New CARD Law has you blue?

A friend on Facebook posted the following question, directed to the wider internet world at large: "Can someone explain to me what the real benefit of the Card act is? While they were "phasing it in" most consumers saw an outrageous raise in their interest rates. How did this help us? Please enlighten me or was this just another waste of time in congress?"

Those are good questions.  They are also somewhat up my alley so I will take a pot shot at them over the next few days.  The law is big, its hairy, and it has a variety of different aims, targeting every thing from universal default to the age of those who can be targeted.

If you would like to read the 33 page act in its entirety, check it out here.  You could also give yourself a colonoscopy, I have been told by one reader that it is less painful.  As much as I would like to weigh in on that conversation, I will have to pass (no pun intended). 

So, to start us off, let's just look at a few of the provisions today, mostly those dealing with issuing cards to children, pets, and citizens of Dog River, Saskatchewan. (Kidding about issuing cards to Dog Riverians,  sheesh, like that would ever happen).

Provision: Lets start with education.  The CARD act gets grumpy with companies that deal with colleges (which is pretty much all of them).  The law now requires colleges and credit card companies to disclose marketing agreements and payments annually to the government, who will in turn create a blow by blow report for Congress.  This is to lead to further review by the Comptroller General, who will make recommendations to Congress on whether credit card companies are having a negative or positive impact on college students and what Congress should do about it. (See section 305 of the CARD Act).

The law also forbids colleges from giving away "physical" freebies if they are on campus, near campus, or at a campus event.  That's right, no more free tee shirts and pizza if you sign up for your Fighting Irish Platinum Visa Card.  (See Section 304).

How prevalent/effective was the practice?  According to some, frightfully so. 

They also recommend, but don't require, colleges to offer financial/credit courses to incoming students.

 Response:  What does this do for us?  Well, a year from now it will be interesting to read who gets what from whom.  Wait....they report to the government annually...then the government makes a report for congress,  and occasionally the Comptroller General will weigh in. Sounds like a lot needs to happen before anything might happen.  What does happen will surely depend on what the report says, how many banks failed the six months prior, and, more importantly, who is in control of Congress/The White House at the time.  It could help if we are close to elections as well.

The data is bound to be a fun read for sure, but I wouldn't hold my breath on big changes coming from this particular portion of the legislation (Unless I was a static apnea champion, then I might, for over six minutes).

The lack of free pizza for credit cards is sure to put a serious dent in the budgets of university students across the country.  I recommend that an additional study be performed, and submitted annually to Congress, regarding the economic impact to student pizza and t-shirt budgets as a direct result of these sweeping legislative changes.

As for colleges willingly offering financial courses to incoming students, well, don't get your hopes up on that one either.  I was pleasantly surprised to find a local university did offer just such a course on wise credit use, until I found out that the class was funded and taught by a credit card company.  Sometimes you just can't win.

Now, let me know what your thoughts are.  Tune in tomorrow for details on the changes regarding those under age 21, cats, and Dog Riverians.

Who went and gave you a finance blog anyway......

So, here we are, and you are probably wondering, who am I?  Meaning me, though you might be pondering the who'ness of yourself, and that's OK too.  I want to tell you who I am, in theory, because some think that might increase the possibility of your taking some of what is say seriously.  Just some.  So, without further ado, I give you me. 

I have long had an interest in finances.  From an early age I was aware of some financial struggles within my own family growing up and the necessity to deal with money wisely.  I found the love of my life relatively early, and at age 22 found myself married, in college, with a child on the way, and trying to figure out how this money thing worked when you had a family.

When it was just me, money was easy enough.  I paid for everything in cash, set aside money for savings, paid the bills, and that was that.  I didn't have or need a credit card.  My first car was paid for in cash (not much though, neither cash nor car).

It was with the introduction of the spouse that money became more difficult.  Not because she was an out of control Gucci mango shampoo buying fanatic.  Quite to the contrary.  My wife is great with money. In fact, she is even more frugal than I am.  It was more that when you took me, and added my spouse, ME + SPOUSE, we ended up with INTEREST.  Now we have five little INTEREST's, and apparently they cost money.

In college managing money became more than an issue, it became first an interest, then a love.  I switched from an Economics degree to Family Finance, and before I graduated with my bachelors degree I was working full time for an agency providing housing and credit counseling to low income families to help them prepare to purchase a home. At the same time I found myself working for a HUD certified counseling agency and the local chapter of habitat for humanity.  Soon the family finance bug spilled over into other areas of my life until I was teaching financial principles at work, school, and even at church.  I returned to school to complete a masters degree in Consumer Science.  My experience lies in loan processing, budgeting, personal finance education, credit counseling, foreclosure prevention, and home buyer education.

Now, that we know what I am, and kind of who I am, let's cover what I am not.  I am not an accountant.  I am not a life insurance agent, or a bankruptcy lawyer, or a Realtor.  I do not sell financial products, and will not be offering any big tips on the next hot stock.  If you are any of the above, that is great!  I look forward to hearing from you as well.

Now, it's time for me to make like the stock market and dive.