further limit their risk under the new credit card law, which becomes effective in February. “Variable rates reflect Chase’s changing costs for funding credit card loans. As a result, our customers may benefit from lower rates when the costs to Chase are decreased, or may experience higher rates as costs increase,’’ the bank said.
Yeah, right, the USURIOUS BANK is going to LOWER RATES out of the goodness of their heart! They REALLY THINK you is THAT 'TOO-PID, 'murkn!
I am GLAD I CUT ALL MINE UP YEARS AGO!!!!!!
Chase and Bank of America wouldn’t give specifics on how many accounts the change will affect, but they said they will continue to offer some fixed-rate cards. Chase has 159 million credit cards in the United States and Canada, while Bank of America has 70 million worldwide.
Variable-rate cards make up 66 percent of credit cards issued by the nation’s largest lenders, according to Bankrate.com. Fixed-rate cards are generally reserved for the best customers.
Translation: ONLY the WEALTHY ELITE are going to get fixed rates!
But despite the name, the terms on fixed-rate cards could always be changed in the past. That allowed banks to make the gamble of offering customers favorable fixed rates - then raising rates if the customers later proved too risky, said Leigh Allen, chief executive of Global Consumer Finance Advisory, a consulting firm.
The LIES JUST NEVER STOP, huh? And THEY WONDER WHY we HATE THEM?
Now that lenders will have limited ability to change card agreement terms, Allen said they will have to exercise a lot more caution in issuing fixed-rate cards.... There’s another reason variable-rate cards work in lenders’ favor. Banks can set a “floor’’ in the fine print of a card agreement, meaning the customer’s interest rate won’t fall below a certain level regardless of how much the prime rate drops.
It is what is known as LOOTING, folks!
For instance, if a card’s rate is based on the prime rate plus 5 percent with a floor of 10 percent, the rate on the card wouldn’t drop below 10 percent even if the prime rate fell below 5 percent.
The current prime rate is around 3.25 percent.
Jacobson would not comment on Chase’s policy on floors; Bank of America said it does not have floors on variable-rate cards. New credit card reforms may not be the only reason banks are migrating to variable rates, said Greg McBride, a senior analyst at Bankrate.com.
Card issuers typically start favoring variable-rate cards when the prime rate is at low levels, McBride said. This lets them benefit as the prime rate inevitably climbs back up. But banks’ preferences may not swing back toward fixed-rate cards even as the prime rate rises - at least not as much - given the new rules limiting lenders’ ability to raise rates on a whim.
Oh, so ON a WHIM the BANKS could RAISE RATES, huh?
And OBAMA'S LAW did NOTHING to CHANGE THAT!!