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President’s Speech Warning to Credit Card Companies?

President's Speech Warning to Credit Card Companies

I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies…

President Barack Obama’s September 8, 2011 speech to the American people. (Transcript courtesy of CBS News)

Many, upon hearing that statement, perked up their ears and began wondering if President Obama’s mention meant there had been talk of stripping protection granted consumers in the 2009 CARD Act.

Is it possible there had been conversations in political and financial offices that would jeopardize the compliance issues that keep credit card companies at bay when it comes to fees and other regulations?

Could it be that there was or is a chance that all of these limitations placed on banks and other lenders, and certainly credit card lenders, would be pushed to the wayside and consumers would once again face uncertainty when they opened their statements each month?

While most of us who listened to the President’s speech noted that one ominous statement, others in the know are saying it’s nothing more than a reiteration of the commitment President Obama made to the American people when he signed the CARD Act into law. One political advisor we spoke with said,

The President is committed to maintaining his promises, but the fact is, the election’s approaching and all politicians are aware of that and are seeking to keep their past victories front and center.

On the Horizon for the American Consumer

So what did this latest address mean for the American people and their financial outlooks? If the CARD Act is safe and sound, are there other concerns that will eat away at what little savings many Americans have managed to accumulate in 2011? Maybe. It’s no surprise that every American president has included “no new taxes” in his campaign speeches, but with the unique struggles this particular president has faced, it’s difficult to find the silver lining.

Still, if tax increases can be held at bay, it just might be that the collective American people can once again begin paying down their credit card debt, adding to their retirement plans and of course, spending more of the cash they earn. That’s always been the cure-all for jump starting sluggish economies, but with fewer of us whipping out the plastic these days, it’s been a bit of a vicious cycle with no definitive benefits.

Holidays and Enticements

With the 2011 holiday season quickly approaching, here’s what credit card companies are doing to entice you and me to include plenty of credit card swipes in our shopping rituals:

Chase Freedom Visa is offering a $200 cash back bonus, with no annual fee. Your cash back bonus is earned when you spend $500 in the first three months of having the card. You also enjoy 5% categories that rotate three times a year. Also, MasterCard and Chase have teamed up too with a similar offer for those who prefer the MasterCard logo.

Discover’s Student Card is offering college students a $25 cash back bonus when they sign up for the credit card. The goal is to entice young college kids and hopefully instill strong financial skills in the process. It’s become one of Discover’s highest rated card offers.

Many credit card companies are reaping the benefits from co-branding with another industry, such as airlines. The Chase Southwest Airlines Rapid Rewards Plus card allows users to earn a free flight after their very first purchase. Plus, to celebrate the consumer/credit card company relationship, card holders see an additional 3,000 bonus points every time their anniversary rolls around. There are plenty of ways to earn points with this card, and again, it’s one of the higher rated cards on the market today. Chase and Continental Airlines have a similar co-branded offer for those who like to fly United or Continental. The goal is to form loyalties to both companies while saving customers money in the process.

Of course, these are just a few of the many new ways we’re seeing credit card companies woo us in tough economic times. With much to look forward to in terms of the economy, a win-win situation is more possible now than it has been in the past four years.

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Copyright © 2022 | Image: Reuters. International Business Times. | Categories: Credit Card News, Credit Card Reform

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