I have only four words for this post…

I told you so

http://www.thinq.co.uk/2011/1/20/android-trojan-captures-credit-card-details/

I just ran across an article in NewCreditRules.com. The article dates back to April 2009 and I’m not sure that the concept caught on. I’m a long way past college age and I don’t know any college students that I can ask.

The idea is that FICO scores are significantly less useful for determining the credit worthiness of young people just starting out on their own, particularly college students. They have no credit history. So, instead of looking at a FICO score, they would look at things like grade point average, SAT scores, college major and other academic factors. Of course they gave it a fancy name; Human Capital Score.

The theory seems to be that a pre-med student with a high GPA is more likely to make payments than an art major.

Alan Samuels, People Capital (developers of the Human Capital Score) posted in the comment section saying, “Our ultimate aim is to produce a new lending environment for students to obtain funding for their educations.” I hate to break it to you Alan, but it’s already out there. It’s called Financial Aid and Student Loans.

I would agree that the traditional methods of judging credit worthiness leave something to be desired, but this sounds like just another way of saying, “How can we get more cards out there and suck up more ridiculous amounts of interest money.”

You can read the NewCreditRules.com article here.

What do YOU think-is this a good idea? Comments are encouraged!

According to a recent article in Money Talk News, credit card issuers are patting themselves on the back after a new report shows they’ve gotten rid of many “unfair” or “deceptive” practices consumers complained about.

My recent credit card statements have announced how the bank is now “allowing” me to opt in to “overdraft protection.” They don’t mention that it’s now the law, in the hope that I’ll think they are doing it to be nice. They’re also telling me that they won’t raise my interest rates on existing balances. Same deal. It’s now the law, not their great customer satisfaction goal.

The fact is that the CARD Act forced the banks to make these changes. To add to that, the banks are finding other ways to tack on fees to make up for the lost revenue. Watch for these:

We talked about some of the things they pulled before the law went into effect. Now they need to take a different road. Never forget that banks are in business to make money–lots of money. Have you ever seen a less than perfect bank building? Fees that the new federal laws won’t allow will be replaced by others. You can count on it.

Democratic Sen. Sheldon Whitehouse of Rhode Island recently proposed an amendment to the financial regulation bill that’s being worked on in the Senate. That amendment would have capped the interest rate that credit card issuing banks could charge consumers. It would have limited the interest rate to the cap set by individual States.

Currently, credit card interest rates are limited by the State in which the issuer is headquartered. Delaware, North Dakota, and perhaps a few others, have either a high limit or no limits at all and major credit card issuers have set up corporate headquarters in those States.

Late yesterday, that amendment was rejected by the Senate. Once again, government has folded to the wishes of the big money banks over the needs of their hard working constituents. We can assume that someone’s pocket is a bit greener this morning. I applaud Sen. Whitehouse for the effort.

Today, February 22, 2010 the Credit Card Accountability, Responsibility and Disclosure (CARD) Act is now effective. The goal of the law was to give consumers some measure of protection from the predatory lending practices of card issuing banks. As discussed in this blog before, it’s only marginally successful at best. I predicted that the banks would be scrambling to find other ways to milk you of your cash and they’ve been quite successful at it.

Over the past several months, a huge number of banks have jacked their interest rates to ridiculous levels and even the good payers have been hit. In fact, the good payers are the ones the banks are trying to get more money from.

One of the last-minute players in the money-grab game is Citibank. They announced on Friday that they would be charging cardholders (that’s you) a $60 annual fee if they don’t charge at least $2,400 worth of purchases a year. Citi added this fee in a test market back in November and apparently not enough people complained so they are assuming, I guess, that nobody minded and they are rolling it out to all their customers in April.

My guess is that their “Test market” consisted of hand picked accounts that already had more than the $2400 in outstanding balances Those cardholders wouldn’t get hit with the extra fee so why would they complain. Of course, low-use fees aren’t covered by the CARD act.

Don’t be surprised if the issuers continue to find new fees to take your money.