Covering charge card reform

“Veni, vidi, Visa!”

One of the sporadic shopaholics in my family coined that take-off on Julius Caesar’s “I came, I saw, I conquered,” line about 20 years ago, while wielding her plastic with gusto.

The quip was a scream, but for millions of Americans who racked up debt with similar abandon, lenders got the last laugh. Over the past decade or so, all sorts of arcane accounting devices were developed to wring the most revenue out of an open charge card balance, from double-cycle billing to boost finance charge to universal-default rules that hike interest rates if borrowers are spotted make a late payment – to another vendor. Rule changes were sprung on customers via microscopic type on plain little black-and-white folded pamphlets.

Still, we gorged on easy money, and everyone laughed at numerous tales of easy credit being extended to dogs, babies and garden gnomes as banks furiously churned out pre-approved offers for more. Then the economic tides turned, a wallet load of credit cards ceased being a status symbol and consumers were aghast when they took a good hard look at what they’d signed up for.

As of June, we owed about $917 billion on revolving credit accounts, according to the Federal Reserve’s G-19 Consumer Credit report. Congress got in on the act and earlier this year passed the Credit Card Accountability, Responsibility and Disclosure Act of 2009, which President Obama signed into law in May.

Here’s the White House fact sheet on the bill; some of its provisions kick in today. From now on, credit card issuers have to mail bills three weeks before they are due, and they’ll have to give customers 45 days to mull their options – including a new payoff plan – when rate increases loom.

For more on the credit card reform provisions, more of which take effect in February, here’s a Consumer Reports page devoted to the act and related info.

One caveat: Many consumer advocates – and journalists – trumpet the new legislation as a triumph over evil predatory lenders. To be sure, issuers’ ingenuity definitely has been in overdrive when it comes to some of the convoluted fee and billing structures, and there is no question that glitzy marketing materials eclipsed the plain-Jane contracts that bind so many people to debt.

But it’s not a one-sided story, so don’t write it that way. Many prompt payers will see their rates rise, too, as banks compensate for revenue lost elsewhere. Those who use cards for convenience and rewards, without carrying a balance, may see the return of annual fees and the shriveling of points programs. Always look for the contrarian view when reporting on consumer affairs.

Consumer Action, in their just-released annual survey, takes a look at the pros and cons of the bill, as well as other trends in credit card policy.