How Credit Cards Are Getting Meaner
What’s going on inside the minds of credit card companies now that the CARD credit card reform act is coming down the pike? A customer service supervisor for a major credit card company emailed us to give us the low-down: reduced grace periods, cutting credit lines, increased fees on balance transfers, and, of course, jacked up APRs. Here’s the details:
REDUCED GRACE PERIODS
If you have a 25 or 28 day grace period, banks are going to reduce their grace period to the new minimum, 21 days.
CUTTING CREDIT LINES
Credit card companies are reviewing accounts for debt-to-income ratio, and lowering credit lines. “Lets say you owe 40k in debt, and your last reported household income is 50k. Well, if you already owe 40k, and you only make 50k, how are you ever going to pay that back? So the bank is dropping the line because they don’t feel they’ll ever get repaid if they give it to you. You cant default on another 10k if they don’t let you have it in the first place.”