Economic blowback: You may have prepared yourself to pay nearly twice as much for gasoline this fall but, like most Americans you may be unaware that the Bush government has another big ugly surprise in store.
New regulations coming online over the next few weeks will force credit card companies to double your minimum monthly payment. It’s for your own good but if you’re living check to check and currently paying $200 a month, your new amount due could be $400 a month.
The motivation behind this has merit. The credit card companies have gamed the system with the low rates – usually 2 to 2.5 percent of the monthly balance – so that people who can only afford the miniumum monthly payment never make any progress paying off their nut.
New regulations from the Office of the Comptroller of the Currency in the Treasury Dept., that will increase to around 3 or 4 percent during the last half of this year.
Thank God the Republicans took over and got rid of The Big Nanny Government!
But seriously, this being a Republican government, the motivation for the new regulation is meant to help the banks, not the customers. This new fees will prevent lower income people from getting credit, which will lower the rate of defaults on their credit card bills.
Of course, the banks could have just raised the fees themselves – except that some of them would be greedy and lower their rates to snap up customers desperate for the lower rate. Damn you, Law of Supply and Demand!
If you feel you are about to be washed overboard by this fee hike, here is advice from financial columnist Dennis Rockstroh:
- Call the credit card company and negotiate a lower rate.
- Look for a credit card company with a lower rate, switch and pay off the card that has the higher rate.
- If you have equity in your home, use that to pay off the credit card. Then use your credit cards only if you can pay off the balance each month.
- File a complaint with the Office of the Comptroller of the Currency at (800) 613-6743 or www.occ.treas.gov/ customer.htm.
- Contact your local federal legislators — all of them — and tell them that you are as mad as Hades over this. You can find contact numbers for them at www.congress.org/ congressorg/home. Tell your friends. Get a movement going. Remember, that’s how We the People got Congress’ attention over the telemarketer problem.
Politically, the timing of this could not be worse for President Bush. Millions of middle-income families are going to find their household budgets are upended by $3 per gallon gasoline, spiking home heating costs and now credit card payments that jump from $200 to $400 – just in time for the holidays.
Merry Christmas from the GOP.