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Liz Pulliam Weston

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The latest news on this change — carefully culled from the world wide web by our change agents. They do the surfing, so you don't have to!

Goodbye to All That

Well it's about time! Credit card companies have had free reign to do as they please when it comes to "offering" credit to consumers. Truth be told, accepting their offers is about as safe as jumping into shark infested waters. Hidden fees, double-cycle billing, and other nefarious practices are finally in the limelight for what they are: a major reason Americans are $900 billion in debt!

We don't suggest that consumers are without culpability; personal responsibility goes a long way in terms of managing debt. Still, there do need to be greater controls on the companies who seek to prey on the average American trying to make her way in a consumer society.

If the Fed's plan goes through then credit card companies can kiss their risk-based pricing goodbye! That means the only time a credit card company can increase a rate is if the consumer defaults —good news for us, not so good for credit card companies. That will hit their bottom line, and naturally, they're none too pleased. But, it puts more money in our pockets and allows us to catch up on the outstanding debt we already have.

Other practices the Fed intends to cut include double-cycle billing, universal clauses, and many of the hidden fees that credit card companies are famous for charging. [CBS News]

Posted: 5/13/08