The Federal Reserve received around 56,000 responses from angry credit card customers with regards to the new rules it proposed against abusive credit card practices. The rage over arbitrary hike in interest rates based on factors apart from the consumer’s credit history is apparently pretty wide spread.

A long list of factors is contributing towards making unethical or usurious practices in banking industry the norm. The consumer rights bill sponsored by House Financial Services Committee Representative Carol Mahoney moves toward preventing credit card companies from arbitrarily raising interest rates on a balance incurred under an old rate or for unrelated reasons.

One of the major factors motivating abusive lending is the trend of larger and larger corporations. The big banks such as Bank of America, Citi Group and Chase that issue most of the credit cards can take credit risks and absorb the damage in the form of spiked interest rates and sale of bad debts.

Another factor is the focus of the company management solely on meeting the expectations, unrealistic as they may be, of the stock holders who pay them. The interests of the customers are being compromised for increased ROI’s and salaries of the upper echelons.

Not to entirely absolve the consumers and the government, the practice of encouraging expenditure in the absence of liquidity with unsecured credit cards has ruined all hopes of economic stimulus through conspicuous consumption. These lead to abusive lending practices which is another source lost for ready cash like the time when the subprime mortgage crisis hit us.

So, credit card reform is most definitely overdue but first and foremost we need a pool of people who make enough money to cover their basic needs and still have some left to spend on consumer goods. These will require some systemic changes that cannot be accomplished without bloodshed.

The bill is a good start to all of this, but the banks are ferociously fighting the bill, despite its fairly modest restraints. This resistance by the industry makes me wonder- “Has the banking industry completely lost whatever moral compass it might once have possessed?”

Humberto Cruz in an article on the boston.com site had the foll. to say about credit card debt in 2008.

Consumers, who, of course, never charge for purchases they can’t afford, will pay off all their holiday credit card bills in January.

That would be quite a change from this year. According to a nationwide survey by Fort Lauderdale, Fla.-based Consolidated Credit Counseling Services in November, 319 of 974 people who answered the question said they were still paying off holiday debt from 2006. (And 26 people skipped the question.) Of those 974 people, only 39, or 4 percent, expected to pay this year’s credit card bills right away, and 59, or 6 percent, expected it would take them as much as a year.

You can read the complete article at http://www.boston.com/business/personalfinance/articles/2008/01/09/
in_08_taxes_are_again_inevitable_but_credit_card_debt_doesnt_
have_to_be/

Credit card companies launch cards with different features to suit people in different credit groups. The credit cards for people with fair credit come with more low APR and low balance transfer offers. They even give great rewards for using the card.

In comparison, a credit card for bad credit, may or may not come with all the goodies. However, if you are looking for a credit card and have bad credit, here are some tips that may help you get the right card -

- Apply through your own bank. If you have an account with them, they may be willing to give you a card.

- Look for secured credit cards. They may be easier to get.

- Look for cards with No Annual Fee. Last thing you want to do is pay a high annual fee.

A warning - Don’t overspend and at least pay the minimum balance each month. Some of the major credit cards actually report to credit bureaus, and paying bills on time may help you improve your credit rating over time.

Check out and choose the right credit card for bad credit or credit card for fair credit online.