Article Number : 5302 |
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| Date | 2/19/2010 9:40:38 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=5302 |
| Abstract | By Emily Hooper The biggest change in credit card protection since 1968 was passed last May with the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) and the consequences are starting to take effect. The act outlines new regulations and program offerings for... |
| Article | By Emily Hooper The biggest change in credit card protection since 1968 was passed last May with the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) and the consequences are starting to take effect. The act outlines new regulations and program offerings for consumers as federal regulations have changed what is available to retailers regarding credit and incentive offerings. The biggest changes affecting flooring retailers relate to promotional offerings. Changes will be implemented between now and August, with a majority taking place in February. Starting Feb. 15, promotions less than six months in length will be discontinued—it is the end of the “90 days with no interest” offering. “No pay” promotions will also be discontinued and require no advertising or offers to consumers after Jan. 3, 2010. Effective Feb. 22, card issuers can not increase annual percentage rates on existing balances for one year after the account is open, with the exception of several contingencies: • The bank has disclosed when rates would increase; • Rate changes are determined from a source beyond the card issuer’s control, like U.S. Treasury Securities; • Rates increase because the card holder is not meeting her end of the agreement, or • The consumer isn’t making minimum payments within 60 days. There are still hooks and deals that retailers can utilize, explained Jim Seger, vice president of flooring industry at GE Money. “Flooring retailers can still take advantage of a variety of promotions, including several types of no interest and deferred interest promotions that provide consumers with the benefits of predictable payments and the ability to pay over time.” Retailers worry this may be more costly to them in the long run, which in some cases can be true. Financial institutions like GE Money are changing everything from credit card applications and promotional signage to cardholder statements and billing cycles to comply with the new laws. Seger said the changes require a significant investment of time and resources but are essential to supporting retailers in preparing for the new regulatory environment. “GE Money has a dedicated team of experts working on behalf of our retailers to review the regulations and integrate them into our financial offerings on an ongoing basis.” The regulatory changes can actually fare in favor of retailers, he noted. With the new regulations geared toward protecting consumers, shoppers can feel more likely to buy with a safety net beneath them. “Current trends indicate that consumers are actually moving toward the predictability of structured or fixed payment plans in the current environment,” Seger said. “This is great news for retailers as the economy continues to recover, unemployment decreases and discretionary purchases for big ticket items such as flooring begin to increase.” Retailers seeking assistance or further understanding of what the legislation means for their store can enroll in educational Webinars at gemoney.com during the first week of February or contact the GE Money business center at 800.333.1082. |