The Mostly Bad --and Some Good News About Your Credit Cards

The best news is that we actually have a bill that addresses some consumer issues in the credit card industry. The bad news is still very bad news: the lobbyists were able to get their grimy paws on it, and there was no compromise allowed on capping interest rates.So, guess what? Surprise, surprise, interest rates are not capped.-- Credit card companies can charge as much for them as they want. It is also unclear whether individual state usury laws will apply.

The other bad news is that credit card companies are thinking of charging interest from the day of purchase. That means that the 50 million people who pay their credit card bills on time might now get charged interest. The average good capitalist reading this will say the credit card companies have a right to make money, and they certainly do. But any small business owner knows the credit card companies charge the business every time there is a transaction. Therefore, the credit card companies would be double dipping by charging interest, too. Charging interest immediately would be a very bad trend and would punish the very kinds of consumers that stores want to have. The Yiddish word for this, which has seeped into the English language, is "chutzpah" -- and the credit card companies have plenty of it.

There are some good things, too. If you are under 21, you have to have a parent or a spuse who is over 21-years-old sign for you so that you can get a card. Either it's that or you have to prove that you can pay off the balance. Believe it or not, this change will increase military readiness, as I was told by a Pentagon recruiter that one of the biggest problems that young recruits have is their inability to handle money and credit card debt.

Although there is no cap on interest rates, companies cannot increase users' rates unless the account is overdue --.there must be a written notification 45 days beforehand. Gift cards must also have an expiration date that's clear. Credit card companies have to apply any payment above the minimum to the part of the card with the highest interest rate. These same card companies also have to send out statements at least 21 days before payment is due. The other good news is that under the new rules there will be no more going over your credit limit and then being charged a fee; the folks at the credit card companies will need your permission if it looks like you're going go over your the credit limit. So for those who don't pay a lot of attention, no more creeping credit balances. This is a bill that needed to happen, but the two glaring omissions are no cap on interest rates and leaving a hole with interest starting the day of purchase so big that you could drive the U.S. Army through it.

Ellen Ratner joined Fox News Channel as a contributor in October 1997. Currently, Ratner serves as chief political correspondent and news analyst for "Talk Radio News Service" where she analyzes events, reports breaking news, and provides lively interviews with newsmakers in government and entertainment. She is founder of "Goats for the Old Goat." Over the last three years, donations have been made to acquire goats for liberated slaves who were returning to South Sudan. More than 7,000 goats have been donated to the people of South Sudan to provide sustainable sustenance for their families and a means to begin their lives again.