Tories Introduce New Credit Card Rules

[Nat]

I also think we need to go back to the 10% min. payment these 2% of the balance is crazy.

On the other hand the interest charged is crazy they should have made 18% max, I've seen up to 28%!

[Alta4ever]

I also think we need to go back to the 10% min. payment these 2% of the balance is crazy.

On the other hand the interest charged is crazy they should have made 18% max, I've seen up to 28%!

I 've seen higher, typically dept store cards. If you can't afford the interest don't get the card, go to the bank and look for a lower interest alternative. If you don't qualify for one, there probably is a good reason for it, you can't afford it.

[Smallc]

According to a CBC story the other day, the majority of Canadians don't carry balances on their credit cards anyway.

[Argus]

According to a CBC story the other day, the majority of Canadians don't carry balances on their credit cards anyway.

Oh well that's all right then. So it's only 20-30-40% of Canadians being screwed every month - the poorest ones.

I can see why that wouldn't be very important to you.

[Smallc]

I'm not saying that it isn't important. What I'm saying is that many Canadians are quite responsible with their credit card use. I'm glad there making it better for the people that have a hard time, but I think one of the most important things that they could do is give more education when it comes to being responsible with credit cards.

[Nat]

Did you know that Visa doesn't get the interest but the issuing bank does. So if you have a Royal Bank visa the Royal Bank gets all the interest income, Visa only get what it charges the retailer. So the big banks got to keep their high interest makers still.

[capricorn]

I'm glad there making it better for the people that have a hard time, but I think one of the most important things that they could do is give more education when it comes to being responsible with credit cards.

Who do you mean by "they"? Who should be mandated with giving more education to be responsible card holders? The government? Credit card companies? Using credit wisely cannot be taught. It is usually learned the hard way. That means taking responsibility for your own decisions, learning from it and adjusting your behaviour.

[Smallc]

Using credit wisely cannot be taught. It is usually learned the hard way.

Almost anything can be taught....and yes, I do mean the government.

[capricorn]

Seriously smallc, you want the government to educate people on how to use credit effectively. How do you propose the government should do this?

And while you're at it, should the government instruct people on how to construct a budget?

[Smallc]

'The government' instructs us in almost everything. Is it really that silly to say that monetary skills education would be a bad thing? These types of programs already exist for aboriginal people, so I that that everyone should have the chance to learn.

[capricorn]

I'm not saying it is a bad thing. I'd love to learn to paint. I'm sure others would too. You think the government should offer art classes? Think of the logistics and the expenditures of teaching people how to manage money and how to paint.

As for providing monetary planning instruction for aboriginals, I didn't know that existed. Off the top, I'm not so sure I agree with that.

[Smallc]

They already have life skills classes in school. Perhaps those should be expanded to focus more on money? They also have life skills classes for some people. Perhaps people that want or need help should be able to have that type of resource available?

[capricorn]

They already have life skills classes in school. Perhaps those should be expanded to focus more on money? They also have life skills classes for some people. Perhaps people that want or need help should be able to have that type of resource available?

You think teenagers are interested in learning how to build a household budget and living within their means, and that they will carry those lessons into adulthood? Their lives will change ten times over before they can put that knowledge into practice, that is if they even remember what they learned. I'd rather boost the education system to teach them how to read and write properly.

[Smallc]

The education system already teaches how to read and write properly. Life is what people need to learn more about. There's no reason that we shouldn't be teaching about how to survive in the world.

[capricorn]

There's no reason that we shouldn't be teaching about how to survive in the world.

If governmental institutions tried to teach us how to survive in the world, we'd be in school full time year round until we croak. Everything evolves so rapidly. What worked yesterday may not work tomorrow. For the purposes of survival, I trust myself more than I trust government.

[Dave_ON]

Who do you mean by "they"? Who should be mandated with giving more education to be responsible card holders? The government? Credit card companies? Using credit wisely cannot be taught. It is usually learned the hard way. That means taking responsibility for your own decisions, learning from it and adjusting your behaviour.

I completely agree with Capricorn. You really can't teach these skills they have to be learned the hard way through experience. Clearly I remember the impetuosity of my youth and how very irresponsible I was with credit. I sat through all the high school classes on budgeting and such and honestly it didn't really come home until I experienced it for real, now these many years later I'm far more responsible, but only because I learned from my mistakes.

Changing veins slightly, this thread has largely focused on the consumer and the protections that should be in place for them. To an extent I agree with this, but I feel there is only so much the lending institutions can do; those who won't investigate these matters for themselves won't change their behavior because the bank now produces more documentation. Something I think has been missed is that this is an extremely high risk credit product. This is an unsecured loan and therefore the interest rate is far higher to make up for the rate of default. Credit cards are not protected from Bankruptcy therefore the interest rate has to be sufficiently high enough to still turn a profit while taking into account that there is an average default rate plus the fact that those who pay off their balance do not pay interest. I think there has to be a level of personal accountability on the part of the consumer. We can claim its ignorance all we want, and that may very well be the case, but at the same time we have to take responsibility for the choices we make. It's not free money and I don't feel the banks give people that impression in the least.

[Moonbox]

I think there has to be a level of personal accountability on the part of the consumer. We can claim its ignorance all we want, and that may very well be the case, but at the same time we have to take responsibility for the choices we make. It's not free money and I don't feel the banks give people that impression in the least.

I think you're absolutely right in this. I think for the VAST majority of cases people should blame themselves.

Realistically, it's not the bank's responsibility to tell you that it's a bad idea to carry a $20,000 visa balance at 19% and make minimum payments on it. First, providing you didn't lose your job or something (which is the minority of cases), it was idiotic to run up the balance. Second, your minimum payment is barely covering interest.

With that said, the banks do anything they can to sucker people in. You can literally be on ODSP or welfare and get automatic increases to your credit card. If you're carrying a $1000 balance, and you've always made your payments on time, the banks would AUTOMATICALLY increase your limit without telling you. If you racked it up to $5000, there'd be another automatic increase providing you kept up with the payments.

It was a game to the banks. They wanted to see how high they could go and how much interest the client would pay until finally they can't keep up on the visa. Even then, there's a good chance the bank could get a nice consolidation out of the deal.

It reminds me a lot of some of the girls I was friends with in highschool and what they could do to the guys' heads. I used to shake my head for two reasons. First, it was sad to see how stupid some of these guys were and second, it was sad to see how cruel and manipulative the girls could be just to get a few kicks.

Dumb consumers and preying banks are not a good match.