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Credit Card Reform (Mostly) Makes Sense

I don't agree with President Obama on many things, but believe that the credit card reform he pushed through Congress makes a lot of sense.

Basically, the bill removes a lot of arbitrary ways that card companies used to "scam" consumers.

For instance, the interest rate cannot be raised without a 45-day notice. Formerly, a card company could raise rates not only without notice, but RETROACTIVELY.

"Double billing" has been eliminated. A card company can charge interest only on the most recent cycle not on what went on before.

There are strict pre-conditions to be met before lending to persons under the age of 21. Loans, like alcohol, should not be extended to minors in most cases. Unlike the case with alcohol, reasonable exceptions are allowed (like a wage earner, or a minor with an adult co-signer)....

"Universal default" has been eliminated. A credit card company can base terms only on one's history with them, not with other companies. In theory, "uni... default" was not necessarily a bad thing; in practice, it was too often abused.

Critics of the bill say that it would force companies to penalize responsible (but unprofitable) users by charging interest from the day of purchase (a good, economically "true" thing), or charging them processing fees (reasonable).

Other critics point out that the changes would hurt card companies. That's true. But it curbs profits that card companies shouldn't have been making anyway. If this is "hurt," we need more of it.