Friday, Sept. 18
Posted 11 a.m. EST
On Wednesday I wrote about the PartnersFirst cards, which conform with many aspects of the new credit card law that will take effect in February 2010. On Thursday, Bank of America introduced its BankAmericard Basic Visa, which is a response to the new rules. Here are some of the card features:
- Same interest rate for all types of transactions -- purchases, cash advances, etc.
- One interest rate (APR) -- prime plus 14 percent -- for life of the account.
- No overlimit fee.
- Flat $39 for late payments.
This card will be available in October, and BofA has three other BankAmericards on tap: Power Rewards Visa, Cash Rewards Visa and BankAmericard Visa (introductory promotional rate).
I'm sure all of the other issuers have new "vanilla" cards -- as Obama called them -- in the works as well.
Also this week, Chase introduced its online credit card management system called Blueprint, which helps cardholders track their spending in specific areas (gas, groceries, entertainment, etc.), set goal dates for paying off specific purchases, or choose which monthly purchases you want to pay in full each month to avoid finance charges, among other features.
Discover introduced a similar set of tools in 2007 that help consumers manage their spending and pay down their debt.
I know cardholders feel they've been beaten down by credit card companies this past year. After the financial meltdown, issuing banks cut credit limits and canceled little-used cards -- even for "good" customers who hadn't been late with payments or hadn't gone over their credit limits. And once the Credit CARD Act of 2009 was passed, many raised rates and changed cards from fixed to variable to get out in front of the new law.
I don't know if we're going to see a kinder, gentler credit card business as a result of the new law, but I do think that the credit card companies are going to have to become more consumer-friendly in order to maintain their business. Consumers already make more debit card transactions than credit transactions annually, and they've paid down a lot of their revolving debt in the past year -- more than $70 billion. But because of continuing financial problems and unemployment, more cardholders are defaulting on their credit card bills, putting the issuers in a bind.
Perhaps issuers will work with cardholders to help them manage, rather than default, on their debt? Maybe they won't jack up APRs to a 20 percent penalty rate after one missed payment?
I'm hoping this is the silver lining in the financial crisis for credit cardholders. We'll have to wait and see.
Comments? Questions? E-mail plastic_rap@bankrate.com.
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