Happy CARD Day!
As I am sure you have heard from most major news sources, today is the day that the CARD act becomes effective. We have waited a long time for this, and I have covered it from just about every angle. Since there are no shortage of stories about what the CARD provisions contain, I thought I would explore the lighter side of it.
Minimum Payments
One of the aspects of CARD is that banks are required to tell you how long it would take to pay off a balance if you paid the minimum payment. Over at the humor site Cracked, they have their own table to explore what would happen if you paid off your minimum balance. According to their calculations, it would take over 2,000 years, at which time the earth will be destroyed when Bank Of America “uses payments on your account to build a space based railgun” to destroy the earth. By that time you will have “paid an amount greater than all of the goods and services currently produced on the planet.” They include a hand chart as well.
Special Rules For Young Adults
According to the CARD act, consumers under the age of 21 must have a cosigner or an independent means of repaying the debt, such as a job. Before the cardholder reaches age 21, the cosigner is required to approve any increase in the credit limit in writing. When I first heard of this provision, I was very offended at the notion that they would be treating people under 21 differently. Then I realized that this provision exists because the banks have been treating younger adults differently. Rather than just grant them credit in the hopes that their parents will bail them out eventually, applicants under 21 are actually required to show proof of some sort of income.
Wow, imagine that! You can’t get a loan until you show that you might actually have a chance of paying it back. Why does this only apply to consumers under the age of 21? Perhaps we would not be in a huge banking crisis if this kind of rule had applied to everyone.
Now, I am not a professional banker,but this seems like something they should be teaching in banking 101. I imagine the teacher of an introductory class lecturing future bank officers saying something like: “You see class, if you loan money only to people who can pay it back, the bank will not fail.” Then, these wide eyed freshman look puzzled for a few moments before asking the professor to repeat that statement as they furiously paraphrase the lesson for their notes. Seeing as we did have a major banking crisis, I am guessing that such a scene does not regularly occur, hence the need for such a ridiculous law.
The Democrats Lose Even When They Win
I have made no secret of my belief that the CARD act was a major political win for the Democrats. I think you would have a hard time finding anyone who is not employed by a bank that thinks this act is not a positive step. Yet, President Obama and the Democratic party has been eerily silent on this modest, but significant win for consumers. Here is an article detailing how the Democrats are ignoring their achievement.
I am not one for the meme that Democrats are spineless wimps, but come on. Here is a big legislative victory for consumers, and they are just sitting on their hands! Step up to the plate and take some credit when credit is due!
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