There is plenty of talk of credit card reform with the earliest relief going into affect sometime in mid 2010. I could stop right here and let everyone guess what happens next, but then why write a blog post for just that?

Reference article here

Unless there is some retroactive or otherwise immediate action NOW, the new rules will mean nothing to people who use credit everyday. In fact even if you don't think you are using credit you probably are without even realizing it. Case in point, those handy little debit cards you get from your bank, credit union or other financial institution with V or MC on them.

Those come with fees and interest too, although these are usually recouped by the banks through other 'bank fees' imposed on us, like the $30 fee for letting that $5 convenience store purchase go through after reorganizing the electronic transactions in such a way as to cause your account to be overdrawn and other manipulation and downright manufacturing of customer fees. (or so I've heard) There are even stores that charge you a fee to use your debit/credit card. (i.e. YOUR money) The AM/PM Gas stores come to mind from personal experience, but there are others. However, back to my point.

The current proposed credit card reforms are nothing more than a disguised warning to the issuing banks that they better make all the money they can now before things change. Look at how quickly (almost instantly really) banks started raising interest rates, lowering limits, etc., even on the people with good credit ratings, once they heard the first public words of credit card reform from the administration. As I recall it was the following week and in some cases mere days afterwards.

From what I have been able to find, no proposed reforms would go into effect before July 2010, though I could be off a little here, but with no retroactive action included to stop it now or at least proposed repercussions for blatantly jacking up rates and fees, the banks have a great big OK from the government to do what they want for the next 12 months or so. On the other side, it also gives these banks 12 months to figure out and/or implement new ways to poke us up the butt (family friendly version) with fees and charges and other 'junk'.

Some of you are saying, "Well just don't use credit then...", but it is all but impossible these days to do this. Ever try renting a hotel, buying a plane ticket, renting a car without a credit card of some kind? Not everyone does these things, but how about even just paying your bills or buying stuff online or even in person? Are you really going to walk around with a wad of cash these days to avoid using credit. MANY places will not even except checks anymore, because of the expanded use of debit/credit cards and as I wrote above, using those can incur fees too.

So again I ask, who is really paying for this bailout? If I were you, I would be looking forward to a year from now and see who stands to benefit from a year of unfettered fee imposing activity and invest accordingly.

As long as the American Way is to go to school, get a job, save money, and rack up debt, V and MC appear to be good long-term plays.  When people realize that that little plastic card is a tool and not a means of existence, things will change for the better.