The New York Times had a disturbing story yesterday detailing changes coming to the world of credit cards. With Congress moving to protect credit card users from many of the deceptive practices of the industry, it would seem that banks are planning to target those who pursue good credit by paying off their credit card balances in full each month. Credit cards that were previously free will now come with an annual fee and interest on purchases will be charged immediately rather than after a grace period of weeks. Moreover, so-called "points programs" that include frequent flier miles and cash-back will be cut back or eliminated altogether.
I am one of these people. I have always seen my credit cards as a convenient way not only to make purchases, but to receive an interest-free loan for several weeks each month, a loan that was always paid back in full and on time. Should the changes outlined above go into effect, there will be little reason for me to use a credit card in most cases. I would likely cut back to owning only one that would be used little if at all most months. Or, even more likely, I would use a check card, something that has previously made no sense to me.
19 May 2009
Addition: The New York Times has additional information today, both on the House and Senate versions of the credit card bill and on what it may also mean for those of us pay off our balances every month.
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