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Truth in Lending - Version 2


Jul 06, 2008

Proposal: Regulation Z - Truth in Lending Document ID: R-1286 Document 
 2 Release
 05/02/2008 Name:
 C A Corelle Affiliation:
 John Q. Public Category of 
 Other Affiliation:
 14418 SW Pennywort Terrace City:
 Tigard OR UNITED STATES 97224

Comments: I am in favor of all the proposed regulation; however, for me personally, the highlights below and my comments following each quoted section pertain to the most important changes I would like to see in effect: "Banks would be prohibited from applying payments in excess of the minimum in a manner that maximizes interest charges. Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible." In my opinion it is fraud for a credit card company to solicit and accept my business through a promotional offer, if their intent is to penalize me in the future if I also do business with the company under its routine or its other promotional business terms. Either the promotional offer is a valid offer or it isn't. If the company extends credit to me under a promotional offer and I repay the balance of credit extended to me under that promotional offer, the company should NOT have the right to apply the full repayment amount to a balance created under any other terms than those of the promotional offer. For example, I accepted a fabulous 5-year, 0%, promotional offer from Citicards on "everyday purchases" (offer #4),

used the card exclusively for the specified "everyday purchases" over a period of at least 2 years until I received a second 0% [for 8 months] promotional offer(offer #5) on balance transfers from the same Citicard account. Because the two offers were at equal interest rates (0%), but offer #4 was set to expire after offer #5, I made an inquiry to Citicards to see if I could accept offer #5, repay the full balance that I were to transfer under offer #5 by the offer #5 due date, and still retain the 0% interest on offer #4 until was set to expire one year after offer #5's scheduled expiration date. I was informed that offer #4 at 0% would continue as long as I made the required monthly payments on the account on-time and repaid the full amount of the balance transferred under offer #5 by the scheduled expiration date for offer #5. After receiving this information and before accepting offer #5 and transferring any balance, I made a second contact with Citicards to confirm the potential consequences on offer #4 if I accepted and complied with the terms of offer #5. Citicards customer service staff reiterated the original information, so I transferred a balance. I have made on-time monthly payments and have just scheduled the repayment of the full offer #5 transferred balance; and NOW I am being told that the interest rate on my offer #4 balance will revert to the standard purchase interest rate of 12.9% on the expiration date of offer #5, which is one full year before the expiration of offer #4's original 0% interest terms. THIS IS an example of FRAUD as far as I see it--- a one-way street of benefit only to the credit card company. Citicards is just one company. ALL credit card companies are currently allowed to get away such fraudulent practice at the expense of consumers. "Banks would be prohibited from imposing interest charges using the "two-cycle" method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle." Discover Card pursues this policy and I strongly believe it is unfair and confusing.