The Credit Crunch: Watch those Charges at the Weekend Sales

jimmychoo2 a The Credit Crunch: Watch those Charges at the Weekend SalesPictured: A Pair of fabulous Jimmy Choo Crê de chine shoes, retails for $1,300. Carrie Bradshaw may have charged them on her credit card and have paid much more for them with interest and fees.

All the recent commentaries on the credit card reform bill made me think about poor Carrie Bradshaw. Remember when she couldn’t get a loan to buy her condo/apartment in New York, but her closet was full of fabulous designer shoes? And I bet she put all those shoes onto her credit card. In my experience, when you shell out for those high-priced high heels, you will be paying for them for along time. Very few people pay for these types of purchases in cash or with a debit card.

As some of you know, the Senate passed the Credit Card reform bill. When it is effect (President Obama signed it on 5/22) , the credit card companies will have less than a year to make changes. These changes would include having to post their credit card agreements on the Internet, and permit all customers the ability pay their bills online or by phone without an added fee, rationalize over-the-limit fees and provide 45 days notice and an explanation before interest rates are increased.

Unfortunately for consumers, interest rates will not be capped as some like yours truly had hoped and prayed for! However, this is progress and I’m happy to see the power shifting a little more towards the consumer.

bank statement before The Credit Crunch: Watch those Charges at the Weekend SalesPictured: Sample credit card statement with late fees and interest charges circled in red. Think before you buy at the Memorial Day sales.

So think about those Credit Card interest rates Recessionistas when you are out there shopping for summer fashions at the Memorial Day sales. My debit card is looking better and better to me all the time! I am trying to use it more and more for purchases. I mean, it makes no sense to buy a $5.00 pair of shoes if you are going to end up paying triple that in interest, and maybe even more in late fees if you make a payment late. And believe me, this is something I am telling myself as much as I am telling you dear readers. Ultimately, it’s up to all of us to make the choices about our own finances.

Finally, I have to mention that I love that two bloggers were commentators on CNN yesterday about the credit card crunch. They called them the “blogger bunch.” Cute, huh? When you have two people together, it’s now consider a “bunch.” Of course, that may only be if they are bloggers. I have to give a shout out for fellow blogger, Natalie McNeal from The Frugalista® Files. Click here to watch the video on CNN. Props to The Frugalista® for some good common sense explanations of the changes.

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3 Comments

  1. MissaaMay 22, 2009 at 2:18 pm | Permalink

    Very interesting! Thanks! :)

  2. AnonymousMay 23, 2009 at 3:28 pm | Permalink

    Congress has taken historic action to help protect consumers who use credit cards. The Credit Cardholders’ Bill of Rights Act of 2009 (H.R.627) passed both the House and Senate and has been sent to President Obama for his signature to make it law.

    For too many years, credit card issuers have been taking advantage of the fine print in their contracts to charge consumers outrageous fees and “any time, any reason” interest rate increases. When this bill takes effect early next year, they will no longer be able to engage in these and other abusive practices. Among other things, this new law will:

    * Require advance notice of any interest rate increases;
    * Prohibit interest rate increases on an existing credit card balance because the cardholder misses a payment on an unrelated debt;
    * Prohibit interest rate increases on any existing balance unless payments for on that card are at least 60 days overdue;
    * Protect consumers from arbitrary fee and finance charge increases;
    * Prohibit interest charges on balances that have already been paid off;
    * Require payments to be applied first to the account with the highest interest rate;
    * Protect students and other young people from aggressive credit card solicitations;
    * Require greater disclosure of rates, terms and billing details by credit card companies; and
    * Establish tougher penalties for companies that violate the law.

    This new law represents a victory for American consumers and will prevent the unfair practices that many consumers have faced. By reducing credit card payments, it also will help consumers invest and save more — thus helping to make our economy stronger.

    from an email sent from by:

    Barbara Boxer
    United States Senator

  3. MHMay 24, 2009 at 4:56 pm | Permalink

    I am so glad this reform is on the way. I spent time this am on the phone with 3 credit card companies re: UNDUE LATE FEES they charged on my credit cards.
    For one company, I made 2 payments in April, yet they charged me a late fee of $39.00. And if you don’t notice it and complain, they you are just SOL. SPEAK UP CONSUMERS. Call the card companies and complain about these charges when they appear on your bill. You’ll be surprised how many will waive the fee when you speak up.