Credit Card Accountability

In a world where shopping online and booking a hotel or a rental car usually demands plastic, few people can survive without a credit card. But vast changes in credit regulation coupled with a souring economy turned 2009 into the most turbulent credit year in decades, with a record number of rate hikes, consumer cancellations and changes in fees, terms and credit limits. And experts say there's more in store for 2010. "2010 is going to be the year of accountability," said Adam Levin, chairman and co-founder of Credit.

Insurance is one of those products you hope you never have to use. But if you do have to, you expect it to be there for you when you need it. At the very least, you don't want your insurer throwing curveballs at you with a lot of rigmarole about terms and conditions that you weren't even told about in the first place. That's the situation Dudley Johnson, 57, of Altadena found himself in after trying to get Citibank to make good on its Credit Protector Program, which promises to safeguard people who lose their jobs by "freezing payments to your Citi account for up to two years.

Credit card users with money smarts and discipline can protect themselves better than any legislation can. Initial provisions of the federal Credit Card Accountability, Responsibility and Disclosure Act took effect in August. They require banks to give cardholders longer notice before increasing the interest rates on their plastic. And cardholders can opt out as long as they stop making charges and pay the balance under existing rates within five years. That's all good, of course.

Dear Liz: I was laid off in November 2009. For the first year, I took the unemployment and tried to find a job without success. So, in late 2010, I started my own business, contracting mainly for employers for whom I used to work. Unfortunately, I am making about a third of what I used to make, and even after cutting expenses, there are months that I can't pay my bills. I have taken two withdrawals from my self-directed IRA this year. Is that the smartest thing to do? Or should I even out my cash flow by writing myself loans from my home equity line of credit?

Dear Liz: I thought I read in your column that credit card companies must now allow 45 days' notice for people to make their payments. I received my credit card bill on April 3 and the due date was April 13. In order to pay on time, I would have had to mail it by April 6 or 7, which gave me only 3 or 4 days' notice. What's up with that? Answer: You're confusing two different parts of the Credit Card Accountability, Responsibility and Disclosure Act. One part of the CARD Act requires issuers to give their customers 45 days' advance notice of significant changes to their accounts, such as interest rate charges or new fees.

Dear Liz: My wife and I had two houses built for resale. Then, as you know, things went bad. The construction loans were continued at 7.75% and we finally rented the homes, but the mortgages are costing more than we're getting in rent. To refinance, we would have to pay down each loan by $100,000, because the homes have fallen in value and lenders are more conservative. I am thinking of threatening to walk. Our credit would be impacted, but I am over 70 and do not plan to do a lot of borrowing, so that does not seem to be an issue.

Dear Liz: I am 20 and trying to build my credit. I rented an apartment for a year, and I bought a car last year but needed a cosigner to get the loan. It seems like none of this is factoring into my credit score, because I can't get a credit card! I applied for one through my credit union and was denied. Is there any other credit card I can get besides a secured card needing a deposit? I want to refinance my car to get the cosigner's name off it, but if I have zero credit I'm not sure I'll be able to. Answer: You're right that your apartment rental probably isn't being factored into your scores.

This year was a total drag for consumers. Many of us lost our jobs, homes were foreclosed upon, medical bills piled up, recession-weary families scraped by month to month. But it was also an extraordinary year for consumers, with significant progress made in making banks play more fairly, reforming the healthcare system and improving product safety. We may not get everything that we want. But the mere fact that all these things have gotten so much high-profile attention, and that at least a modicum of change seems likely across the board, underlines consumers' higher standing in public policy.

New federal protections for credit card users go into force today, but in advance of the tougher rules, banks have been raising fees and interest rates -- hoping to ensure that one of their historically most lucrative businesses remains that way. Since Congress approved the landmark credit card overhaul legislation last spring, many issuers of plastic have jacked up interest rates, switched accounts from fixed to variable rates, and raised annual...

Providian Financial Corp. disclosed an agreement to sell 1.7 million of the risky credit card accounts that hobbled the once-high-flying company. The accounts, holding about $2.6billion in unsecured loans, will be turned over to two limited-liability companies formed by Goldman Sachs & Co., Salomon Smith Barney, CardWorks Inc. and CompuCredit Corp., an Atlanta firm that specializes in the high-risk credit card market.

The breach in Citigroup Inc.'s online security, affecting more customers than originally thought, shows that financial institutions still are struggling to block hackers and still are loath to explain to customers and the public what thieves took. Hackers obtained information on 360,083 credit accounts of North America customers in an attack last month, Citigroup said late Wednesday. That's about 80% more than first estimated. The giant New York banking company, parent company of Citibank, downplayed the break-in, saying its security team identified the attack May 10 and "immediately rectified" the situation.

Dear Liz: My wife and I had two houses built for resale. Then, as you know, things went bad. The construction loans were continued at 7.75% and we finally rented the homes, but the mortgages are costing more than we're getting in rent. To refinance, we would have to pay down each loan by $100,000, because the homes have fallen in value and lenders are more conservative. I am thinking of threatening to walk. Our credit would be impacted, but I am over 70 and do not plan to do a lot of borrowing, so that does not seem to be an issue.

Dear Liz: I thought I read in your column that credit card companies must now allow 45 days' notice for people to make their payments. I received my credit card bill on April 3 and the due date was April 13. In order to pay on time, I would have had to mail it by April 6 or 7, which gave me only 3 or 4 days' notice. What's up with that? Answer: You're confusing two different parts of the Credit Card Accountability, Responsibility and Disclosure Act. One part of the CARD Act requires issuers to give their customers 45 days' advance notice of significant changes to their accounts, such as interest rate charges or new fees.

Dear Liz: I am 20 and trying to build my credit. I rented an apartment for a year, and I bought a car last year but needed a cosigner to get the loan. It seems like none of this is factoring into my credit score, because I can't get a credit card! I applied for one through my credit union and was denied. Is there any other credit card I can get besides a secured card needing a deposit? I want to refinance my car to get the cosigner's name off it, but if I have zero credit I'm not sure I'll be able to. Answer: You're right that your apartment rental probably isn't being factored into your scores.

This year was a total drag for consumers. Many of us lost our jobs, homes were foreclosed upon, medical bills piled up, recession-weary families scraped by month to month. But it was also an extraordinary year for consumers, with significant progress made in making banks play more fairly, reforming the healthcare system and improving product safety. We may not get everything that we want. But the mere fact that all these things have gotten so much high-profile attention, and that at least a modicum of change seems likely across the board, underlines consumers' higher standing in public policy.

In a world where shopping online and booking a hotel or a rental car usually demands plastic, few people can survive without a credit card. But vast changes in credit regulation coupled with a souring economy turned 2009 into the most turbulent credit year in decades, with a record number of rate hikes, consumer cancellations and changes in fees, terms and credit limits. And experts say there's more in store for 2010. "2010 is going to be the year of accountability," said Adam Levin, chairman and co-founder of Credit.

In a sweeping tax-evasion probe that could affect thousands of people, the Internal Revenue Service went to court to seek records on U.S. taxpayers with credit card accounts in three offshore banking havens. Credit, debit and charge cards at banks in the Bahamas, Cayman Islands and the country of Antigua and Barbuda are covered by federal court petitions filed Wednesday against American Express Travel Related Services Co. and MasterCard International.

Credit card users with money smarts and discipline can protect themselves better than any legislation can. Initial provisions of the federal Credit Card Accountability, Responsibility and Disclosure Act took effect in August. They require banks to give cardholders longer notice before increasing the interest rates on their plastic. And cardholders can opt out as long as they stop making charges and pay the balance under existing rates within five years. That's all good, of course.