This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

New Credit Card Rules Could Help Banks

Broadly speaking, the regulation will force banks to be more transparent about terms, in simple language, and will not allow them to quickly change rates or fee structures. Additionally, if they do plan on raising rates, customers will now not only get more time to opt out of the debt agreement, but also more time to pay off their outstanding balance.

The CARD Act will also ban lenders from preying on less-sophisticated consumers. For instance, the common practice of offering college students gifts or food in exchange for filling out an application will now be banned, and students will also have to prove their ability to pay before being approved.

Big banks are using very different approaches to deal with the impending changes, and the negative effect they will have on revenue and profit. They will have to be careful about the strategies they use to replace that income without angering customers and regulators.

Bank of America, for one, appears to have embraced regulatory changes aimed at helping consumers, as part of its overall push for better customer service. The bank rolled out a "clarity initiative" for its 40 million credit-card customers in November, distributing one-page explainers of terms and fees that were easy to understand. Management has warned investors during conference calls that Bank of America will simply lose revenue from practices that are being banned by regulators -- up to $800 million due to the CARD Act alone -- until the firm figures out how to spread those fees across other products and services.

Citigroup, on the other hand, has been combating the change by adding annual fees onto popular credit cards. The New York Attorney General attacked the firm for attempting to use the same tactic on checking accounts. Citigroup settled the dispute by suspending those plans.
2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $11.95 0.00%
C $37.54 0.00%
COF $62.54 0.00%
DFS $44.52 0.00%
JPM $57.49 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs