Deceptive Credit Cards - Targeted

News tonight includes a big story from the Federal Reserve and other regulators regarding deceptive trade practices in the credit card industry. It's interesting to me that this was a Friday night story, which is usually when the government comes out with stuff they don't want anyone to really notice.

The proposed rules would be the biggest clampdown on the industry in decades, aiming at protecting people from credit card companies that arbitrarily raise interest rates or don't give borrowers adequate time to pay their bills.

The proposals would also restrict such lender practices as allocating all payments to balances with lower interest rates when a borrower has balances with different rates. The Fed board voted Friday to approve the recommendations.

In the long run, this is good news for folks with credit card debt. Note, though, that these rules are not slated to go into effect until the end of the year and are technically only in the "proposed" stage.

Among the new rules would be prohibitions on:

-Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay;

-Unfairly allocating payments among balances with different interest rates;

-Retroactively raising interest rates on pre-existing balances;

-Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account;

-Unfairly computing balances in a computing tactic known as double-cycle billing;

-Unfairly adding security deposits and fees for issuing credit or making credit available;

-Making deceptive offers of credit.

Currently, if you get a zero interest balance transfer but already have a balance on the card, any payments you send are allocated to the zero percent balance while the current balance keeps accruing as usual. Intuitively, you'd think it would be the other way around. These rules would stop that.

Double cycle billing is something I've explained before and it gives me a headache, so I'm glad to see it go.

Over limit fees when a rental car place puts a $500 "hold" on your card that will never actually charge an amount that high - gone.

Raising rates on current balances arbitrarily - gone.

Extra fees and charges for issuing credit, which is something that usually targets folks with bad credit and is a way to effectively raise rates tremendously by increasing the balance that has interest charged against it - gone.

Deceptive offers of credit, which kind of encompasses all of these things - gone.

Until now, the credit card industry has worked on the "disclosure" rule. In essence, if it's in the fine print in legalese and you go ahead and use the card, too bad for you. These rules will hopefully bring about much more transparency.

Now for the bad news.

This is conjecture on my part, but if I'm a bank and I know that these rules are going to likely be put into place by the end of the year, I'm going to do my rate raising or my non-renewing of accounts (thereby demanding repayment within a certain amount of time) before that happens. If you currently carry credit card debt, don't be surprised if you get a notice in the next few months that your rates are rising or (if your card expires in 2008) your account will not be renewed.

What can you do? I'd say keep an eye out for your junk mail. Look for low rate balance transfer offers. Balance transfers are at least bound by the time that they agree to in the offer unless you make a late payment, in which case all bets are off and you'll probably go to a much higher rate. Pay down what you can on any cards that expire in 2008.

Maybe I'm wrong, maybe they'll think that shenanigans like that will be scrutinized ahead of these changes. Unfortunately, given the flippant tone of the Citicard rep who told me that my rate increase was purely a "business decision," it seems like the companies have taken a pretty combative stance and it would kind of surprise me to see them all of a sudden decide to go the altruistic route.

By the way, the credit card industry is saying that these new regulations are just going to raise rates for everyone. Well - good. The industry has been completely flouting the basic rule of lending - risk vs reward - by offering overextended consumers low interest debt for years now, and it's coming home to roost. And in reality, that threat is more for the government than the citizens. In effect they're saying that without low interest debt, consumer spending is going to slow down. While I know that might hurt in the short term, it's ultimately a good thing for all of us.

Interesting times.

Roger Waters

We went to the Roger Waters concert at the Pepsi Center last night. He's definitely getting a little long in the tooth, but it was still a great show. The first half of the show was old Floyd and his solo work, the second half was the entire Dark Side of the Moon. The old Floyd included Wish You Were Here, Have a Cigar, Mother, Shine on You Crazy Diamond, Set the Controls for the Heart of the Sun (that was kind of a surprise) and others. He had a nice picture montage of Syd during Shine On. Waters' own material gave people an opportunity for a bathroom break - sorry Waters, love ya but you know that's how it works.

He did make quite a production about one of his songs, Leaving Beirut. It was a little heavy handed with the politics, and generally just not a great song (in my opinion) but it still had a few cheerable moments, including references to King George and the religious far right.

Although I couldn't bring in a camera, I did have my Blackberry Curve. Our seats were in the upper level and just a little off center to the left, which we did on purpose because his stage show is "big" enough to see from even the very last row and so why spend extra, which meant that there was no way I was going to get any good shots of the little creatures milling about on the stage.

I didn't expect to see a pig since it went missing at the Coachella concert, but of course they had a spare.



The second half of the show went by way too fast. This isn't a good shot, but it was a really neat effect live.



The encore was Vera and Comfortably Numb (no way he was going to leave that out, right?).

Overall, a fun evening and I'm glad we went - you never know how long these older guys are going to be around, right?

Oh, and here's a picture of Ben, just because it was on the phone too.

Have you served in the military?

This morning I had a nice phone conversation with my parents, complete with toddler babbling in the background, and at one point Dad and I discussed a conversation he recently had with some chums regarding our current political landscape. Some of his buddies from college are apparently quite right wing, while dad tilts precariously to the left. He isn't your stereotypical treehugging hippy commie liberal, he's more of what a Republican might have represented 50 years ago - self-sufficient, capitalist, community minded.

At any rate, he said that in a recent conversation about the war and John McCain's qualifications for the Presidency because of his military service and prisoner experience, he voiced his negative opinion about both. After that, the conversation escalated to the point where he was finally asked if he had ever served in the military. The implication was that if he had not, his opinions on any military conflict were meaningless.

I am completely sick of this limp strawman argument.

Now, perhaps my interpretation of the conversation was incorrect. Perhaps they meant that it's important for someone to have relevant experience in order to accept a position. If that's the case, I'm sure his buddies have written plenty of letters to the White House over quite a few of Bush's appointments.

If they really did mean that those without military experience should shut up about the war, however, then - wow. I mean, barring the ridiculousness of that sentiment right off the bat given that perhaps (and I'm being generous) 15% of the living population of the United States is serving or has served in the military, I'm willing to cut a deal with these folks and people like them.

I will stop expressing any opinion about the wars in Iraq and Afghanistan, and I'll bet Dad would be willing to as well, if the following people with no military experience will do the same:

Rush Limbaugh
Bill O'Reilly
Sean Hannity
Ann Coulter
Ted Nugent
Laura Ingraham
Glenn Beck
Michael Savage
Michelle Malkin

Do we have a deal?

It's a business decision ...

This morning in the mail, I received a notice from one of my credit card companies saying that my rate would be increasing about 50%, from around 12% to 19%.

After a few e-mails and phone calls to find out why my rate had changed, I just wanted to pass along some insight that everyone needs to understand about credit cards and that is this: your credit card interest rates have absolutely nothing to do with your credit scores, your payment record, your overall debt, income, or anything like that. The only thing that the credit card companies care about (and Citibank in particular, in my case) is meeting a certain revenue target and gaming your agreement with them in order to make that happen.

In a nutshell, when I called Citibank to ask them why my rate was changed when my credit score is in the mid 750's, our household debt has gone down, we've never been late on a payment to them or anyone else, the response was, "it's a business decision." Seriously, that was the answer, word for word. I was surprised by the rep's bluntness, but pressed on. "So, it has nothing to do with risk, it's all just about meeting revenue targets?" He said that yes, it had nothing to do with me, it was about hundreds of thousands of clients. I think what he meant to convey was that I shouldn't take it personally, but I very much took it that way.

When you enter into an agreement with a credit card company, understand that you are entering a contract where they are able to change their terms whenever they want but you have no similar option. If I actually had a purchase balance on this particular card, I would have the ability to "opt out" of this rate increase but would have to pay off the entire balance before my card's expiration date in 2008.

Here's the kicker, though. I do actually have a balance on this card. It's from a balance transfer I did a few years ago, and it's at 2.99% until it's paid off. The rep at Citicard assured me that this balance is not affected by the change, but on this notice, there is this paragraph at the very end:

"If we decide not to replace your card that expires in 2008, none of these changes will apply to you. You may use your account under the current terms until the expiration date on your card. At that time, we will close your account. You must then pay the balance under the current terms."

Now, call me cynical but I think that the odds that Citibank will decide not to renew my account past 2008 just went way up. I'm a losing bet for them, you see - a low interest rate, no new purchases at a higher rate, no merchant fees, and no late fees (after which they could raise my rate from 2.99% to 28.99%).

Now wait a minute, you say - people with bad credit have to pay higher rates on debt, right? Yes, that's true, and you'll definitely see this relationship when you buy a car or a house, but it's tenuous when you're talking about credit cards. All it means is that the vast range of possible rates you will pay with bad credit starts a little higher up the scale.

But even when you go buy a car or a house, your interest rate vs your credit score is just a starting point. I knew a girl with bad credit who went to buy a car and the dealer not only charged her an incredibly high 23% interest rate (which she deserved) but he also tripled the price of used car she was buying so that in effect, the "real" interest rate she paid for that car was closer to 90%. Since there are no laws about how much a dealer can charge for a car but a 90% interest rate would probably raise a few eyebrows at a finance company, they just switched around the equation to get what they wanted. Didn't do them much good since she couldn't afford payments that high - but might have been able to if they'd charged her the Blue Book value of the car and based the 23% rate on that instead - and the car was repossessed, probably to be cycled back out to some other poor purchaser.

Buyer (and borrower) beware ...

Why we banned legos ...

Someone recently pointed me to this story (which you'll have to go read yourself) and I am posting a response I gave on a private list here. It's an interesting experiment, no doubt.

This is interesting, and not nearly as infuriating as I thought it was
going to be, but it's written in a manner that suggests that they are
not educating so much as indoctrinating. Sure, these kids came to the
experiencing with plenty of social hypnotism already but assuming for
a moment that they didn't, these teachers were looking in horror at
what appeared to be a natural progression and decided that it needed
to be stopped and rerouted entirely instead of trying to work within
the framework that the kids set up themselves. You can't just "ban"
the means of production and restart with communism, the world doesn't
work that way. They may have taught these kids an interesting lesson
about working together on a small team but they sure as hell didn't
teach them anything about what the world is like. This appears to be
a self-serving experiment using children as the test subjects.

> "Well, I can let other people use the landing strip, if they have
> airplanes," said Oliver. "Then it's fair for me to use more cool
> pieces, because it's for public use."

Natural.

> A group of about eight children conceived and launched Legotown. Other
> children were eager to join the project, but as the city grew — and
> space and raw materials became more precious — the builders began
> excluding other children.

Also natural. They thought of it, they "owned" it, they procured the
resources - why exactly should they open up their vision to the
masses? There might be some good ideas out there but it could just
turn out to be a big mess where nobody's happy with the results.

> Occasionally, Legotown leaders explicitly rebuffed children, telling
> them that they couldn't play. Typically the exclusion was more subtle,
> growing from a climate in which Legotown was seen as the turf of
> particular kids. The other children didn't complain much about this;
> when asked about Legos, they'd often comment vaguely that they just
> weren't interested in playing with Legos anymore.

"They'd often vaguely comment" - that statement is intentionally
implying that these kids were upset and lying when perhaps they just
found something else to do.

> a society that we teachers believe
> to be unjust and oppressive.

And yet your salary comes from your affluent, mostly white,
upper-middle class clientele. Interesting.

> Hilltop is housed in a church, and over a long weekend, some children
> in the congregation who were playing in our space accidentally
> demolished Legotown.

Good opportunity to teach kids about insurance, isn't it?

> From our
> conversations, several themes emerged.

Emerged? I doubt it. Several themes were drawn out.

> * Moderation and equal access to resources are things to strive for:
>
> "We should have equal houses. They should be standard sizes.... We
> should all just have the same number of pieces, like 15 or 28 pieces."
>
> As teachers, we were excited by these comments.

I think it sounds ghastly and ridiculously naive.

> All structures are public structures. Everyone can use all the
> Lego structures. But only the builder or people who have her or his
> permission are allowed to change a structure.
> *
>
> Lego people can be saved only by a "team" of kids, not by individuals.
> *
>
> All structures will be standard sizes.

Ugh.

Payday Loans - Predatory Lending Association (PLA)

Predatory Lending Association

Check out this site, Predatory Lending Association (PLA). It's so on target, and so viciously funny. I have a friend who got caught in the payday loan trap, and it was pretty much the end of the road. Between payday loans and getting completely screwed on a car loan, there was no way she wasa ever going to make good on her debts. It may have turned out for the best, though, since it was the "rock bottom" she needed to finally file for bankruptcy. C'est la vie.

A Week in the Life of a Caravan - Day Two

Whew! No Halloween vandalism to the Caravan, which is living in the driveway this week. A few years ago I wouldn't have even considered vandalism a possibility, but our town has seen a bit of trouble lately with bored teenagers, including car windows being shot out and silly spraypainting.

Anyway, I was happy to find all of the windows intact when I went out to make an early morning run to the grocery store for some chili cookoff supplies. The windshield was a little frosty, which had me stymied for a second because I didn't know all of the controls yet. Isn't that always how it is with new cars? New cars and rentals. Can't tell you how many times I have turned on windshield wipers when I meant to hit a turn signal. I did find the defrost, but didn't wait to see how long it took - just hit the windshield wipers with a squirt of washing fluid and off we went.

I suppose I should mention the rear view camera. I have a friend who has had this for a few years and it took her way longer than a week to get used to it, so I'm not even going to try. I'm OK with the trusty old "look in the mirror" or "turn your head around" method. I did notice the night before last that the car beeped when I was backing up in a parking lot, I think because I got close to a curb. That's great, but I didn't realize that's why the car beeped until I got home and read about the "rear park assist" feature that is supposed to warn you about hazards beyond your line of sight in the back. Since cars have so many beeps and blips nowadays, it might be nice for that particular one to be something more distinctive, like an enthusiastic "LOOK OUT!"

Back to the day ...

The Chili Cookoff for our local MOMS Club was a great success. We only had six entries, and it was hard to disguise which one was mine because I made green chile. If you've never spent a lot of time or just don't green chile often, here's a little tidbit of information - it's always a surprise to see how hot your particular batch of green chile stew has turned out. In this case, I tried it early in the morning and my lips almost melted off. I like spicy, but this was crazy. In an effort not to maim my friends, I drained all of the liquid off and poured in a fresh box of organic vegetable broth. In the two hours between the broth transfusion and the cookoff it still picked up plenty of heat, and was pretty much perfect. I didn't win, but that's OK - I think a few people got to try something they'd never had before, so that's great!

The recipe, you ask? Sure ... but it's an approximate recipe. If you don't want to roast, peel and chop your own green chiles (and I don't blame you) or are not in an area where green chiles are easy to find from local growers, check the freezer section of your grocery store. Go for medium heat, at least. The mild ones in the cans in the Mexican section of the store are pointlessly mild.

Slow Cooker Green Chile

1 pound pork, cut into small pieces
2 Tbsp vegetable oil, or enough to brown the pork
2 Tbsp flour
3 Russet potatoes, cubed
1 small onion, chopped
2-3 cloves garlic, chopped
6 Anaheim chiles, roasted, peeled and chopped
Chicken or Vegetable Broth

Toss the pork with the flour and brown in oil in a heavy skillet. Transfer pork to crockpot, add potatoes, onion, garlic and chiles. Add enough broth to cover. Cook on high 4 hours or on low ... pretty much as long as you'd like.

Check for flavor and add salt or a boullion cube if you'd like.

If you would like to thicken your stew, mix a little cornstarch or arrowroot to a very little bit of cold water. Add to slow cooker, turn to high and cover - the stew will need to come to a boil to thicken.

That's it! HOW EASY can you get? Serve with shredded cheese, sour cream, and flour tortillas. I think the next time I make it, I'll toss in a bag of frozen corn just for some more texture.

I didn't have the Caravan for the rest of the day because my husband decided he wanted to take it in to work, mostly because he found a Sirius radio station that is all Grateful Dead, all of the time. Since I'm not a Deadhead and he's not going to get to listen to it when we're all out together this weekend, it was the least I could do for the guy, right? When he got to work, he mentioned the Dead channel to a fellow fan who said that he had been trying to decide whether to go with Sirius or XM radio, and that channel just made the decision for him. We might not help Dodge sell any Caravans, but we created a new Sirius customer!

As for today's thoughts on the vehicle in general, I have to say that I'm not fond of the key at all. It's not a key, it's more like a plug. In a way, it reminds me of the little keys you can get at some arcades instead of tokens, or a locker key. This is a completely irrational dislike, I'll freely admit - and it's partly because the key made me feel like an idiot on the first day.

You see, the rep had shown me the function that allowed you to start the car remotely, which I tried out later from the kitchen (in the back of the house) just to see if it would work and to startle my older boys, who were out waiting in the car for me to get my stuff together to run errands.

I go out, get in the car, and try to put the car in reverse. No go. I press the brake (which I have to do on my car to get out of park) - nope. I check the doors, thinking maybe there is some overzealous protection thingie - that's not it. It didn't occur to me for a few minutes to actually insert the key into the ignition since the car was running, but that was the problem.

In hindsight, this makes perfect sense - you wouldn't want to have your car out in the front driveway ready for anyone to come, bust out a window and drive off. Still, when a car is running, I expect all of the usual "car" functionality, including the ability to move. Call me crazy.

Two days down, five to go! We're having fun!